[Closed] if you want to complain about RBS boss's £960,000 pay - here's his email!

Never argued that actually - I may have argued that there has never been unregulated free-market capitalism but that is an entirely different point - I would lose my job if I argued what you are saying!!

I did argue that the crisis was more of a failure of capitalists than capitalism - a theme taken up by a number or professors over the past month in the FT for example. But again that is different.

An A level economics student understands that your first point (that you ascribe to me) is wrong!

I'm unimpressed by patronising and condescending attitudes, specially when the sense of superiority comes from a disciple of a flawed economic model who continues to remain in denial.

Me too.

But Ernie, as mefty said, I know jack all about banks. You have been telling me that everyone knows that banks are profitable. Please can you explain. A friend of mine was telling me recently that banks were basically fundamentally low profitability businesses and he invests in them.

Then perhaps I can agree with those on here that Hester and was it Hourican that someone mentioned are worth their salaries. I thought I was agreeing with you here?

So if he goes, billions of public money will be lost ? Let's hope he doesn't get run over and killed while crossing the road tomorrow eh ? No doubt he gets accompanied everywhere by a team of fully equipped paramedics just in case of an emergency. Britain really would be up Shitcreek without a paddle if something were to happen to him. And all he asks in return is for lots of money. Bless him.

patronising and condescending?? 😉 {at least i apologised when I was rude!]

Never argued that actually

Yep, you have.

teamhurtmore - Member

I think that history will tell us that we have seen a failure of capitalists rather than capitalism.

Unregulated free-market capitalism was pretty much what we had in 2008, but if you want to argue that it wasn't unregulated and free-market enough for you to call it that, then fair enough.

The fact remains you claim that there was nothing wrong with the economic model in place in 2008 (whatever you like to call it) and it was only the people who were at fault. Firstly almost no one agrees with you hence the propping up of failed institutions, introduction of quantitative easing, etc, all of which was in direct contradiction to the existing protocols. And secondly 'the market' is a wholly man-made entity, if the people who operated within it were wrong, then so was the system. You can't distinguish the two.

As I said, blaming the capitalist and not capitalism is a cop out and an obvious attempt to remain in denial of the unpalatable truth that something which you believed in turned out to be flawed.

Ernie - fair enough to be cross if I was rude, but doesn't justify talking bllx about what I have or have not said.

The point that I have made is that it is incorrect to describe the UK (or any other economy) as having unregulated free markets. That is NOT the same as believing that we should have them, rather that it analysing what went wrong in the crisis one has to start with the correct terms of reference. Most global economies including the UK are mixed economies that share characteristics of free and command economies. Governments play a very significant role in the allocation of resources in the UK and were one of several players who were responsible for the financial crisis. So, as the FT argues, to start by saying that the crisis was caused by free market capitalism is at best sloppy thinking and at worst downright misleading.

Even financial markets are not free. Significant intervention takes place not least in exchange rates (the euro) and the level of interest rates. When central bankers deliberately kept rates too low in order to cover for their previous errors, this is hardly a free market and yet it contributed to the crisis. Ditto current negative interest rates.

Why are you quoting QE. A monetarist tool that I have argued is of limited use right now. So get your facts right otherwise we both look like ar***** and surely one is enough of that. And no I am not being rude about you.

If you do not like it then do something about it. This is only happening because we sit back and do nothing. All we have to do is get enough RBS customers together to complain and then threaten to close their accounts in say March and there may be enough pressure that things may change. If you think this won’t work well we managed it in the Netherlands.

[url= http://www.guardian.co.uk/business/2011/mar/27/dutch-bankers-bonuses-axed-by-people-power ]null[/url]

Even financial markets are not free.

Yeah I think we all know that. It's still offered to us as the "free-market" though, even though we both know that there is no such thing. I have repeated said on here that the most important minister after the PM is always the chancellor/finance minister. If what they said about the ability of the capitalism and the free-market was true, then the finance minister wouldn't have much to do other than twiddle his thumbs. But as it is the finance minister has to operate at more or less a permanent crises management level. Capitalism simply cannot look after itself or provide what is required of it without constant government interference. I'm glad we both agree on that.

Anyway, we digress, which I'm sure was your intention. So let's get back to your point, which is :

[i]".....that we have seen a failure of capitalists rather than capitalism"[/i]

That is nonsense, for the reasons I gave above. What we have seen is a failure of capitalism, however much you want to dress it up as something else.

BTW RE : [i]"Why are you quoting QE".[/i] Try reading it in its context - QE, along with nationalising failed banks and other measures, [i]"was in direct contradiction to the existing protocols"[/i]. Government intervention was in response to the catastrophic failure of laissez-faire economics, the economic model which you claim has not failed - it is all "the fault of capitalist" according to you.

Finally : [i]"Ernie - fair enough to be cross if I was rude"[/i] Really mate, I've got better things to get cross about than what some herbert on a bike forum says 😀

so how do i subscribe to cat facts then?

Well Ernie - you are correct about not worrying about what some "Herbert" on a bike forum says. I'll back you up there. You can retire tonight with your "understanding" of free market capitalism that you say we never had but blame for the current problems??? I'll stick to the different debate in the FT and elsewhere where the argument starts from a different point.

Serious analysis points to a failure of western capitalism. I wonder why that is and why other fast growing areas of the worlds are combining capitalism into their economic system. At what point did the Chinese growth story take off? What is happening in Africa, LatAm and Asia. State planning, free markets....no like us its mixed economic systems combining governments and markets in allocating resources. Perhaps that is why economists point to the failure in Europe and the US as not one of a system but of the players within it - the excess leverage at the government, individual and now sovereign level tells me that this is because players made mistakes not the system.

Why is RBS a basket case when Standard Charetere isn't? Why lloyds and HSBC less so? People perhaps?

I wonder why it was the Labour party who was voted out power? Because people made errors in government. Ditto people personalise arguments against CMD and Osborne. From now on they can all hide behind the excuse that it was nothing to do with them, just those rampant unregulated markets! And all those with negative equity and unserviceable debt burdens can do the same.

Sleep well

Does anyone contributing to this thread actually bank with an ethical bank like co-op who don't pay ridiculous bonuses to execs?

No, thought not.

Does anyone contributing to this thread actually bank with an ethical bank like co-op who don't pay ridiculous bonuses to execs?

Just out of interest, do you know what the bonuses paid to Smile execs are? And do you think Smile would be better if they paid more?

You can retire tonight with your "understanding" of free market capitalism that you say we never had but blame for the current problems???

Stop pretending to be daft hurty, you know full well that "free-market capitalism" is what it is generally called, despite the fact that the state often interferes when there is a crises.

You also know full well that laissez-faire economics was the model in operation when the credit crunch and global recession kicked in.

And finally you also know full well that whatever label you choose to slap on it is completely irrelevant.

OK you choose to simply call it "capitalism" and leave out the free-market reference, fair enough, I'll go with that if you want. The fact remains that you have claimed "capitalism" hadn't failed, only the "capitalist" failed. This is of course complete nonsense, the system failed, failed catastrophically, and continues to fail. Even the leader of the Conservative Party David Cameron a week ago publicly spoke of the, quote : [i]"crises of capitalism"[/i].

As I said previously, you are obviously in denial because admitting that the system has failed undermines everything which you previously held to be true.

At what point did the Chinese growth story take off? What is happening in Africa, LatAm and Asia. State planning, free markets....no like us its mixed economic systems combining governments and markets in allocating resources.

Again your argument appears to rely on the hope that I am totally clueless, I don't believe for a moment that you are that ignorant of global economics. In 2011 the two fastest growing economies in the world were those of Argentina and China, both experienced growth of 9.2%. You know full well that the economic policies followed by the governments of Argentina and China couldn't be more different to those followed by the British government. There is no "state planning" of the British economy [i]at all[/i]. It is based on the policy of laissez-faire with government intervention only occurring as a panic measure when things go drastically wrong. There is no "plan", just occasionally a reaction.

Contrast that with Argentina and China where there is clear strategic planning and government intervention is the norm. And if you look further at Argentina you will see that the difference with Britain couldn't be starker. Faced with the largest sovereign debt default in history, Argentina finally abandoned decades of failed neoliberal economic policies and it went on a tax and spending spree backed by nationalisation and massive government intervention. Could that be more different to the economic policies followed by British governments for the last 30 years ?

Sure Argentina is far from having a fully socialist economy, but it does follow Keynesian economics and has a mixed economy with extensive government intervention through taxation and nationalisation, something which you falsely accuse Britain of having, although granted it is still in the process of re-nationalising - an issue which China doesn't have to worry about. Britain does not have a mixed economy, there is nothing of any significance which is government owned, certainly nothing in the productive sectors with the only exception being health, education, and the military/police. And the privateers will probably soon get their grubby hands in health.

I wonder why it was the Labour party who was voted out power?

Do you ? How about "because they had been in power for 13 years and the British electorate doesn't generally like a party that much, that they want it to stay in power for a lot longer" ? I think the more important question is why did the Conservatives fail to win the election ? After all for the party of government to lose an election and for the opposition to fail to win it, is pretty much unheard of in British politics. Answering that question would be much more constructive - don't you think ?

BTW : [url= http://www.independent.co.uk/news/uk/politics/boris-joins-attack-on-no-10s-failure-over-rbs-bosss-bonus-6295906.html ]Boris joins attack on No 10's 'failure' over RBS boss's bonus[/url]

I think its an excellent idea that soeone who is effectively a public sector worker gets a bonus. Whens it being rolled out to the rest of us?

Ernie - well at least I am only pretending to be daft. You are correct that I am not completely ignorant about global economics and indeed have bought and sold a company in Argentina recently and work extensivlely with China. To suggest that a system that allows the state to steal directly from its citizens and their pensions is in some way a model that we should aspire to is either niave or downright stupid. Ditto the Achilles heel in the Chinese system is that state influence in the banking system has led to a massive hidden problem of unproductive assets that will bite the Chinese hard at some stage in the next 5 years. But you like simple questions, why has China introduced elements of markets into its model and what happened to growth after it did?

All economic and political analysis points to that same reason why we are in a crisis - an unsustainable build up of leverage at the individual, bank and ultimately sovereign level. People in economic systems that range from largely laissez faire, to anti the Anglo-Saxon model, from RW to socialist governments ect made the same mistakes and gorged on debt. This is what makes monetarist solutions largely impotent and keynesian economics better but still slow to work.

So for the next 10-15 years governments will have to counter the mistakes made by all these players by financial repression where they will artificially intervene to hold interest rates below their natural level and GDP growth to solve these problems. Hence whatever system is in place the recovery will be slow and painful.

Perhaps the reason why we have a coalition is that people realise that no political party has the answer?

How can you possibly say that there is no state planning/allocation in the uk? In those situations where markets do not work who allocates resources in the uk - the Easter bunny?

On the news Boris had mixed views about Hester and frankly I agree with him. The government could have been much tougher.

Got to page 2 and read the comment from ernie-lynch questioning why it should always come down to profit when talking about banks....fell about laughing for a bit....then laughed some more....then managed to hold it together long enough to think about how astoundingly stupid ernie must be.

Ernie me old mucker, if banks dont make a profit then there is no point in their existence....they would simply be vaults for holding your money and they would have to charge you for this like any other holding/storage facility....people in general dont like being charged for having their salary kept for them and would be up in arms....you see as a rule we are a greedy bunch and have come to expect interest on our money, this interest doesnt materialise from thin air and is the result of the banks using our money to try to make a profit....no profit equals no interest....i could go on and state the blindingly obvious about how a bank that doesnt pursue a profit will not be able to loan money either....no mortgage services, no business loans etc...no personal loan when you want to buy a car etc etc....

I'm sure we could go back to a society like that but it would be one hell of a culture shock for most of the country....people having to live within their means?! :lol:....you break that to the electorate and tell them the banks will no longer be run for profit but for service...no more credit, no more loans and repossession of houses the banks (not the public who live in them) own too.

The current system isnt perfect but the alternative sounds decidedly crap too.

From what i've seen on the news the last few days this chap in charge of RBS has been paid in shares....good, there's his incentive for sticking around and making sure the bank can be sold back into the private sector at some point for a massive profit not only for himself but (listen up lefties) the tax payer too.
If the bank fails then our taxes that propped the bank up disappear into the ether....if the bank succeeds and can be made attractive to investors again then the government recoups it's/our money....hey this is easy, why dont some people get this stuff?!

From the figures being thrown around it appears he took charge of an organisation with 1 billion pounds worth of debt and has now made 2 billion in profit....not bad going, you'd think the leftists would be pleased that we (actually the government but why split hairs) stand a fighting chance of getting a windfall and eventually seeing some of this money back in the chancellors pot....why the glum faces lefties?...this is good news surely?

Socialism is the politics of envy and as ever the left seem to fixate on the headline figure of his bonus and conveniently ignore how this man's stewardship has reversed the fortunes of RBS....dont worry guys, i'm sure they'll be a Labour government along soon to spend spend spend....and then we'll have to do this all again in about 10 years time!

anagallis_arvensis - Member
I think its an excellent idea that soeone who is effectively a public sector worker gets a bonus. Whens it being rolled out to the rest of us?

Indeed. I've achieved far more than was asked of me in 2011. The government are only offering me poorer conditions for my pension.

konabunny - Member
Does anyone contributing to this thread actually bank with an ethical bank like co-op who don't pay ridiculous bonuses to execs?

I do - with Smile.
Just out of interest, do you know what the bonuses paid to Smile execs are? And do you think Smile would be better if they paid more?

Chief exec got £183k bonus in 2010 according to the article below. Customer service is always rated highly so I don't believe higher rewards would make a difference, overall they seem to have the right balance.

[i]If you have money in a bank whose pay structures strike you as iniquitous, put it somewhere else. As an RBS customer about to jump ship, my own choice is the Co-operative Bank, freshly merged with the Britannia Building Society. Their executives are hardly paupers (last year, the chief executive of Co-operative Financial Services was paid a salary of £590,000, with a bonus of £183,000), but their pay policy falls short of arrogant insanity – and as proof of their bona fides as both progressives and prudent operators, they make a lot of their ethical investment policy and proud avoidance of the financial instruments that got most other banks into such a mess.

I'm making the move because a friend did, which underscores the crucial point. If even 50,000 people took their custom away from the usual big-hitters, the banks would notice, and the idea would surely spread. So what's stopping us?[/i]

Pembo. Greed is what stops people from doing it....see my above post.

By and large the general public didnt have a problem with massive salaries and bonuses when interest was being paid on their accounts at 5%+ a few years ago....likewise when somebody could walk out of a bank with a mortgage for 6-8 times their salary you didnt hear a bad word about the banks.

Personal debt has been fuelling the private sector for years and government debt has been fuelling the public sector for years....we are seeing this being corrected, it not pleasant but any responsible government from any party would be doing the same thing....the alternative is bankruptcy on a national scale.

I once read that a person should be able to clear all their debts with what is in their savings account should things go tits up (mortgages excluded obviously)....wise words, i posted on another forum a few years ago about massive personal debt and was metaphorically laughed out of the room by the other posters....best advice i ever read though.

[img] [/img]

I bank with smile who efectively coop online, excellent they are too.

I'm glad i came on this thread if only to read a right wing poster state that socialism is the politics of envy, good work sir well done.

5% of the population have hoarded 40% of the nations wealth. This is nothing to do with fair reward, its about having the power to grab that much money

Indeed TJ - cronyism and exists is lots of different systems. Why? People! TJ the Matt cartoon in the Torygraph will appeal to you today.

So front page of today's FT. Three headlines:

[b]Cuban reforms to encourage private business and allow property trading have proved popular on the socialist island.[/b]

the German government wants Greece to cede sovereignty over tax and spending decisions to an (unelected) euro zone budget commissioner

Barclays investors warn they will not tolerate lavish bonuses for executives

Plus inside an interesting transparency on Hester's performance - a mixed scorecard!!!

(ps thanks Ernie - your advice to adopt the Argie model really kept me going on my long run this morning! One of STW's treasured quotes. )

Ernie - well at least I am only pretending to be daft.

I take it you are suggesting with that remark that I, in contrast, am actually daft. Well I certainly wouldn't claim to be clever, just very average - I'm just a simple manual worker without tertiary education. You on the other hand I am sure are quite possibly very intelligent, I believe you have taught economics - have you not ? Which begs the question why do you come out with dumbass comments like this :

[i]"To suggest that a system that allows the state to steal directly from its citizens and their pensions is in some way a model that we should aspire to is either niave or downright stupid."[/i]

It was [u]you[/u] who brought China and Latin America into the argument, not me, you divvy.

Nor did I claim that we should should aspire to the model offered by Argentina (I know that it's Argentina you're referring to in the comment about stealing pensions from its citizens) I simply pointed out just how different Argentina's economic policies are to Britain's, after you had falsely claimed that they were the same. Now you are telling me off for wanting them to be the same ! Seriously mate, do all teachers of economics get into such a muddle ? 😯

As far as whether we should or should not aspire to the model offered by Argentina well the Argentines certainly seem to like it, and they have had plenty of experience with the neoliberal alternative.

Three months ago Argentina's president was reelected by a majority vote, not many world leaders are so popular that they are the first choice of more than 50% of their citizens. Her nearest rival, a socialist (no neoliberals in the picture) got 17% of the vote, which I believe makes it the greatest gap between the winner and the runner-up in Argentine history.

So it is very clear that the president who 'steals directly from her citizens and their pensions' is very popular her voters, and everyone agrees that it is because of the results which she delivers, and the fact that the Argentine electorate is fully aware of what the alternatives are.

But I'm wasting my time telling you all that hurty, because you know all about Argentina. After all you bought and sold a company in Argentina recently.

I was going to comment about China but I'm bored now, can't be arsed, and I need to do stuff, maybe another time. Although I will quickly say that China's growth occurred after it ceased its policy of isolation, 40 years ago it wasn't even a member of the UN - google "Ping Pong Diplomacy". It [i]has[/i] introduced elements of markets into its model as it has grown in recent years, but that has occurred mostly in the later years rather than the earlier ones. The Chinese economy has done massively well since the Tiananmen Square massacre over 20 years ago and the subsequent clampdown and repression, but I don't conclude that the massacre and clampdown necessarily played a significant part in China's economic success or that we should look at following the example.

deviant - Member

Got to page 2 and read the comment from ernie-lynch questioning why it should always come down to profit when talking about banks....fell about laughing for a bit....then laughed some more....then managed to hold it together long enough to think about how astoundingly stupid ernie must be.

Ernie me old mucker, if banks dont make a profit then there is no point in their existence....

😀 And I laughed at your inability to read a simple post. Have another go mate, this is what I wrote :

[i]"So just "making a profit" is all that represents whether he's doing a good job ?

Some people believe that banks should provide a service, [u][b]not just[/b][/u] generate big fat profits for themselves."[/i]

Do you notice the use of the words "not just" ? This time I put them in bold and underlined them specially for you, now try to understand what that means. Any luck ?

Also if you read the post again you will notice that I provide proof directly underneath that comment showing the government whole-heartily agrees with me. Let me hold your hand and post it again for you :

[url= http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8528023/Royal-Bank-of-Scotland-misses-lending-target.html ]Royal Bank of Scotland misses lending target[/url]

And just in case you didn't want to click on the link I even provided a quote from that article, [u]and[/u] I wrote it in bold letters so you wouldn't miss it. Let me do it again for you :

[b]"Royal Bank of Scotland is expected to come under fire tomorrow as official figures will show it missed its lending target for the first three months of the year, a goal which fellow state-owned Lloyds Banking Group exceeded."[/b]

Do you understand the concept of banking not just being about generating big fat profits but also about providing a service ? David Cameron's government certainly does.

I have to say deviant, you're inability to read a simple comment is hilarious - are you another economics teacher ?

Still, it's good to have a good ol' belly laugh every now and again and we both appear to have had one 8)

Seriously mate, do all teachers of economics get themselves into such a muddle?

Fortunately not, as I guess their students listen to what they say and read what they write correctly.

fwiw of course I don't think you are daft, but I do think these specific points are. That's an important difference. Enjoy your Saturday - hope you get to have a nice ride! Trails seemed a bit greasy running earlier.

Ernie - remember Deng Xiaoping famously stated that "it doesn't matter if a cat is black or yellow (now quoted as white) as long as it catches the mouse." In our mixed UK economy, we had black and yellow cats but they all missed the mouse!

FWIW - since 2004, the highest level of profitability generated by the masters of the universe at RBS was an unimpressive 0.84% (ROA) in 2004. And for that they earn.....?

Customer service is always rated highly so I don't believe higher rewards would make a difference, overall they seem to have the right balance.

What is the difference between the number of customers, employee and capital under management that CFS has and RBS has?

Banks the financial experts lending money left right and centre, what a bunch of cocks, supposedly masters in their field bailed out out by Jo Public. They are leeches.

Instead of whining about his pay and harassing this man, why don't you vote in a far left socialist party instead of the conservatives. Then pay might be fairer, or move to cuba! I'm sure you will all love that!

The people get the government it deserves.

The people get the government it deserves.

Poor quality troll, 2/10.

To be honest I dont really care about how much he gets (A lot more people earn a lot more than me), but if someone gave me a million in shares i'd cash em in and buy a new bike....... or 2........ or 3 ........... or 4.......... you know where this is going! 😛

Ohh and maybe some forks, yes I could do with some new forks.

Ahh. So apparently the difference is between the obscene package of £960,000 and the perfectly reasonable package of £773,000.

Hint: it's in the first post of this thread.

Apparently he won't be accepting his bonus - I'm sure it will make all those who practice the politics of envy very happy - now who's next!

Sorry, haven't read the full topic, but this is my thoughts.

If he gets a bonus of approx £960k in shares. He is then sensitised to work harder and point the company in the right direction. With that, two things happen..

His bonus grows (Share price goes up) and the business pays more back to the taxpayer (in taxes etc).

Surely it's win-win. Win for the chap running a multi billion company, and win for the taxpayer?

I'm sure it will make all those who practice the politics of envy very happy

Well the guy who said this, will certainly be every happy :

[i]"People will not understand how somebody can get a whacking great bonus when they are basically running a state-owned concern"[/i]

Although I had no idea that leading Tory, ex-Etonian, and former Bullingdon Club member, Boris Johnson, 'practiced the politics of envy' 😯

He called the decision to award the bonus "absolutely bewildering".

[url= http://www.independent.co.uk/news/uk/politics/boris-joins-attack-on-no-10s-failure-over-rbs-bosss-bonus-6295906.html ]Boris joins attack on No 10's 'failure' over RBS boss's bonus[/url]

You and I can sleep easy E_L, Hester is turning down his bonus. Inevitable after Hampton did the same.

Even he agrees he doesn't deserve it :wink:!!

I'm not going to sleep easy hurty.......I've just discovered that my elected mayor practices the politics of envy ! 😐

fatmax - Member

If you pay peanuts, you get monkeys.

Funny how this maxim ever only seems to apply in sectors where the pay is already unconscionably high.

Personally, I reckon he shouldve taken his bonus. He's heading a huge bank at the moment, in a bank, a million pounds is petty cash so for the position he's in and the pressure he's under, the bonus was fitting. Just a load of people thinking the country will sort itself out who have no idea how its gonna happen really shouldn't complain. He's being productive and getting somewhere, if you really want, let'sjust tell him not to bother because obviously, its not worth nine hundred and odd thousand to start rebuilding what's been messed up.

So now the exchequer has missed out on the tax on his bonus. Presumably 50% + 10% NI, or about £600k. Enough for quite a few teachers or some hospital consultants.

I guess nothing is simple.

Presumably 50% + 10% NI

Presumable the exchequer can ask for 84%, since it's 84% owned by the tax payer. Which sounds like a better deal.

You need to sharpen up on your maths konabunny if you want to play the numbers game

earnie - you are being very selective in your quotes, what about all the labour, conservative and lib dem quotes.

In 5 years, when RBS no longer exists and the tax payer is sitting on a loss of 45bn, you will no doubt be calling for the heads of those who failed to appoint the right person to protect the tax payers investment.

Bankers have been getting paid too much. But like it or not Hester has been doing a good job at RBS, shrinking the place, getting it focused on it's core business again and hopefully ready for sale so we can get our money out of it.

He's not the bad guy and if he quits what will that achieve? If Labour are so outraged by his £2mm pay for 2011 why did it pay him £7.2mm in 2008? Epic levels of hypocracy, they really do not have a leg to stand on.