Quizzes & Puzzles0 min ago
RBS excessive bonuses
October 2008, RBS takes £37 billion of taxpayer money to survive.
January 2009, RBS reveal a loss of £28 billion, the biggest ever annual loss in UK corporate history
November 2009, Government increases its stake taking taxpayers ownership of RBS to 80%.
November 2009, RBS board wants to award £1.5billion in bonuses this year.
http://business.times...ce/article6941746.ece
Should RBS be allowed to run the bank as they wish?
or Should the Government as the largest shareholder Veto excessive bonuses?
January 2009, RBS reveal a loss of £28 billion, the biggest ever annual loss in UK corporate history
November 2009, Government increases its stake taking taxpayers ownership of RBS to 80%.
November 2009, RBS board wants to award £1.5billion in bonuses this year.
http://business.times...ce/article6941746.ece
Should RBS be allowed to run the bank as they wish?
or Should the Government as the largest shareholder Veto excessive bonuses?
Answers
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I can't really see what the RBS board is getting at. As the RBS is 87% owned by the taxpayer why do they keep going on about consulting the shareholder. We are the shareholders and until they pay their borrowing back to us we should be in control and what they should receive.
The threats of moving to another company should be treated with the same respect to any other blackmailer. If we paid up where would it all end. Let them go! The people who operate hedge funds are no different from the clients of William Hill except they are using our money.
The threats of moving to another company should be treated with the same respect to any other blackmailer. If we paid up where would it all end. Let them go! The people who operate hedge funds are no different from the clients of William Hill except they are using our money.
I think its just disgusting that they are trying to blackmail the govt and threatening to walk out if they dont get their way.... Some of the staff were expecting £1m bonus - now unless they are earning a crappy wage - how the hell do they really justify this.. if they had not been bailed out by us they wouldnt even have jobs right now!
I really REALLY hope that for once Labour will grow some balls and stand firm with this corporate bullying... Its sickening when so many are scraping to get by....
They ran the company badly - they got us into this mess - what part of that EARNS a bonus for good work???
I really REALLY hope that for once Labour will grow some balls and stand firm with this corporate bullying... Its sickening when so many are scraping to get by....
They ran the company badly - they got us into this mess - what part of that EARNS a bonus for good work???
The company may have legal contracts guaranteeing bonuses to some staff depending on individual performance.
Not paying those could be a breech of contract.
However if it's simply a case of "We need to pay these to attract good staff" then that's not a good enough argument.
If they want to walk - I'm sure the Government will open the door for them - It's not exactly as if there's a shortage of unemployed bankers these days
Not paying those could be a breech of contract.
However if it's simply a case of "We need to pay these to attract good staff" then that's not a good enough argument.
If they want to walk - I'm sure the Government will open the door for them - It's not exactly as if there's a shortage of unemployed bankers these days
The Government didn't pump £65 billion into RBS to help RBS ( a Private Bank) they did it to ensure financial stability as banking is UK's great money maker.
Many of these bankers will have their bonuses tied up in their contract...as did Sir Frederick Goodwin and if Internationally it gets known that the UK Government will not honour these contracts, then "high flyers " will steer clear.
Clash between Bankers and Government, then my money goes on Bankers.
Just remind me.........didn't Mrs Blair and Hariet Harman say that they would get Sir Fred@s pension bonus back by going to court..........what has happened ?...........nothing.
Many of these bankers will have their bonuses tied up in their contract...as did Sir Frederick Goodwin and if Internationally it gets known that the UK Government will not honour these contracts, then "high flyers " will steer clear.
Clash between Bankers and Government, then my money goes on Bankers.
Just remind me.........didn't Mrs Blair and Hariet Harman say that they would get Sir Fred@s pension bonus back by going to court..........what has happened ?...........nothing.
You must have been out that day Squad
They settled out of Court
He handed back £200,000 a year of his pension
http://www.guardian.c...d-goodwin-rbs-pension
They settled out of Court
He handed back £200,000 a year of his pension
http://www.guardian.c...d-goodwin-rbs-pension
jno: if these people are all so talented - how come
"January 2009, RBS reveal a loss of £28 billion, the biggest ever annual loss in UK corporate history "
or are you saying the losses would have been much much worse had these brilliantly talented bankers not done an amazing job?
Lloyds TSB should be criticised too - who was it they bought up? Then come running for money too as they are going to collapse.. what Financial forecaster didnt spot the fact that buying the 'dead weight' bank that they bought was a bad move?? These people are supposed to be very very intelligent - yet they couldnt see that one coming!!!
"January 2009, RBS reveal a loss of £28 billion, the biggest ever annual loss in UK corporate history "
or are you saying the losses would have been much much worse had these brilliantly talented bankers not done an amazing job?
Lloyds TSB should be criticised too - who was it they bought up? Then come running for money too as they are going to collapse.. what Financial forecaster didnt spot the fact that buying the 'dead weight' bank that they bought was a bad move?? These people are supposed to be very very intelligent - yet they couldnt see that one coming!!!
-- answer removed --
nosha...............Problem not only the fault of the banks.
Government said..."look everyone is having a fantastic time.....don't change things
Public were happy borrowing money they knew they couldn't pay back.
FIA were never "up to the job" and took the attitude "if it ain't broke, don't fix it" It was broke,but nobody wanted to admit it.
Then is then....now is now......and we have to move on and if that means bonuses to these boys, then so be it.
Government said..."look everyone is having a fantastic time.....don't change things
Public were happy borrowing money they knew they couldn't pay back.
FIA were never "up to the job" and took the attitude "if it ain't broke, don't fix it" It was broke,but nobody wanted to admit it.
Then is then....now is now......and we have to move on and if that means bonuses to these boys, then so be it.
I'm afraid I am going to have to agree to disagree with you on this one Sqad... I think its a first though!
In my mind - you are rewarded with a bonus for doing a good job.... for high sales, high profits, good teambuilding etc etc.
From the stories we are given in the news (as I dont know anyone in banking) it would appear that the losses RBS made - were the biggest in history. Therefore someone somewhere was doing something very wrong... whther that be poor financial forecasters.. or poor sales or whatever...
This behaviour does not warrant a reward or bonus... If I was as sh1t at my job as some of them clearly were - I would not get a bonus!!
And we must remember - these people would be out of jobs had the bank not been saved.
I was also shocked that the banks won their legal case recently for bank charges - I think that it was wrong - but in this instance I can also see why the Courts had to rule in their favour - as further financial crisis would have been caused by repaying all the charges claimed. However - all these wrongs should not make a right...
In my mind - you are rewarded with a bonus for doing a good job.... for high sales, high profits, good teambuilding etc etc.
From the stories we are given in the news (as I dont know anyone in banking) it would appear that the losses RBS made - were the biggest in history. Therefore someone somewhere was doing something very wrong... whther that be poor financial forecasters.. or poor sales or whatever...
This behaviour does not warrant a reward or bonus... If I was as sh1t at my job as some of them clearly were - I would not get a bonus!!
And we must remember - these people would be out of jobs had the bank not been saved.
I was also shocked that the banks won their legal case recently for bank charges - I think that it was wrong - but in this instance I can also see why the Courts had to rule in their favour - as further financial crisis would have been caused by repaying all the charges claimed. However - all these wrongs should not make a right...
nosha
////In my mind - you are rewarded with a bonus for doing a good job.... for high sales, high profits, good teambuilding etc etc////
That maybe in your mind nosha, but it is not necessarily in the minds of the banking recruitment team
These lads are offered appointments with legally binding non performance related bonuses.
If you had such a contract and you made a "balls up" of the job, would you say "Forget my £1million bonus, I don't deserve it?"
LOL....I wouldn't.
I have a certain sympathy with your thoughts, but clearly we are both out of our league...........LOL
////In my mind - you are rewarded with a bonus for doing a good job.... for high sales, high profits, good teambuilding etc etc////
That maybe in your mind nosha, but it is not necessarily in the minds of the banking recruitment team
These lads are offered appointments with legally binding non performance related bonuses.
If you had such a contract and you made a "balls up" of the job, would you say "Forget my £1million bonus, I don't deserve it?"
LOL....I wouldn't.
I have a certain sympathy with your thoughts, but clearly we are both out of our league...........LOL
Hi Sqad... I get your point - really I do...
But if the bank had been left to collapse and not been propped up by our tax money - then they wouldnt have got the bonus anyway.. just a redundancy payment (if they were lucky!)
The govt should have placed a condition that superseded any contractual agreed bonuses... - Or at least reduced them substantially.... - by 50% or something...
It will be interesting to see how this pans out.... Who will win.. banks or Labour!
But if the bank had been left to collapse and not been propped up by our tax money - then they wouldnt have got the bonus anyway.. just a redundancy payment (if they were lucky!)
The govt should have placed a condition that superseded any contractual agreed bonuses... - Or at least reduced them substantially.... - by 50% or something...
It will be interesting to see how this pans out.... Who will win.. banks or Labour!
It is an interesting point about the contractual nature of some of these bonus schemes. Certainly it is or has been pracgtice to offer people guaranteed Bonuses when starting a new job, but from my knowledge, most of the bonuses after the initial period are perfromance linked.
Where the fiddle comes in is where it looks as if the economic circumstances mean that the performance criteria cnnot be reached, then senior managers start to tinker with the criteria themselves - what we know as moving the goalposts, and which means making the goalposts widerand higherso it is easier to score.
continued
Where the fiddle comes in is where it looks as if the economic circumstances mean that the performance criteria cnnot be reached, then senior managers start to tinker with the criteria themselves - what we know as moving the goalposts, and which means making the goalposts widerand higherso it is easier to score.
continued
Part 2
The other flaw with a lot of these schemes is that they may set criteria which are achieved in part of the business, but not overall e.g My department say exceeds its targets, but the company overall makes a stonking loss. Do I pay the bonus to my departmentand nobody else? A good scheme should really have an overall company performance element to modify the bonus down of that happens to avoid sillies like people getting bonuses as the firm goes bust.
It is often argued that these bonuses are necessary to stop the best people leaving, but at the moment, where are they going to go? And even if they do, there are still good unemployed bankers around itching to have a go.
My last point would be really around the scale of the bonuses being paid. There are getting totally out of kilter with what is a reasonable reward for taking a risk. They are already on high base salaries by most peoples standards and they tend to get rewards related to the amount of money changing hands rather than the difficulty of what they do. For example if you send a sales person into a totally new market where the business has not operated before, then they will have a tough job breaking in and persuading customers to change loyalties. The initial business might be quite small. But compare that to the sales person who goes to see his regular customer, shakes hands and agrees same again as last year - it may be a load of dosh in the transaction, but not a lot of work in getting it.
Many of the directors agree these deals so they can get well paid themselves - you sit on my remuneration committee and approve my pay and I'll sit on yours.... get the idea?
The other flaw with a lot of these schemes is that they may set criteria which are achieved in part of the business, but not overall e.g My department say exceeds its targets, but the company overall makes a stonking loss. Do I pay the bonus to my departmentand nobody else? A good scheme should really have an overall company performance element to modify the bonus down of that happens to avoid sillies like people getting bonuses as the firm goes bust.
It is often argued that these bonuses are necessary to stop the best people leaving, but at the moment, where are they going to go? And even if they do, there are still good unemployed bankers around itching to have a go.
My last point would be really around the scale of the bonuses being paid. There are getting totally out of kilter with what is a reasonable reward for taking a risk. They are already on high base salaries by most peoples standards and they tend to get rewards related to the amount of money changing hands rather than the difficulty of what they do. For example if you send a sales person into a totally new market where the business has not operated before, then they will have a tough job breaking in and persuading customers to change loyalties. The initial business might be quite small. But compare that to the sales person who goes to see his regular customer, shakes hands and agrees same again as last year - it may be a load of dosh in the transaction, but not a lot of work in getting it.
Many of the directors agree these deals so they can get well paid themselves - you sit on my remuneration committee and approve my pay and I'll sit on yours.... get the idea?
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