Banking’s bonus madness is even worse than I thought

Among lively responses to my recent item on executive pay and the possibility of using state-owned RBS as an experiment in reducing it, this one from a senior City whistle–blower: ‘Are you aware that the situation is even more absurd than you say? Since the EU bonus cap [introduced in 2014, limiting bonuses to 100 per cent of salary or 200 per cent with shareholder approval] we all had our basic salaries raised to ridiculous levels to ensure no one loses out — which of course has the perverse effect that people work less hard and frankly care less about the performance of the bank.’ Executives just four years into their careers command base salaries of up to £150,000, and ‘managing directors’ (of whom every firm has dozens) up to £600,000. But at RBS — ‘now the City’s biggest hire-and-fire shop’ — the base scale is even higher: up to £1 million for a junior director and £1.5