Has Alistair Darling won the battle of the bonuses?
It has been revealed today that Royal Bank of Scotland bosses have downgraded their £1 billion bonus package to a "meagre" £175 million. The move is being hailed as a success by the Treasury, government and Alistair Darling but is there more behind the scenes of this apparent victory?
While there is no doubt that the government and Alistair Darling inparticular have been placing significant pressure upon the directors of the Royal Bank of Scotland to downgrade their proposed £1 billion bonus package, there had seemingly been legal issues regarding a possible reduction. Under instructions from the government, now the majority shareholder in the business, bosses have now been directed to pay just the "legal minimum" - so what has changed?
There is some significant confusion as to the outright cost of the proposed bonus scheme because a number of bonuses will apparently be deferred, with employees unable to take them up for a possible 18 months. The bonuses in question will be performance related and could be held back if performance is not up to scratch.
It is uncertain as to whether these deferred bonuses are in fact in addition to the £175 million package or part of the new deal. On the surface this looks like a very successful public relations stunt by the government but is there more to the deal than meets the eye?
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