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Sharp divide in public opinion on bonus culture

Financial Times

By Richard Milne in London

Published: April 14 2009 03:00 | Last updated: April 14 2009 03:00

Public opinion is sharply divided over bonus culture in the wake of the credit crunch, according to an opinion poll from Financial Times/Harris.

Continental Europeans believe bonuses should form a smaller part of executive pay in the future, but the British and Americans oppose this idea. Between 65 and 79 per cent of Germans, French, Italians and Spanish favour a smaller role for bonuses. But only about a third of people in the US and UK support such a move, with about the same number opposing it.

The poll findings underline the different views on reforming executive pay in spite of widespread disgust at the behaviour of business leaders in the financial and economic crises.

They highlight how the British and American public are more willing to distinguish between specific bad behaviour in this crisis and the need to reward business leaders properly in the future.

In other regards, Anglo-Saxons and continental Europeans were united in outrage over business leaders, with about threequarters of people from all countries believing that managers were overpaid and unethical.

The results underline the depth of public anger, particularly over executive pay, after several high-profile cases at groups such as AIG, Royal Bank of Scotland and Deutsche Post.

About three quarters of people polled in the UK, US, France, Germany, Italy and Spain also thought that governments should be able to claw back bonuses or pensions paid to managers at companies that have received bail-out money.

Such cases have caused anger. Klaus Zumwinkel, the former chief executive of Deutsche Post, drew scorn in Germany after receiving millions in pension payments after being convicted of tax evasion. Sir Fred Goodwin, the former head of RBS, is refusing to hand back his pension even though he has been blamed by some observers for causing the problems that led to the bank having to be bailed out by the UK government.

Outrage is felt not just by the general public but by fellow business leaders. Jorma Ollila, chairman of Nokia and Royal Dutch Shell, said: “It doesn’t help any of us when we have such public instances of excess and even wrongdoing.”

According to the FT/Harris poll, Germans are the most negative on business leaders, following a series of scandals at leading companies including Siemens, Volkswagen and Daimler.

Some 75 per cent of Germans say their opinion of managers has worsened since the start of the economic crisis, against 71 per cent in France, 68 per cent in the US, 67 per cent in the UK, 62 per cent in Spain and 57 per cent in Italy.

Germans also score top on finding business leaders unethical, with 81 per cent; overpaid at 88 per cent; and that governments should claw back bonuses at 82 per cent. “The public rage against business should worry every single chief executive. I’m not sure I know what the answer is,” said the head of one German industrial group.

The poll was conducted online by Harris Interactive among a total of 6,449 adults in the UK, France, Germany, Italy, Spain and the US between March 25 and 31.

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