In an interview with the BBC’s Today programme, Sir Philip defended RBS’ decision to award a bonus of almost £1m to chief executive Stephen Hester, saying he was doing “one of the most challenging and demanding jobs” in business.
However, he acknowledged that banker pay has been “too high for too long” and said: “Essentially, particularly in the banks, particularly in the investment banks, shareholders have done pretty badly and employees have done pretty well. That needs to be corrected.”
Sir Philip added that pay is falling in the banking sector.
His comments come as Ed Miliband attacked the bonus culture in all sectors, and called for a Commons debate and vote on the practice next week.
He said in a speech today that “too many are getting bonuses which are too big, too often” and are often “based on one-way bets rather than genuine reward for risk”.
Miliband said that banks must develop a “culture of responsibility” and not become isolated from the rest of the economy and society.
“This is a call on banking to recognise it has reached a crossroads. This is a call on banking to recognise that it should take the path of change. To recognise that we succeed or fail together,” he said.
The comments come in a week that has seen RBS’ Stephen Hesterforced to turn down his bonus after a public and political backlash and former RBS boss Fred Goodwin stripped of his knighthood for his part in the failure of the bank.
Miliband said that these events were “symbols of public discontent with a system that is not working any more”.
However, he argued that the debate around pay and bonuses must not focus on individual cases but on a wider issue of the role of banking in the economy and society.
