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Carne told MPs that the level of bonus that he had renounced was "in the tens of thousands" as missed performance targets would have cut his entitlement anyway.
While some level of bonus may be motivating, the larger issue is the demotivating effect that inequitable compensation has on lower-level employees.
Every member of staff from the chairman to Saturday shelf-stackers gets the same level of bonus – which has this year been set at 15%, or about eight weeks' pay.
For a long while he claimed to be "agnostic" about the level of bonus payments, saying only that these should be considered reckless if the incentives were strong enough to put a bank at risk.
In this case, an increase in the level of bonus tax can motivate the manager to invest more effort in this uncertain task and hence exposes the firm to a higher level of risk.
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"There is a general feeling that the level of bonuses we've seen have been obscene," he said in a telephone conversation on Thursday.
Wall Street was forecast to pay out the second-highest level of bonuses on record, by the state comptroller of New York, Thomas DiNapoli, while in the City of London a healthy bonus season was also expected.
Burns said the level of bonuses awarded to the channel's management team and other members of staff was partly to recognise the "huge effort" which went into the channel's Bafta-winning coverage of the Paralympics last year.
The political storm was unleashed by a report compiled by the New York State comptroller, Thomas P. DiNapoli, which found that New York financial executives had received the same level of bonuses last year as they had in 2004.
Speaking days after airing controversial proposals for a tax on international financial transactions in order to curb excessive bank profits, Turner told Sky News that the FSA cannot go beyond its remit and start imposing limitations on the level of bonuses.
The FSA said in August that it would frown on multi-year pay guarantees: it was not concerned with the absolute level of bonuses unless the incentives were likely to destabilise the bank.
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Justyna Jupowicz-Kozak
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