With banks set to publish their 2012 results in the coming weeks, the awarding of bonuses, and subsequent public and media reaction to them, is likely to hit headlines.
And following a year in which the reputation of banks took a further hit around issues such as the Libor scandal, Chatsworth CEO Nick Murray-Leslie claimed that banks must learn from past mistakes and focus on being open with details of staff payments.
‘The restoration of public confidence in the banking system and a high performing culture is crucial to economic recovery. Perception is just as important as reality. Banks must be free to remunerate their people to remain competitive but balanced and appropriate to the current financial climate.
‘Whatever their decision on how much to pay out in bonuses this year, banks would be wise to prepare themselves to be as transparent as possible. The Libor fiasco created waves of hysteria, stoked by the perception of banks as having attempted to cover up the full picture. In fact the issue was an operational one which was widespread and poorly explained.’
Over the weekend, it emerged that while RBS boss Stephen Hester has waived any potential bonus for himself, António Horta-Osório, his counterpart at Lloyds, could receive at least £2m.
There was also speculation over Goldman Sachs, which pays out some of the biggest bonuses. Reports including a front page story in the Financial Times claim it is considering holding back on paying out to staff until April, when the 50p top rate of income tax is set to drop to 45p.
Senior partner at Kreab Gavin Anderson Byron Ousey agreed with Murray-Leslie that while bonuses needed to be paid, transparency was key.
‘The banks have had to change since the recent public and media furore, and in the sector there is a lot of attention being paid to the issue,' he said.
‘As such, we will see more transparency, which is important, and also key is that banks are seen to be balancing their rewards across a longer-term period.’
However, he warned against any banks tempted to hold back on paying bonuses until April, pointing to recent scandals over those seen to be minimising corporate tax bills.
‘It would not wash well and should be avoided. In the current climate around corporate tax the move would be seen in a Starbucks context, and perceived as antisocial.'
Goldman Sachs had not responded to requests for comment at the time of publication.