When snow-fuelled chaos forced Heathrow airport boss Colin Matthews to waive his bonus in December 2010, such remunerative restraint was extremely rare. But in recent weeks the single snowflake represented by Mr Matthews has turned into a flurry, as a growing number of company heads feel obliged to give their bonuses a miss as discontent grows about corporate "rewards for failure" among shareholders, politicians and the public.
Two more senior businessmen joined the bonus-waiving fray yesterday. Tom Albanese and Guy Elliott, the chief executive and finance director of the mining giant Rio Tinto, are forgoing a salary top-up as retribution for an overpriced acquisition back in 2007 which they have just written down by $8.9bn (£5.6bn). The pair received bonuses of $1.6m and $1.3m respectively in 2010.
The writedown, taken against the Alcan aluminium business Rio acquired at the top of the market in 2007, plunged the group into the red during the second half of 2011, the company said yesterday. Furthermore, it dragged down full-year profits by 59 per cent to $5.8bn.
"As the acquisition happened on my watch, I felt it only right not to be considered for an annual bonus this year," said Mr Albanese.
His move comes two weeks after Sir Bill Gammell bowed to shareholder pressure and dropped a £2.5m bonus he was due for offloading Cairn Energy's Indian assets to Vedanta last year.
Sir Philip Hampton and Stephen Hester, Royal Bank of Scotland's chairman and chief executive, and Lloyds TSB head Antonio Horta-Osorio have also declined their bonuses of late. Meanwhile, Bob Diamond, the head of Barclays, which will unveil its full-year results today, is understood to be considering a similar move. In a further sign of what a hot topic pay has become, Barclays customers are so enraged about the bumper profits and Mr Diamond's rumoured £2m bonus that they were threatening yesterday to shut their accounts in protest.
Furthermore, there is increasing talk of "clawing back" bonuses that have already been given, most notably in the case of former Lloyds Banking Group chief executive Eric Daniels.
"There was a period where lots of bankers waived their bonuses in the aftermath of the financial crisis, but what makes this different is that it's spreading to non-banks," said Tom Powdrill, of the Pirc shareholder group. "Clearly the mood music around executive pay has changed again," he added.
The Labour leader, Ed Miliband, launched a fresh offensive against George Osborne yesterday, following the Chancellor's defence of big bonuses for City bosses on Wednesday.
He called Mr Osborne "the last bastion of an old mindset" in a speech at Sheffield University. In an apparent response to the Chancellor's comments this week that there are "those who are trying to create an anti-business culture in Britain", Mr Miliband added: "It is pro-business to demand responsibility at the top and an end to the something-for-nothing culture which has damaged our economy in the financial crisis at every level, wrecked businesses and left everyone else squeezed."
Sir Bill Gammell
You wouldn't want to run into Cairn Energy's founder Sir Bill Gammell in a dark alley. The former Scotland international rugby ace still looks like he can handle himself. So perhaps we should admire the oil explorers' shareholders for having the guts to stop the board paying him a £2.5m special bonus last week. It was proposed to thank him for the lucrative sale of its Indian operations for a cool £3.5bn – but shareholders saw it as the stamp of a high-handed board which failed to consult with them enough. They threatened that if the directors didn't have a rethink, they would vote against the plan at Cairn's annual meeting. The board relented. Sir Bill's proposed handout was part of a £4m bonus deal, including £1.4m to compensate him for retiring from the position of chief executive to become chairman.
We don't know if Eric Daniels has already spent the £1.45m bonus he was paid last year. Given his passion for collecting fine art, he may well have done. But that won't wash with the lawyers acting for his old employer, Lloyds Banking Group. They want him to give back every penny to compensate shareholders for the £3.3bn hit the bank took last year because it had been mis-selling payment protection insurance to an unwitting public. In total last year, Lloyds directors were given performance-related pay of just over £5m for 2010/11. That's not a huge amount by the standards of Daniels' home country of the US. But many investors believe he should just "do the decent thing" like his successor, Antonio Horta-Osorio, who eschewed his bonus following his two months' sick leave due to exhaustion.
Sir David Higgins
Network Rail's bosses were always going to be under pressure over their pay deals, especially at a time when cash-strapped passengers are coping with delays and seemingly continuous fare rises. Labour smelt blood and declared the bonuses "unjustifiable". Transport Secretary Justine Greening agreed. Under the rail operator's constitution, she did not actually have the power to vote down the payments, but the chief executive Sir David Higgins this week said he and his six fellow directors would waive their entitlements, instead giving them to the safety improvement fund for level crossings. Wise Sir David, who had been eligible for up to £340,000, said he and his colleagues had decided to refuse the bonuses even before the political row.Reuse content