Last October I wrote about Towergate insurance groups decision to pay huge bonuses to its directors irrespective of the companies poor financial performance.
“In 2006 the company made a net profit of £4 mill, and paid £14.2 mill to its executives as bonuses. In 2007 the company made a net loss of £12 mill and, guess what, paid £13 mill as executive bonuses!”
That decision was be perceived to be unethical by some (not all), but four months later it is clear that the greed of these directors (and I assume others like them in businesses across the country) is directly contributing to the current economic crisis.
The Guardian reporting this week on the financial woes of Lloyd’s and HBOS noted:
“Another firm, Towergate, an insurance group backed by HBOS and Lloyds, has breached covenants and is struggling to repay its debts.”
For those who still believe that ethically questionable decisions, taken in board rooms across the country, do not have a direct effect on them then this article in the Insurance Timesabout office closures and job losses at Towergate may make you reconsider.
So while our unemployment figures are rising and we head deeper into recession, government money is being used to bail out the banks, who’ve loaned money to companies, who pay themselves bonuses rather than meet their financial obligations.
In order to streamline this process and cut out the middle man perhaps we could just send our tax contributions direct to those who are still sitting pretty.