Quizzes & Puzzles8 mins ago
RBS Boss Bonus: Rich Getting Richer
http://www.bbc.co.uk/news/business-16751691
As this institution is 83% owned by us how can it be that a virtual government employee get almost a million pounds as a bonus? Bankers got us into this mess and still got huge bonuses and knighthoods whilst doing so, so why are they being rewarded further?
Yes there's been a turnaround at RBS but ordinary employees have been made redundant and the bank is still in debt. But as one former member of the government pointed out the RBS boss hasn't leant out as much as promised to small businesses as part of the 'save-ass' deal, so why is he being rewarded for failure to achieve objectives?
As this institution is 83% owned by us how can it be that a virtual government employee get almost a million pounds as a bonus? Bankers got us into this mess and still got huge bonuses and knighthoods whilst doing so, so why are they being rewarded further?
Yes there's been a turnaround at RBS but ordinary employees have been made redundant and the bank is still in debt. But as one former member of the government pointed out the RBS boss hasn't leant out as much as promised to small businesses as part of the 'save-ass' deal, so why is he being rewarded for failure to achieve objectives?
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// "I am reliably told that they feared Mr Hester and much of the board would have quit, if the payment had been vetoed by the government as the majority shareholder," said our business editor. //
In other words the board clubbed together and held the government to ransom. They should have called their bluff and let them quit.
In other words the board clubbed together and held the government to ransom. They should have called their bluff and let them quit.
So much for Flashman getting to grips with the out of touch bankers and their bonus schemes.
He should have let them quit, in the current climate bankers will be ten a penny, I'm sure there's someone just as competent but with a few more scruples and morals who could run RBS. The last numpty got a knighthood for overseeing what almost became global financial meltdown, so how hard can it be?
He should have let them quit, in the current climate bankers will be ten a penny, I'm sure there's someone just as competent but with a few more scruples and morals who could run RBS. The last numpty got a knighthood for overseeing what almost became global financial meltdown, so how hard can it be?
Don't forget though Philtaz, we've got to pay these huge bonuses to get the right people.
I mean if we didn't attract the right people god knows what sort of mess we'd be in right now. We'd probably be in a global economic crisis, taxpayers bailing out banks left right and centre, and Europe on the verge of financial meltdown.
Hang on a minute - we are. How did that happen?
I mean if we didn't attract the right people god knows what sort of mess we'd be in right now. We'd probably be in a global economic crisis, taxpayers bailing out banks left right and centre, and Europe on the verge of financial meltdown.
Hang on a minute - we are. How did that happen?
Strange, I can't recall being asked if I wanted to pay this idiot a bonus, surely as the bank was rescued with the public's money we should have a say in how the bank is ran.
I would have loved to have been a fly on the wall if the government had grown some balls and called the bluff of the greedy cronies. Coffee and false teeth would have been spat all over the board room table when they realised they had been taken up on their threat.
Not much of a threat really though, as I am sure their are plenty of people who would do the job for a lot less than they were being paid, for just sitting on their backsides watching everyone else's bank accounts go down as theirs grew.
I would have loved to have been a fly on the wall if the government had grown some balls and called the bluff of the greedy cronies. Coffee and false teeth would have been spat all over the board room table when they realised they had been taken up on their threat.
Not much of a threat really though, as I am sure their are plenty of people who would do the job for a lot less than they were being paid, for just sitting on their backsides watching everyone else's bank accounts go down as theirs grew.
I dont understand why the government cannot introduce a maximum pay rate.
It could be relative to the minimum rate IE 25 times minimum rate of £6 per hour multiplide by 48 hrs £7200 per week or £374400 per year. the only people who could earn more than that in the UK are say factory owners therefore they will not leave the country and start up elsewhere.. I think anyone earning over £2000 per week should pay 50% income tax too ..
It could be relative to the minimum rate IE 25 times minimum rate of £6 per hour multiplide by 48 hrs £7200 per week or £374400 per year. the only people who could earn more than that in the UK are say factory owners therefore they will not leave the country and start up elsewhere.. I think anyone earning over £2000 per week should pay 50% income tax too ..
The other day, The Independent pointed out that Cameron, Clegg and Cable were wrong to tell us that their hands were tied by an agreement made by the previous government and that a huge bonus HAD to be paid. It seems, according to the paper, that such a clause has not been included in the RBS's man's contract for some time. If true, those named above are lying and even if not - as major investors - the Government could control how much he receives. Either way, guess who loses out?
Whilst we are all uncomfortable with huge payments being made to a few when so many of us are seeing a fall in living standards I think we also need to take a business perspective on this.
I am also uncomfortable though with the idea of reneging on a bonus arrangement that was made between RBS and the previous (Labour) Government who agreed targets and corresponding payments.
I heard that a decision has now been made to cap it to 60% of the actual entitlement under the scheme, but I would need to check that.
I'm not sure whether there was scope (as Quizmonster suggests but the government denies) to withhold the bonus completely even if targets have been met, but I think it sends the wrong signal to renege on agreements.
We all feel uncomfortable with huge bonuses to bankers but incentives are common in boardrooms. In fact they are used in many areas football, sales roles and many other jobs where we have objectives and pay is linked in some way to performance). If we want to attract the best people and use the incentive schemes to best effect we need to be seen to stick to any deal.
Whether the targets were wrong/too easy to achieve and the agreed payment scale was appropriate when negotiated, is another matter.
I am also uncomfortable though with the idea of reneging on a bonus arrangement that was made between RBS and the previous (Labour) Government who agreed targets and corresponding payments.
I heard that a decision has now been made to cap it to 60% of the actual entitlement under the scheme, but I would need to check that.
I'm not sure whether there was scope (as Quizmonster suggests but the government denies) to withhold the bonus completely even if targets have been met, but I think it sends the wrong signal to renege on agreements.
We all feel uncomfortable with huge bonuses to bankers but incentives are common in boardrooms. In fact they are used in many areas football, sales roles and many other jobs where we have objectives and pay is linked in some way to performance). If we want to attract the best people and use the incentive schemes to best effect we need to be seen to stick to any deal.
Whether the targets were wrong/too easy to achieve and the agreed payment scale was appropriate when negotiated, is another matter.
I'm not keen on bonus systems, full stop. If someone is good at their job then they should be paid an appropriate salary. I don't believe this talk of incentives whether in boardrooms or elsewhere. They seem to be an excuse to cover the folk looking after their own and scratching each others back. Either one has the incentive to achieve the task or one doesn't. And anyway one doesn't see the common folk being offered a near million pound gift just to do their job well (or not as the case may be).
In each particular case that is brought to light there is always the justification that it was agreed beforehand and should be paid, but that ought not have been agreed beforehand and anyone who was responsible for offering it should required to pay it out of their own pocket.
In each particular case that is brought to light there is always the justification that it was agreed beforehand and should be paid, but that ought not have been agreed beforehand and anyone who was responsible for offering it should required to pay it out of their own pocket.
I am not convinced either, OG, but it seems common now in my experience. Organisations I have worked for/with over the last 10-15 years have had annual performance management systems with objectives/targets, and pay rises are linked to performance, with failure to achieve objectives resulting in no increase.
With board pay the shareholders do have a say but tend to support the board if they feel the board is delivering the right results for them
With board pay the shareholders do have a say but tend to support the board if they feel the board is delivering the right results for them
I recall seeing an interview on American TV at the time of the last financial melt-down in 2008, when Lehman Brothers collapsed. A very senior bank executive claimed, "We have to pay these figures in order to keep the best people." The interviewer replied - virtually screaming - "But you haven't GOT the best people!" Much the same thing has already been said on this thread.
Click http:ind.pn/3xSkJ for a link to the Independent article I referred to earlier, which pointed out that there was no contractual obligation whatever for the RBS boss to be allowed to wander off with almost a million quid of ours in his pocket...more if the shares increase in value. His being permitted to do so, it would seem, has nothing to do with the Labour government.
Click http:ind.pn/3xSkJ for a link to the Independent article I referred to earlier, which pointed out that there was no contractual obligation whatever for the RBS boss to be allowed to wander off with almost a million quid of ours in his pocket...more if the shares increase in value. His being permitted to do so, it would seem, has nothing to do with the Labour government.
Sorry about that, F. Try http://ind.pn/y3xSkJ
Thanks. So I can see that the government, a she major shareholder, could have made it clear it wanted the agreed bonuses not to be paid, and the remuneration committed may then have followed its advice.
However, whilst I think that stopping the bonus would have been a popular electoral move, it could be a risky step in that it would create uncertainy when future targets and remuneration arrangements are made- if they really did want to bring in the best business leaders would they be prepared to join if they knew that the 'get out clause' could always be used.
I am surprised that Clegg has been caught out though by this
However, whilst I think that stopping the bonus would have been a popular electoral move, it could be a risky step in that it would create uncertainy when future targets and remuneration arrangements are made- if they really did want to bring in the best business leaders would they be prepared to join if they knew that the 'get out clause' could always be used.
I am surprised that Clegg has been caught out though by this
I (and I'm sure I speak for 99% of taxpayers) don't particularly care what deals/pay mechanisms may or may not have been in place prior to Flashman and his poodle taking over.
It's a question of morals and if Hester has the merest shred of decency in him he will refuse the bonus, particularly as 2,000 of his employees are shortly to be out of work.
There are a host of reasons already documented as to why this is totally unfair and goes against the grain in the current financial climate. The Lloyds TSB CEO set an example a week or two ago by refusing his bonus so let's see Hester do the same and perhaps set a trend.
To me it seems fairly obvious. If you're in the red, NOBODY gets a bonus, particularly when you're 83% state owned. If you're in the black MAYBE you get a bonus and even then certainly not one that almost matches your yearly salary!
So it's over to you Mr Hester. You were happy to take on this job at £1.2 million per annum and shares have fallen in RBS since you were appointed so let's see a modicum of morality in not taking the bonus. Prove to the taxpayer that the opinion we have of bankers is not going to be borne out.
It's a question of morals and if Hester has the merest shred of decency in him he will refuse the bonus, particularly as 2,000 of his employees are shortly to be out of work.
There are a host of reasons already documented as to why this is totally unfair and goes against the grain in the current financial climate. The Lloyds TSB CEO set an example a week or two ago by refusing his bonus so let's see Hester do the same and perhaps set a trend.
To me it seems fairly obvious. If you're in the red, NOBODY gets a bonus, particularly when you're 83% state owned. If you're in the black MAYBE you get a bonus and even then certainly not one that almost matches your yearly salary!
So it's over to you Mr Hester. You were happy to take on this job at £1.2 million per annum and shares have fallen in RBS since you were appointed so let's see a modicum of morality in not taking the bonus. Prove to the taxpayer that the opinion we have of bankers is not going to be borne out.
You decide if he's worth his bonus:
http://www.bbc.co.uk/news/business-16759963
I particularly like this bit:
Mr Hester has conceded that it will take longer than the promised five years for RBS to revive the bank - which is effectively breaking one of his key promises since taking control of the bank.
---------------------------
So as the government are scared that he'll resign he's got himself more than 5 years of bonuses to look forward to, guaranteed!
And as they both went to Oxford I'm sure Flashman will 'see him alright'.
Not that I'm cynical about these things......
http://www.bbc.co.uk/news/business-16759963
I particularly like this bit:
Mr Hester has conceded that it will take longer than the promised five years for RBS to revive the bank - which is effectively breaking one of his key promises since taking control of the bank.
---------------------------
So as the government are scared that he'll resign he's got himself more than 5 years of bonuses to look forward to, guaranteed!
And as they both went to Oxford I'm sure Flashman will 'see him alright'.
Not that I'm cynical about these things......
Mr Hesten knew exactly what he was letting himself in for when he accepted the post at RBS therefore he was bought in to turn the bank around, that was his job description. So why is he getting a bonus for just 'doing' his job. It seems to me that a bonus gets paid irrespective of performance and is just an addition to your salary at the end of every year. I think a freedom of information question should be asked i) Was the bonus clause actually written into his contract? ii) What exactly were Mr Hestons targets to receive these bonuses, were they actually met or exceeded, were they unrealistically dumbed down so even a bank clerk could achieve them. In any case the government as usual has distanced themselves from this and said it is up to the board and ther company brought in to run the bank to deal with. Shirking responsibility as usual.
Thank goodness he is to get the bonus in shares that cannot be cashed for another 3 years. By that time the shares may have reduced further in price as they have already lost 50% of their value. Then there is the tax to pay on the shares. If at 50% then maybe he will be left with 1/4 of their original value. If he does a really bad job the RBS shares will disappear completely.
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