Big bank bonuses are back in the spotlight again, as recently humbled Barclays prepares to slap an extra £1m into the pay packet of chief executive Antony Jenkins. This award is only the tip of the pay iceberg for Jenkins, who, according to the Guardian, could see a final annual pay packet of around £8.5m.
I don’t think that any of us in business care about people earning big bucks, after all, it is one of the motivations we have for setting up or running our own businesses. But something feels awfully out of place when an institution can go through the kind of turmoil we have seen at Barclays (PPI miss-selling, Libor manipulation, interest rate swap litigation) and yet give an appearance that it is simply business as usual. It just doesn’t feel right.
We talk to hundreds of small and medium sized businesses every week and while that only represents a small selection of the overall total, it is salutary to hear that there is a deep resentment with our banking system. A significant majority feel let down by their bank and more importantly by their banker. In the past, business bankers had a detailed knowledge of their corporate clients. This relationship was based on an understanding that the requirements of business change over time. Companies need capital to expand in the good times and need some support in the difficult times.
It is this grand bargain that is unwinding.
We can argue exactly whose fault this is, but it certainly can’t solely be laid at the door of the banks. In these challenging times we must all shoulder some of the responsibility.
However, banks do occupy a unique position in the business life of the country and whether we consider their dominance a good or bad thing; it is in no one’s interest that the current dysfunctional situation remains.
As providers of non-bank financing options our position is quite clear. We believe that it is only with a vibrant financing community that UK business can flourish. Reliance on one sector alone is partially why we are in this pickle. Business owners need viable alternatives, such as pension-led funding, to allow them to grow or maybe just survive – both of which are critical to the long-term health of our nation.