Vince Cable wants to cut back the big bonus culture

This week, Vince Cable is going to be announcing plans which are set to reduce the amount of remuneration that senior business executives get. This is expected to continue the political row over the enormous pay that some executives receive.

The announcement of these plans comes right after an announcement by Royal Bank Of Scotland that they are going to be paying their bankers bonuses totalling £2.5 billion. This roughly equates to bonus figures of £140,000 per banker. This figure includes salaries as well as benefits and the individual bonus figure is expected to be about £500 million.

Over 80 percent of RBS is owned by theUKtaxpayer after it was bailed out in 2008 for a  figure of £45 billion. Investment bankers at the bank are paid less than their rivals but the large salaries are still an issue for ministers as well as the public. The Prime Minister as well as George Osborne have said that they want to see the financial services sector have some restraint when they are offering bonuses.

The Chief Executive of RBS’s Stephen Hester and he is expected to take a bonus of over £1 million. This year Mr Hester has managed asset disposals valued at nearly £5 billion and in the past has waived his large bonus.

Vince cable wants to introduce measures that will force companies to publish information about how much the Chief Executive is earning as a single figure, inclusive of bonuses and other additional pay.

This will make the figure easy to understand by people who do not know how to read financial reports. Plans also previously included the appointment of an employee of the company to sit on the company’s board however this initiative has been postponed despite an appeal from trade unions to have it implemented.