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LONDON - Faced with public outrage over excessive bankers' pay, the bosses of Britain's five biggest banks have taken the unprecedented step of spurning bonuses worth millions of pounds.
As the dust settles on the annual results season, analysts said the sector was keen to fix its battered reputation after being accused of helping to spark the global financial crisis that dragged the world into a painful recession.
The chief executives of Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland and Standard Chartered all decided to renounce their bonus entitlements for 2009, with some even donating their rewards to charity.
"I am not surprised by the behaviour of bank chief executives," said senior strategist Howard Wheeldon at BGC Brokers in London.
"They are seeking to carry the responsibility, if not the can, for the part that their respective banks may or may not have been responsible for, in the mess that we have seen unfold over the past two years or so."
He told AFP: "They are of course responding to public opinion too -- but they are also seeking to protect their senior staff who are, after all, legally entitled to receive all that has been previously agreed that they will earn."
While bosses relinquished their bonuses, remaining senior staff at the banks will still receive bumper financial rewards on top of their salaries -- even after the government decided to slap a 50-percent tax rate on bank employee bonuses above 25,000 pounds (US$37,600).
The so-called "supertax" could generate more than 2.5 billion pounds in taxation revenues, according to a recent survey by the Financial Times.
Last week, the head of global banking titan HSBC pledged his bonus to charity despite rising profits at the Asia-focused group as he sought to deflect public criticism over the controversial issue of executive pay.
HSBC, which unlike many rivals received no state bailouts, said chief executive Michael Geoghegan would donate up to four million pounds to charity in what was described as a personal decision.
HSBC's move was swiftly followed by Standard Chartered, whose chief executive Peter Sands decided to give his 2.1-million-pound bonus to charity. This too the group called a personal decision. Sands made the gesture despite guiding the emerging markets bank to record profits and income during 2009.
Standard Chartered said: "Like most bankers, we are conscious that the world has changed and that we must work together with regulators, governments and the rest of the industry to secure a better financial system, if we are to support the global recovery and to focus on the socially-useful aspects of banking.
"The issue of bonuses has been much in the spotlight ... We pay for good performance and we do not reward failure. And we have continued to produce record income and profits on a sustained basis," the bank added.
Bank bosses are eager to defuse public anger about the bonus culture, which many observers blame for encouraging the kind of excessive risk-taking that tipped the world economy into crisis.
Barclays threw down the gauntlet to its rivals when it declared that top executives had dropped their bonuses. That set the tone for other banks because Barclays survived the global financial crisis intact, without taxpayer handouts, and also saw its profits rocket by 114 percent in 2009.
The state-rescued Lloyds Banking Group followed suit last week when its chief executive Eric Daniels revealed he would not collect his annual bonus of 2.3 million pounds.
Lloyds, which is 41.3-percent state owned after being bailed out with billions of pounds of taxpayers' cash, said it was "mindful of the ongoing public debate on the issue of bonuses in the banking sector."
Royal Bank of Scotland, which is 84-percent state-owned, also announced that its chief executive Stephen Hester would waive his bonus of 1.6 million pounds despite narrowing losses in 2009.
However, banks have still dished out bonus pools to their best workers, arguing that some of their top talent could jump ship if they were not paid the going rate.
RBS said it was determined that there would be "no reward for failure" and pointed out that "senior executives responsible for the overall losses" -- such as former chief executive Fred Goodwin -- had left the company.
Britain's banking landscape has undergone huge changes since 2007, with major lenders such as RBS and LBG partly nationalised in the wake of the financial crisis.
- AFP/ir
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