Performance related pay – some food for thought BA v Banks

Image from slate.com

We’ve all heard the rumpus about bankers getting bonuses while the bank is still loss making. I can’t say I agree at all, as I can’t see a reason why someone should be substantially rewarded when losses are being made. While reading the news recently (April 1, 2011), I noted that British Airways CEO Willie Walsh, did not take a bonus for two years while the company was loss-making (see here). Contrast that to Royal Bank of Scotland. According to the Guardian, bonuses totalling £950m are to be paid out despite £1.1 billion in losses. Or out another way, the loss would be £150m if no bonuses were paid out.  I am not getting into the personalities or the companies, but surely what the likes of BA have done is both logical and financially sound.