The markets don’t care about Hester’s bonus

Alex Hern counters Guido Fawke’s spin that stopping Hester’s bonus cost the taxpayer £320 million.


With the news that Stephen Hester is set to give up his £1 million bonus, largely due to the threat from Labour of a commons vote on the issue, the head of RBS has suddenly found himself with a number of defenders – or more, accurately, the head of Labour has not-so-suddenly found himself with a number of detractors.

Guido Fawkes, for instance, is pushing the idea that forcing Hester to drop the bonus wasn’t sound business:

Hester wasn’t going to get his hands on his bonus for over a year, it wasn’t even going to come directly from treasury funds and most of it would have ended up in Treasury coffers, yet this morning £320m has been wiped off of the value of the British taxpayers’ forced investment.

With mob mentality over-ruling contracts, there are obvious jitters around the banks this morning.

This is backed up with a ominous looking graph:

Unfortunately for Guido, it’s not just RBS which has had a bad morning:

Tempting as it can be to try to spot patterns in stock prices, its always best to look further afield to ensure that there aren’t alternate explanations. If just RBS were down, the bonus could perhaps be to blame.

As it is, most banks are suffering today, and the Wall Street Journal explains why:

European stocks fell Monday and Portugal’s government bond yields soared as investors fretted that Greece still hasn’t secured a deal with its private creditors on the restructuring of its debt…

Policymakers have emphasized that Greece is unique, but markets are not convinced. Placing greater financial clout behind the euro area rescue mechanisms with strong commitment to austerity and structural reform at the national level would go a long way to securing credibility,” said Societe Generale.

Investors are also likely to keep an eye on the relationship between Greece and Germany. Reports over the weekend suggested that Germany would like the EU to have veto powers over the Greek budget–a proposal not welcomed by Greek politicians…

Banks overall were not having a pleasant session. The Stoxx Europe 600 banks index was down 2.4% at 144.89.

See also:

The government has the power to stop Hester’s bonus, they just don’t want toBen Fox, January 27th 2012

All in it together? RBS fat cat “in line for £7m payout”. Seven. Million – Shamik Das, January 27th 2012

Cable fails to provide a stick or carrot in the fight against obscene payDuncan Exley, January 24th 2012

Three things Cameron should do if he’s serious about high payDuncan Exley, January 9th 2012

How bankers’ bonuses are contributing to the new credit crunchCormac Hollingsworth, December 6th 2011

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.

21 Responses to “The markets don’t care about Hester’s bonus”

  1. Anonymous

    Now for Gordon Brown’s payments for failure.

    Lets have his pension cancelled to pay for the mess.

  2. Rob Davies

    Sorry, @GuidoFawkes: The markets don’t care about Hester’s bonus: by @AlexHern

  3. Pulp Ark

    The markets don’t care about Hester’s bonus #Sustainable_Economy #Analysis #banks #muslim #tcot #sioa

  4. Patron Press - #P2

    #UK : The markets don’t care about Hester’s bonus

  5. Billy Blofeld

    I’ve laughed at Left Foot Forward’s claim to be “evidence based” for a long time. It has always amused me that you only ever found evidence that was pro the government’s position before the general election, yet after the election remarkably the evidence has only ever seemed to point in the opposite direction and that the government is run by a bunch of idiots after-all.

    So I’m genuinely surprised and welcome some evidence which seems to *actually* back up what you are saying in this article. Well done.

  6. Teflon Dave

    Sorry, @GuidoFawkes: The markets don’t care about Hester’s bonus: by @AlexHern

  7. Samuele Frecchiero

    RT @leftfootfwd: The markets don’t care about Hester’s bonus

  8. BenM_Kent


    So long as we can claim back all monies paid to Baroness Thatcher for standing up this ludicrous economic model which smashed into the credit crunch wall in 2008.

    Blame where it truly lies.

  9. Billy Blofeld

    Poetry. A lady ousted over 20 years ago is to blame. Ha! Ha!

  10. BenM_Kent


    Ignoring the source of the problem doesn’t make it go away.

  11. Billy Blofeld

    Wasn’t she only fixing the damage caused by the previous Labour government?

    Maybe it was Edward Heath “wot originally caused it”….. what do you think?

  12. BenM_Kent

    Ted Heath created his own fair share of problems which the Callaghan government tried to get to grips with but ultimately failed to do so.

    What is indisputable is that the policies and neo-liberal thinking introduced by Thatcher after 1983 led headlong into the most massive financial crash we’ve seen this side of the Great Depression.

    Lauding finance? That was her government’s policy. Not taxing enough? Ditto. Mass unemployment? Her government was a byword for it.

  13. Alex Hern

    @HarryLangford @MatthewSDent It was wrong when Guido said it and it's wrong when Young says it:

  14. Matthew S. Dent

    Oh look, the boys at @leftfootfwd have already demolished Young's idiotic argument re: Hester's bonus: (h/t @alexhern)

  15. BevR

    RT @leftfootfwd: The markets don’t care about Hester’s bonus

  16. BevR

    Sorry, @GuidoFawkes: The markets don’t care about Hester’s bonus: by @AlexHern

  17. Mark Ferguson

    Smart blog from @alexhern on the supposed impact of #bonusgate on the RBS share price

  18. John Ruddy

    She is, if this government are following her discredited policies… which they, er, are.

  19. Robertwjandersen

    anyway, for the record, Cameron wanted the man to voluntarily give up his bonus, but Milliband forced him effectively- hope we can all agree ion that cos i’ve noticed with lefties they have terrible memories.
    Now IF hester resigns in the coming year and RBS gets smashed up, that 50billion we have in there, well, let’s see what hapopens.
    If the man voluntarily gives up his bonus he probably won’t resign… why does the left ALWAYS INSIST on being so unpragmatic

  20. Matthew S. Dent

    @ChuckWithers Except that Hester's refusal of his bonus was unconnected to the fall in value of RBS

Leave a Reply