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RBS, OWNED BY US THE TAXPAYER,to give massive bonuses next month
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druidhFree Member
spoomplim – Member
To satisfy everyone* what ought to happen is that RBS should be obliged to operate un-profitably.In which case you’re happy to have a state-owned bank and not get any profit from our current shareholding? are you aware of how many Billion we could be talking about?
Conqueror – Member
druidh, personally Im not as comfortable as others with an economy that is so reliant on the financial services. But like it or not, thats what weve got.Just my opinion.I concur
TandemJeremy – Member
Druidh – serious question. Do you really think these guys would leave the country if their bonus was reduced to hundreds of thousands rather than millions?What makes you think they’d have to leave the country? Lots of foreign owned banks already exist in the UK.
Are they that irreplaceable?
Well – you could always apply for a post….
druidhFree MemberWell – that’s one software bug not fixed in the recent changes….
spoomplimFree MemberWhy should any banks make a loss? banks are in the position to efffectively create money. If every customer went to the bank and said they wanted to withdraw their money the banks can’t do it. There is far less physical money in circulation than electronic money in the system.
dont be daft mrmo. Banks cant print their own profit.
Id concede that’s its feasible that they dont properly value the assets they create when they do “print money” (issue loans) which would turn a profit into a loss if it was correctly put through the P&L.
Fresh Goods Friday 696: The Middling Edition
Latest Singletrack VideosFresh Goods Friday 696: The Middlin...TandemJeremyFree MemberI think part of what gets me here is the double standards – as I said before apparently others don’t need money to motivate them and if train drivers ( for example) threaten to withdraw their labour if they don’t get pay rises they get castigated for their greed – but apparently these bankers are irreplaceable and would all leave the country as other countries are desperate for them unless we stuff their mouths with gold.
druidhFree MemberNothing to stop all the train drivers(for example) similarly handing in their notice and getting a job with a competing company for better wages.
Ah but they don’t, they go on strike instead….
spoomplimFree MemberIn which case you’re happy to have a state-owned bank and not get any profit from our current shareholding? are you aware of how many Billion we could be talking about?
I’ll clarify. Perhaps I should have said “less profitably”.
the impact on national wealth of reducing the cost of financing private sector business (by forcing the financial market to make lower returns across ALL the banks, not just RBS) would outweigh the loss in real return on our equity holdings in RBS.
LiferFree MemberGrahamS – Member
The ‘talent’ angle is the biggest load of BS. Absolute rubbish.
These people were, and still are, making billions for their companies. Are you?
They may not have more “talent” than you, but they have more earning power.I’ve got my impressed face on now.
EDIT – nope it was a burp.
allyharpFull MemberMuch as I despise the ****s, Aren’t they contributing something like 11% of our GDP at the moment?
If we actually had a manufacturing base, or anything so old-world and quaint then we could tell ’em to sling their hooks over to Hong Kong or wherever. As it stands they’ve got us by the short and curlies. And by god, don’t they know it!!
Just the point I was going to raise.The bonus culture is out of control, but fiddling with “OUR” bank isn’t a smart way out of it. We need a hard industry wide ruling but of course that’s just going to push them all out of London and the UK as a whole. Whilst that might sound terrific, what would the UK actually have left that makes any money and pays taxes to the government?
Car manufacturers? Nope, we sold all those.
Tourism? Let’s follow the lead of the Spanish and Greek economies then.
Tesco?… hmmmTandemJeremyFree MemberDruidh – but were are all these bankers jobs going to appear from? At teh moment the rival banks have folk doing this job, are they going to sack the people they have doing this to take on the other ones? are they going to expand so they have more staff?
spoomplimFree MemberAt teh moment the rival banks have folk doing this job, are they going to sack the people they have doing this to take on the other ones?
banks will always aim to improve their gene pool. If better talent becomes available they are mercenary and will off load poor performers to make room to capture a big hitter.
druidhFree MemberTandemJeremy – Member
Druidh – but were are all these bankers jobs going to appear from? At teh moment the rival banks have folk doing this job, are they going to sack the people they have doing this to take on the other ones? are they going to expand so they have more staff?Effectively, the latter.
ConquerorFree Memberallyharp thats the nail on the head right there
real wealth generation
if none of the companies exist that the banks trade on… what is left to trade on?
and on this front we are fairly screwed, as we are not awash with resources or making loads of stuff people want to buy
noteethFree MemberI’ve just finished three nights in an emergency admissions unit, where I’ve watched various doctors, nurses and tech staff go the extra 10,000 miles for seriously ill patients, in incredibly demanding circumstances.
If any banker near me dribbles on about long hours, stress and the need to motivate the brightest and the best, I swear I will fill their face in.
“Worth” is a grossly abused term.
allyharpFull Memberare they going to expand so they have more staff?
Sounds like creating jobs that weren’t really needed for the sake of employing someone; rather than employing to fill roles there’s actually demand for. Sounds a bit like a government, and they’re not very good at making money…
mrmoFree Memberdont be daft mrmo. Banks cant print their own profit.
Id concede that’s its feasible that they dont properly value the assets they create when they do “print money” (issue loans) which would turn a profit into a loss if it was correctly put through the P&L.
Not saying banks print there own profits, but as you note they are in the position to create loans and in doing so increase their asset base, this is one of the reasons that so much effort seems to be put into maintaining house prices, they need to keep the balance sheets looking ook. Banks can only lend on the basis of their cash asset base. See fractional reserve banking.
druidhFree Membernoteeth – Member
I’ve just finished three nights in an emergency admissions unit, where I’ve watched various doctors, nurses and tech staff go the extra 10,000 miles for seriously ill patients, in incredibly demanding circumstances.If any banker near me dribbles on about long hours, stress and the need to motivate the brightest and the best, I swear I will fill their face in.
“Worth” is a grossly abused term.
But then the £61Bn in tax revenues they generated does go some way towards paying for all those hospitals, doctor etc?
noteethFree MemberBut then the £61Bn in tax revenues they generated does go some way towards paying for all those hospitals, doctor etc?
I’m getting bored of this line, tbh. It hardly excuses the rank greed on display.
scaredypantsFull Memberbanks will always aim to improve their gene pool. If better talent becomes available they are mercenary and will off load poor performers to make room to capture a big hitter
So are there poorly performing individuals ?
Do they actually lose money ?
To my memory, there was that Leeson geezer and maybe 1 other French or Belgian or something who’ve made the news for it – and those losses were comparatively small (wasn’t Leeson “only” about a billion dollars?) in relation to the purported profitsI genuinely don’t “get” investment trading and what the balance of money in the whole system is/does. Whole thing (apparent value of it – socially and financially; why daft gambling like derivatives/futures etc should be allowed) seems ludicrous to me
mrmoFree MemberBut then the £61Bn in tax revenues they generated does go some way towards paying for all those hospitals, doctor etc?
And where did the loans that payed for PFI investment come from? the banks lent on terms that mean they don’t loose. Who owns the trains? Porterbrook which is owned by Banks, so they take another cut.
NorthwindFull Membermrmo – Member
“how about this for a thought, these highly paid bankers, FAILED.Yup the bank had to be bailed out by the tax payer because they screwed up. Correct me if i am wrong but there is a tendancy for workers who fail to loose their jobs not to receive huge bonuses and keep their jobs.”
I guess this sums up the problem with public opinion and kneejerk reactions quite nicely- Simon Hester joined RBS in 2008 and the other executive director and the group chairman both took over in 2009. The reason? Fred Goodwin failed, and lost his job. Therefore I grade your rant an F.
GrahamSFull Member-Do banks have to give bonuses? The govt could force them all to abandon bonuses
That was the OPs point nor my argument: the original post was that as a state-ownef bank the RBS should hugely cut pay, which would be virtuous but foolhardy in my opinion.
Yes the govt could certainly try to force banks to drop bonuses for their UK-based staff, possibly by changing the tax laws so that such bonuses were unworkable. Obviously their international staff would still get bonuses, and the UK would get much less tax revenue and a slow talent drain, but we’d all feel good inside. 🙂
I’m off to bed but I’ll leave a question for our union rep TJ:
Where would I stand if I had signed a contract that said I would receive a large guaranteed bonus if I met my targets; I worked hard and exceeded those targets, but the new management board said they had decided weren’t going to pay me after all?
ComradeDFree MemberWhat about the 99% of the hard working staff that had nothing to do with the failure of the bank? Do you not think they deserve a bonus?
ElfinsafetyFree Member‘RBS, owned by us the Taxpayers’; what, in the same way that ‘the Goverment is answerable to the people’? 😀
noteethFree MemberI guess this sums up the problem with public opinion and kneejerk reactions quite nicely
I suspect the public are understandably miffed that people – different people, granted – are still harping on about the need to reward “talent” in this manner.
dmjb4Free MemberSome perspective needed here.
Most bank employees don’t earn a lot, live nowhere near London and had as much to do with RBS and HBOS keeling over as the postmen and plumbers on here. Possibly less, as its statistically certain that some of you plumbers and posties will have huge self-cert or high risk mortgages from 2005-8 that your bank would never have been able to offer you if it weren’t for MBS and credit derivatives.
I don’t get this issue with bonuses. It’s performance related pay: low basic and a bonus if you work hard. More people should be paid like that: the system might not be perfect, and a few high profile fail cases in London will no doubt come to light shortly, but the alternative is a bigger basic salary and a lower bonus, which won’t encourage anyone in the sector to work hard at all.
A lot of bank employees worked hard all year to meet their call response time targets, make this or that deal work, help some local business or other. They deserve their bonus fair and square, whether its £2k on top of a £20k basic in Sunderland or £15k on £80k in the City.
Look at the total pay over a year: a lot of slackers in other professions take more than that and contribute less to society: estate agents, lawyers, tax avoidance accountants etc.
NorthwindFull Membernoteeth – Member
“I suspect the public are understandably miffed that people – different people, granted – are still harping on about the need to reward “talent” in this manner.”
It’s obvious that a great many of the people who’re outraged have very little grasp of the situation. Lots of people are talking about rewarding failure, not just MrMo, he’s just unlucky enough to have said it here. It was the same nonsense last year- there was a huge stink about bonuses in RBS’s asset finance division, and the same “rewarding failure” bull when in fact that division had always been profitable and was doing brilliantly.
Where it got really interesting last year was the blinkered reaction to the banks announcing their total bonus pools- “rich fat cat bankers” was all we heard but those bonuses went all the way down to the lowest level with people earning not a lot, and the majority of the RBS payout went to people below the average wage. But apparently all bankers are fat cats.
(declaration of interest- I’m ex-HBOS but that just means I’ve got less reason to like the feckers than most people! There’s a reason I’m ex)
TandemJeremyFree Memberdmjb4
The issue is not with the people who get a small performance related bonus – its the few who are taking multimillion pound bonuses. In some cases this has been half of the profits going to this small group
One of the rescued banks investment arm made a few billions in profit – half of this went to a small number of employees – many millions each.
That and the hypocrisy that says we have to stuff these peoples mouths with gold so they work hard but that this doesn’t apply to people in public service such as social workers – where there is a massive shortage of staff but apparently increasing the wages is not needed.
dmjb4Free MemberTJ: I edited my post and added last two para’s before you posted.
noteeth and others have covered your point already: the RBS asset management group beat the market, earned a lot for their bank, and in turn their shareholders and the UK public. The people in that department deserve to be rewarded for their efforts. They deserve something for staying with RBS and making a lot of money for the taxpayer, despite being spat at in the street all year.
Banking is a savagely cut-throat industry: banks pay the exact minimum required to get capable employees.
Prospects.ac.uk gives range of typical *starting* salaries for a social worker as £23500 – £30000. Median salary for a full-time worker in UK is £25,123. If that’s correct, its fair to say that social work is an above average paying career: people in it are wealthier than average.
http://ww2.prospects.ac.uk/p/types_of_job/social_worker_salary.jsp
I’d suggest that if councils are competing to fill roles, salaries will rise. If this hasn’t worked then its clear that money is not the issue, but lack of people at any price or some other structural or political factor.
TandemJeremyFree Memberdmjb4
Its multimillion pound bonuses that people are complaining about – thats individuals each getting millions. Thats not reasonable nor fair reward surely. Its indefensible.
As for the social workers – pay is set nationally and will not rise. So again you claim socail workers do not need to be well paid to be motivated but these gamblers in the investment banks merit multimillion pound bionuses.
Right
🙄druidhFree Memberspeaker2animals – Member
How about bankers can have a bonus but it’s paid 5 years in arrears? The first payment would be based on the business done in year one BUT would also have a review clause of the 5 year activity. Actually, it’s mostly paid in shares – the value of which can go up or down. Tax is payable on the shares when sold and CGT is also liable over the qualifying amount. Furthermore, the shares usually have to be retained for a certain period (typically 3 years) and the value of the bonus can also be reduced certain to company profits etc.
dmjb4Free MemberTJ: If you read my post again, I provided actual evidence that social work *appears* to be a well paid career. I volunteered that the problems with motivation in that sector could be other than financial.
You, however, appear to be of the opinion that the problem with the social work sector is that pay and conditions are collectively bargained. Quick fix for that. Bob Crow and his fat-cat mates won’t like it though.
I’m not defending £1m bonuses. But I’m intelligent enough to know that someone taking a £1m bonus from RBS will have made at least 10x that for the taxpayer. That big bonus looks sensational, but the actual mark-up is insignificant compared to what tesco’s or halfords does.
noteethFree MemberIt’s obvious that a great many of the people who’re outraged have very little grasp of the situation
Riiiiiight.
I think people grasp the situation perfectly. The other night, with a combination of clinical skill, inspired guesswork and plain ol’ luck, my boss repeatedly “beat the market” in fast-deteriorating patients (and probably saved the taxpayer a few bob in the process). Complex & demanding work – now, where’s her bonus?
I’m fugging sick of the rhetoric employed to justify ludicrous salaries. It’s like being asked to admire Bob Diamond’s hair.
LiferFree MemberThe other night, with a combination of clinical skill, inspired guesswork and plain ol’ luck, my boss repeatedly “beat the market” in fast-deteriorating patients (and probably saved the taxpayer a few bob in the process). Complex & demanding work – now, where’s her bonus?
Yes but how many billions has she made? Because that’s the only measure of talent/success/worth that actually matters, apparently.
RioFull Membernow, where’s her bonus?
If your boss is solely motivated by money then maybe she should try her hand at merchant banking instead of (I assume) some sort of medical career. Wouldn’t be my choice but then some people don’t care what they do as long as it pays enough.
hungrymonkeyFree Membergenuinely interested to see evidence of this –
One of the rescued banks investment arm made a few billions in profit – half of this went to a small number of employees – many millions each.
TandemJeremyFree Memberhungry monkey – I can’t find it now – it was reported in a mainstream newspaper. I cannot rememberer which bank. Thus its rubbish as evidence
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