Chairman Sir Philip Hampton went seriously off-message yesterday, accepting the somewhat tenuous proposition that the comically-large bonuses of days gone by might have had something to do with the recent recession. On the bright side: R.B.S. has slashed bonuses by 75%, so no one needs fear another economic crisis.
On Wednesday, Philip Hampton, the chairman of the Royal Bank of Scotland, didn’t disagree with concerns raised by shareholders over banker pay, saying that “the structure of pay and bonuses contributed to the financial crisis.”
In response to a question from a shareholder at the bank’s annual meeting in Edinburgh, Mr. Hampton said that compensation in the financial industry “got out of line with the underlying performance of the business.”
But, he added, “I think we’ve done more structurally to address the wrong ways of paying people,” noting that bonuses have declined 60 percent in the past four years at R.B.S. and are down 75 percent in its investment banking business….
R.B.S. set aside £576 million to pay for bonuses in 2013, 15 percent less than a year earlier.