Communist Party of Australia

We acknowledge the Sovereignty of the First Nations’ Peoples.

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Issue #1585      March 13, 2013

Failed banker handed £1.5m in bonuses

British bank Lloyds boss Antonio Horta-Osorio is at the centre of a storm of criticism after the bailed-out bank’s board handed him £1.5 million in bonuses. The 39 percent state-owned bank posted losses of £570 million before tax for the last year, burning away £4 billion just in compensation for ripped-off customers who were missold payment protection insurance (PPI) and interest rate swaps.

Mr Horta-Osorio already enjoys a basic salary of £1.06 million each year on top of his “golden hello” of six million shares and more than half a million in cash in 2011.

But Lloyds’s remuneration committee have stuffed his pockets still further with new shares which will pay out after five years on a 73.6p share price - or if the government sells at least a third of its stake at a profit.

The Unite union representing cashiers and other low-level financial workers voiced dismay at the payoff. National officer Dominic Hook said there was no justification for Mr Horta-Osorio’s rewards when the bank was tainted by scandal.

“Customers and staff have a right to be angry. They won’t understand why those at the top are being rewarded,” he said. The announcement also followed reports the Con-Dem coalition was preparing to offload its 39 percent stake in Lloyds.

Mr Horta-Osorio himself declined to comment, saying only that he was “very confident” the government would recoup its investment. But left Labour MP Jeremy Corbyn accused the coalition of kowtowing to the very bankers taxpayers had bailed out.

“The government seems to be trying to engineer a share price rise as a hidden bonus,” he told the Morning Star newspaper.

The Islington North MP, who has long called for a state-owned bank as part of the People’s Charter campaign, said governments should not be looking to re-privatise banks at all.

“They should be publicly owned, with profits going to fund the public services people need,” he said.

The furore over Lloyds’s largesse came just a day after RBS (Royal Bank of Scotland) chief Stephen Hester announced £607m in bonuses after a “chastening year” detailing £5.2 billion in losses - including its own payouts over PPI and interest rate swaps.

The 82 percent state-owned bank had been expected to award less than half that amount, with a widely circulating figure of £250 million.

But it soon emerged the bonus pool had already been cut by £302 million as a result of fines relating to the ongoing Libor-rigging investigation: the biggest scandal since the credit crisis itself.

Both Lloyds and RBS are among nearly two dozen banks under investigation.

The inter-lending rate, which averages out the level of market confidence shown by loan terms between banks, determines rates for derivatives and consumer and business loans worldwide.

But Mr Hester confirmed last month that for years RBS’s reporters colluded with their trader colleagues, falsely raising or lowering the figures hundreds of times in line with their trading positions.

Morning Star  

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