The great bonus clawback

Rio Tinto bosses became the latest to forgo millions in bonuses yesterday as pressure over payouts moves beyond bankers

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.

Eric Daniels

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.

On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style

Olympic diver has made his modelling debut for Adidas

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week