[Closed] RBS, OWNED BY US THE TAXPAYER,to give massive bonuses next month

Did you expect anything different?

I'm wondering what i'll spend my dividends on. We do get dividends dont we?

Cameron cant do anything to stop them. Whats he going to do, draft a special law just for rich bankers. They're untouchable. They know it, & he knows it. Who's he going to target next...footballers, pop-stars. Empty words, nothing more.

Don't worry I'm sure Nick and Vince wont let that happen it was in their manifesto that they had a five point plan to stop them. 🙄

Interesting one. We own most of the company so it is in our best interests that the company does well. To do well it has to attract and maintain suitable talent. The folk getting the bonuses have helped the company get out of difficulty which means they can pay back the taxpayers quickly. But it feels wrong to reward them.

If we took project's approach and massively slashed wages and bonuses then no one with any talent would want to work there. The company would collapse and we'd all lose the money we invested, but we'd feel happier that no "greedy bankers" got bonuses.

I often say tough things and I'm the biggest pansy going in reality. He'll give them a real vicious tongue lashing when the payouts are made and sweet FA else. Don't forget which end of the financial social spectrum we are talking about. After the lashing he'll clarify though that these remuneration packages are needed to keep key personnel (the ones who failed) in key positions. Or maybe he'll let the Gimp Clegg do it to show he's sharing the power and the blame.

+1 to what GrahamS said.

GrahamS for prime minister.

speaker2animals - Member

"After the lashing he'll clarify though that these remuneration packages are needed to keep key personnel (the ones who failed) in key positions"

How many of the people in key positions do you think were there before the banking crisis?

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 am sure their are other individuals who could do a better job. So if failures don't want to accept that they have failed and are to be paid accordingly, maybe they should look at getting a new job. I am sure that their are plenty of people around, we do have nearly 3million unemployed, who would like their job.

So as al;ready stated above we own the company so we should get a bonus and a dividend , not the management who just play with an abacus all day.

It does make me laugh that these bankers need multimillion poouynd bonuses to motivate them but lower paid workers apparantly do not need incentives to work hard

Its gross hypocicy and I am certain that reigning in the bonuses dramatically would not stop them. No way woud they all go to germany or the USA.

One bank made a few billion profit in its investment arm the employees took more than half of it it bonuses.

For these guys the bonuses make no difference - earn a million or earn 5 million - it does not alter the lifestyle or the motivation. Its purely a scoring system to see who has one

its rank greed and hypocrisy.

TJ theyve obviously got a very good unnion to fight their place.

The best people will work for the bank that rewards the best.

Interesting one. We own most of the company so it is in our best interests that the company does well. To do well it has to attract and maintain suitable talent. The folk getting the bonuses have helped the company get out of difficulty which means they can pay back the taxpayers quickly. But it feels wrong to reward them.

If we took project's approach and massively slashed wages and bonuses then no one with any talent would want to work there. The company would collapse and we'd all lose the money we invested, but we'd feel happier that no "greedy bankers" got bonuses.[

Apart from it takes very little talent to make money when you are riding the largest wave of cheap money in history, financed by central banks lending money at 0.5%.

US THE TAXPYER, PWNED BY RBS

is how this title should read

According to call-me-Dave on Andrew Marr this morning its owned by "the government" i.e. him and his fat-cat trustafarian mates, so really he couldn't give a monkeys, but he'll pretend he does

Oh look Graham S has done it for Mr Cameron, nice one.

How come the massively talented staff allowed it to go T up then in the first place. They were worth all the money they got paid weren't they? The remuneration package for the head of Tesco in the last annual accounts published was £90m. How can anyone be worth a package of that value? Tesco is obviously a massively successful company but you can't tell me that that man did anything of that value. And don't tell me that he's in a risky position if business tailed off. How many people at that level get given the boot without a golden handshake?

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. So if business had dropped off over the five years there would be a reduction in the bonus. There would be no payment of any bonus accrued if the position was vacated before the first 5 years was completed and this would role over, so if you left year six you would only get the bonus piad for year one, year 2 on would be forfeit. This would then role on year by year. Maybe then the positions would attract skilled but also committed people. My feeling is that too many of these high value chief executive roles are filled by people who know that they will probably move on ASAP if things start to look dodgy and they probably have a high financial value escape clause written in.

lower paid workers apparantly do not need incentives to work hard

Well, apart from the threat of losing their jobs, their homes, their self-respect, etc....

GrahamS - nice troll 😉

I'm not a fan of bankers.... 😈

Don't get me started..............

The 'talent' angle is the biggest load of BS. Absolute rubbish.

as a followup to speaker2animals, I have known some great reps over the years, they could sell anything.

Problem was that they didn't actually know what they were doing, so they would get some good sales figures, but then just before things go horribly wrong they move on. so many CEOs and the like work the same game, i have known people shunted sideways because they couldn't be fired but were a liability if given any real responsibility.

The only consolation is that they're going to be paying 60% tax on it (plus NI and weird pension rules I didn't bother trying to understand).

But I'd still quite like my employer to try to incentivise me a bit more with a couple of million or so. Just to see if it works or not, obviously.

if they are like the contractors i know working at barclays they will not be paying 60% tax as they will have set up a company based in croatia and will be payed in Kuna and avoid tax that way

I'm sure for all the talk the Government is happy that the country (through tax/NI) will get the 50%.

to quantify my pevious statement...
RBS managed the banking of the business I worked for - they stopped the cash flow, I lost my job....
RBS had my account - when I lost my job they cancelled my overdraft and stopped my credit card....
RBS had my mortgage - when I lost my job and my credit was shot because they had decided to this, I lost my house....
RBS employed my wife - she had to leave.....

And bankers get a bonus 😈 😈

If I could get a job in 'banking' I would do it for the country...
Would you???

Put it this way:

If your boss said to you tomorrow, "we've decided to halve your pay because of some of the bad decisions that myself and the board have made." And there were plenty of competitors that would give you a job straight away then would you stay?

The question isn't "Are bank bonuses justified?", the question is, should the state-owned bank, who has a lot of taxpayers money invested in it, offer wages that are hugely below the current job market?

One bank can't stand alone and expect to survive. It would fail and the other banks would look at it as evidence that they need to pay big bonuses. The bank wage/bonus market needs to be moved as a whole, and that is far harder!

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.

Much 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!!

Where do all these profits come from that allow banks to pay such huge bonuses?

What do the likes of RBS do that is so wildly profitable?

Graham S

-Do banks have to give bonuses? The govt could force them all to abandon bonuses, but it wont in a million years. Should doctors get a bonus for saving lives? Should Engineers get big bonuses? Army?... and so on...

-These people are speculating on companies, they can have a nasty effect on these companies with their "deals" and short selling

-A lot of it is [u]psychology and BS[/u].

-Imagine if Mr Jerome Kerveil's dealings had worked.

Kerviel had told investigators that such practices are widespread and that getting a profit makes the hierarchy turn a blind eye

-Bankers let them leave, where they going to go? And someone is always ready to step up/replace. Sure the job is pressured, but do you need to be a rocket scientist to do it?

Right time to chillax. We're all doomed anyway 🙂

What do the likes of RBS do that is so wildly profitable?

Gamble, what do you think drives the commodity markets.

Conqueror - Member
Bankers let them leave, where they going to go?

To other banks who still offer those rewards. if you don't have international consensus on this, you put at risk a massive income earner for the UK. Plus, the "failing" banks never recover and the UK govt/taxpayer ends up out of pocket. Like it or not, it is in the interest of us all that these banks start to make lots of money. Then the market will want the shares and the government can sell them off at a massive profit.

To satisfy everyone* what ought to happen is that RBS should be obliged to operate [i]un-profitably[/i]. Lend at discounted rates, borrow from savers at inflated rates. Cut transaction fees on corporate finance deals. Provide large volume of small scale higher risk business loans (but not private loans), not small numbers of high volume, high risk corporate/real estate loans that take on the bulk of the deal risk to the benefit of the borrower's equity.

That way a financial service provider is undercutting the market, bringing market profits down to more acceptable level, and hence bonus capacity. It would have the effect of forcing other banks to cut profitability to maintain market share.

Bank clients benefit from the essential liquidity service of the industry. Banks can still, if they want, play their naked games (derivatives with no direct exposure) and the reduced capital they have left after that.

* unfortunately Im pretty certain that would count as state intervention in a private market, effectively subsidised service. And so be illegal under EU law.

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.

If your boss said to you tomorrow, "we've decided to halve your pay because of some of the bad decisions that myself and the board have made."

Out of interest, how can all investment banks (Lehman aside, though I seem to remember that their UK arm was supposedly profitable) make a profit - or am I missing 50% of the sector that makes correspondingly massive losses ?

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? Are they that irreplaceable?

I so doubt they would go to Germany or the US. And would there be jobs for them in Germany or the US

TandemJeremy they can all speak German and the US would bowl over and hand them green cards on arrival.

Out of interest, how can all investment banks (Lehman aside, though I seem to remember that their UK arm was supposedly profitable) make a profit - or am I missing 50% of the sector that makes correspondingly massive loss

Why 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.

spoomplim - Member
To satisfy everyone* what ought to happen is that RBS should be obliged to operate un-profitably.

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.

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?

Are they that irreplaceable?

Well - that's one software bug not fixed in the recent changes....

Why 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.

I 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.

Nothing 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....

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?

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.

GrahamS - 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.

Much 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!!

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?... hmmm

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?

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?

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.

TandemJeremy - 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?

allyharp thats the nail on the head right there

[u]real wealth generation[/u]

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

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 [i]brightest and the best[/i], I swear I will fill their face in.

"Worth" is a grossly abused term.

are they going to expand so they have more staff?

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.

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.

noteeth - Member

"Worth" is a grossly abused term.

QFT

noteeth - 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?

[i]But then the £61Bn in tax revenues they generated does go some way towards paying for all those hospitals, doctor etc?[/i]

I'm getting bored of this line, tbh. It hardly excuses the rank greed on display.

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

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 profits

I 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

But 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.

mrmo - 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.

-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 [b]a question for our union rep TJ:[/b]

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?

What 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?

'RBS, owned by us the Taxpayers'; what, in the same way that 'the Goverment is answerable to the people'? 😀

[i]I guess this sums up the problem with public opinion and kneejerk reactions quite nicely[/i]

I suspect the public are understandably miffed that people - different people, granted - are still harping on about the [i]need[/i] to reward "talent" in this manner.

slow talent drain

😆

Some 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.

noteeth - 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 ****ers than most people! There's a reason I'm ex)

dmjb4

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.

TJ: 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.

dmjb4

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
🙄

speaker2animals - 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.

TJ: 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.

[i]It's obvious that a great many of the people who're outraged have very little grasp of the situation[/i]

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.

Can anyone lend me a tenner?

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?

Yes but how many billions has she made? Because that's the only measure of talent/success/worth that actually matters, apparently.

now, 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.

genuinely 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.

hungry monkey - I can't find it now - it was reported in a mainstream newspaper. I cannot rememberer which bank. Thus its rubbish as evidence