THE TELEGRAPH: The Chancellor today criticises the culture of rewarding failure in the City by giving bonuses to executives who appear to have done little to deserve them.
In an interview with The Daily Telegraph, Alistair Darling says that as the country heads into an economic downturn, company boards must be able to justify large bonuses. They should apply the "next-door neighbour test" of whether the payouts would be regarded as reasonable and responsible in a climate when millions of households are struggling with rising living costs, he says.
"People get fed up if they see others getting great big bonuses and they can't actually see what they did. It can be extremely frustrating," Mr Darling says.
"Boards need to ask themselves, 'Are we behaving reasonably?'… If you're leaning over the fence talking to your next-door neighbour, can you justify what you've done?"
City bankers made an estimated £7 billion in bonuses last year. The bumper bonus round was one of the largest ever for investment bankers, despite the global economic turmoil and significant falls in the value of shares on stock markets around the world. Alastair Darling Attacks Bonuses for City Failure >>> By Rachel Sylvester
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