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

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

What world do you lot live in? Really?

Yes it would be lovely if wages were based on a job's moral worth and its contribution to the good of society. Teachers, nurses and social workers would be millionaires, and everyone would dream of being able to work in a charity shop.

Sadly we are stuck with our brutal capitalist reality, and in that reality people that make enormous amounts of money for their companies receive big financial rewards, even if they aren't very nice people. Meanwhile people working very hard on virtuous but non-monetary goals like health, social change, education, charity, welfare etc get considerably less, even if they are jolly nice.

You can stamp your feet like a petulant teenager and complain "It's not fair". You'd be right. It's not.

But if you want to change it then you're not talking about a change of banking remuneration, you're talking about a complete overhaul of how the entire world recognises value in society and pays for good and services. 🙄

Alternatively just tell everyone that although they remain poor and virtuous, while others are devious and rich, it'll all be alright because when they die they'll be rewarded by an invisible superhero that lives in the sky. I believe that has worked in the past.

{80 post bug}

g-man while that would be nice (readjusting the capitalist system, not the god thing)
practically it would just be nice to see a substantial tax on bonuses and other benefits and a genuine crackdwn on tax evasion/avoidance
the millions if not billions raised could then be used to offset the damage done by the finacial rollercoaster the next time we are careering into another crash and all those teachers, nurses and indeed factory workers wont be faced with pensions and savings being lost, jobs dissapearing, vat hike, fuel duty through the roof etc etc

practically it would just be nice to see a substantial tax on bonuses and other benefits

There already is isn't there?
No personal allowance and 50% income tax on 150k+, plus another 12-13.8% from NI.

and a genuine crackdwn on tax evasion/avoidance

Agreed.

i was also thinking of the bank levy that is raising a (paltry?) 2.5bn a year, which compares very poorly to the 70bn wiped off pension funds in the recent crash

noteeth - Member

"Riiiiiight.

I think people grasp the situation perfectly."

So, the people who think we gave money to the banks grasp the situation perfectly, even though often in the same sentence they'll say "But we own them!"? The people who think we're rewarding the people who failed (like MrMo) grasp the situation perfectly, even though so many of them have actually gone? The people who still want a clearout of management even though none of the top managers were there at the time of the crisis, they grasp the situation perfectly? The people who want to punish everyone who works for a bank grasp the situation perfectly?

Righto.

Some people do have a very good handle on things, but of the opinions you see on here and in general, an awful lot of people are just angry at the financial crisis and want to blame someone, anyone. So even years after Fred Goodwin gets the push people still want to fire the head of RBOS because it's [i]all his fault.[/i] People go mad in bank branches at "greedy bankers" who get paid about the same as shop workers. People are delighted to see mass redundancies at banks despite the fact that people getting canned generally had no involvement at all in the crisis.

[i]Teachers, nurses and social workers would be millionaires[/i]

That isn't the point. Any number of people manage to do complex and demanding jobs without being paid ridiculous salaries.

Edit: Northwind, given the [i]utter screw-up[/i] that came close to engulfing the financial system, and given the way that the likes of oh-so-self-regarding Barclays benefited (albeit indirectly) from the support extended by the taxpayer, I'd expect the banking industry to be very, [i]very[/i] circumspect about salaries and bonuses.

Your point about bank workers is perfectly fair - it's similar to the way that platform staff get needlessly blamed for the dysfunction on our railways.

There should be no bonus paid by RBS to the bankersters that got us into this mess. (they share responsibility with the politicians of the time who took the tax and eased the regs...)

Foot soldiers, front line staff in the branches, they can have their £1000 bonus.

But not the big guns who made it all go pop ! and then held a gun to the head of Alistair Darling, saying,
"bail us out with tax payers money, or its all over, for everyone".

If there is a surplus then is should go to repaying the bail out / buying back the shares we hold.

Agree with TJ, they can't all find jobs in banking, elsewhere.
Call their bluff.

Looking back, it was totally wreckless of the then Gov to go with just one sector, the financial sector.
Focusing only on the tax take and jobs the financial sector created, letting it become the monster it now is.

Who should have been protecting us from the banksters ?, the Govs of the last 40 years. They failed us and now we have the bill.

As for RBS, while they are publically owned, they should be working to repay their debt just as they would tell me to do with a personal loan.
Their bonuses come after.

This does not rule out a remuneration structure which had higher salaries and no bonuses at all.
This way, staff who are generating the profits for debt repayment, can be retained, and they can pay full tax on a full salary.

What noteeth says. Why oh why should ****ers get a bonus? What purpose do they serve to the society? To be honest the system of bonus should be ban full stop. You want to work for a bank in the EU, well forget about bonus. You'll get a very decent salary (although in my opinion still not earn) like any other workers and that's it. Why would the CEO of RBS/TESCO get a bonus? Why wouldn't this bonus get slit evenly between the staff at the very low level? Specially since CEO aren't sweating bucket to make money are they? They just wake up on the morning and do F all. Alas, nothing will ever change. People who are CEO of banks spend their times inviting head of states for lunch, so you could bet that dave isn't going to shaft one of his mate to please the opinion (I am in no way saying that dave or le petit nicola are reciving a generous contribution from said ****ers, indeed not).

That isn't the point. Any number of people manage to do complex and demanding jobs without being paid ridiculous salaries.

True enough, but they are not making billions of pounds for their companies.
What is so hard to grasp? It is NOT a meritocracy. In a capitalist system, if the board of a company see that you have made them and the shareholders billions of pounds, then they are generally pretty keen to keep you and will happily give you back a fraction of what you have earned them to do so.

Yes, other people do more deserving, more demanding, more complex jobs and get far less reward - mainly because they aren't making their companies bucketloads of money (or if they are then they are in a position that is easily replaced).

No, it's not fair.

See also footballers, rock stars, celebrities, etc etc.

[i]What is so hard to grasp?[/i]

Nothing. I just call bull on it. 😀

Lots of truth in what GrahamS says.

I think the whole focus on bonuses is a bit of a distraction, all said and done, to the behavior of the banks in general. A lot of what RBS et al are doing is having an extremely lasting and damaging effect on the long term future of the British economy. All for their own self-interest

RBS seems to have escaped much publicity for this, but was responsible for lending Kraft the money for its leveraged buyout of Cadburies.

So.... in effect... WE (the British Taxpayer) effectively lent an American company the money to buy one of our few internationally successful brands. The new owners then move production overseas making British workers redundant. We then have to pick up the tab for increased welfare payments

To Compound this, they then relocate the companies headquarters to Switzerland to avoid paying tax, depriving the exchequer of millions in tax revenues

But, hey ho.... the bankers get their bonuses and some lawyers and consultants in the city made an absolute killing.

So we're all better off.... aren't we?

RBS seems to have escaped much publicity for this, but was responsible for lending Kraft the money for its leveraged buyout of Cadburies.

Would it have been better if they had let a foreign bank provide Kraft the loan, thus ensuring that even more money went abroad?

erm........?

Is there any way that we as the taxpayer don't get absolutely bent over here?

You've got to hand it to them, they really are clever bastards. And completely without morals

Thanks Captain Crash for proving my point again so eloquently!

Captain_Crash - Member

"There should be no bonus paid by RBS to the bankersters that got us into this mess. Foot soldiers, front line staff in the branches, they can have their £1000 bonus. But not the big guns who made it all go pop !"

So Noteeth, does he grasp the situation perfectly?

Im not sure if anyone has mentioned this yet, BUT govt will never take action on the bank bonuses beacuse they (govt) extract large sums of money thro taxation on these gross salaries.

However IMO there is no justification for them unless teh individual performa superlatively well, the culture of just getting a bonus for doing (or even in some cases failing at) your job is appalling. Hester should have no bonus because he has not really achieved anything in past year, RBS shares remain well below govt purchase price, RBS last quarter made a loss. (in 7 years working in industry I once got an annual bonus as the whole company had exceeded expectations and profits!) On basis of being rewarded on short term results (which is the mantra of the bankers, and a reason , in addition to majority`s own personal greed and credit card fervour) he should get a basic salary full stop.

As for RBS majority share holder, aka HMGpvt, vetoeing bonus , forget it. they would rather hit smaller soft targets for a few pennies

he should get a basic salary full stop.

Bonuses are taxed the same as basic salary, no?
So why is it worse to offer a lower salary plus an annual performance-driven bonus, than offer a fixed high salary regardless of how well or badly you do?

Bare in mind this is RBS. I've no problem with bonuses being used within companies that haven't burdened me and everyone else with the cost of bailing them out.

Had it been any other industry, then they would have surely gone to the wall.

However, on a wider note, bonuses have been identified as a root contributing cause of the fever pitch rush for gold and glory that brought the banks to operate so wrecklessly, ultimately bringing about the Great recession that we are struggling through right now.

And so, should we not question the place of bonuses in this particular industry ?, perhaps one reg that should / could be agreed by the west is that the banking sector can not operate a bonus pay structure ?.
But the salaries for the "[i]worthy[/i]" are commensurate with their performance.

[i]So Noteeth, does he grasp the situation perfectly?[/i]

Yes, insomuch that those employed by bailed-out banks should simply be glad of having a job! And yes, I'd be a lot happier if Fred etc had not escaped with their ill-gotten gains.

Of course, that leaves the thorny issue of attracting/retaining the kind of "talent" you'd need to generate profits (and a return on Gov equity)... but that is just one more unfortunate result of treating a fat grasping cuckoo of an industry as if it were a Golden Goose. Well, more fool us.

I fail to see why retail/investment banking should not simply be separated, tbh. Let 'em bet on their own slate - and stay there.

northwind you name one person who left, who i might say has done very nicely out of the situation. But where is the fallout amongst the supervisory boards, the non execs, the execs, etc. One man does not make a failure, he is just a scape goat. I don't see action on bank behaviour, words yes, but no action.

Bonus payments can drive reckless behaviour, these are well paid individuals, receiving huge bonuses for doing their job. If you pay someone on results, depending on the person you get people taking shortcuts, to look good. As i mentioned sales reps are a case in point, you pay them on results and if they get out before it goes wrong they look good.

Anyway, saying pay shares how will that help, wouldn't that be taxed as capital gains rather than income?

[i]Bonuses are taxed the same as basic salary, no?[/i]
No.

Theres the tapered income tax structure for a start, and NI is now a raw percentage with no ceiling (thanks Gordon 🙁 )
So on a higher salary, they'd pay more tax.

There are loop holes, especially if the bonus is paid in shares or some other indirect format.

But still, we can't reward failure and this is the general problem with bonuses.

What is paid as bonus first time round is received and viewed as, errr, a bonus.

But thereafter, its expected and counted upon and so at that point, any motivational advantage gained by issuing a bonus to an employee is severely reduced.

So the board tie the bonus into a division of the banks profits and that keeps the investment banksters hungry but also drives them to be wreckless to the point of taking massive risk.

> Bonuses are taxed the same as basic salary, no?
No.

"Bonuses
If your employer pays you a bonus, it's just part of your pay for the job - and you'll pay tax and National Insurance contributions on it through PAYE. Your employer includes it on your payslip with the rest of your pay."
-- http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10026509

Shares are different but are still subject to plenty of tax.

But still, we can't reward failure and this is the general problem with bonuses.

The folk earning bonuses in 2011 are (mainly) people that have successfully met their performance targets for that year. Paying them is rewarding success, not failure.

[i]The folk earning bonuses in 2011 are (mainly) people that have successfully met their performance targets for that year. Paying them is rewarding success, not failure.
[/i]
EDIT: They'll have achieved their targets when we get our money back, so that we can pay off some of our national debt 😉

But I suppose it depends on how you measure success. Digging yourself out of a hole doesn't make you a successful digger, just adequate enough to save your skin.

And so your comments ref bonuses prove my point. For what would those people do if you didn't pay their [i]bonus[/i] ?

According to some, they'd jump-ship. So, is it a bonus ?, no, its expected as a vital part of their salary.
No ifs, no buts, [i] I WANT MY BONUS[/i]...

So anyway, lets turn the tables here. After all, [i]we're all in it together[/i].
Where was my bail out in when it all hit the fan ?.
I don't recall getting a bail out.
And I certainly didn't / don't get a bonus for doing my job.

Even so, just go with the bonus thing being taxed the same.

Why not just pay a higher salary then ?.

I'm not out for an argument, people are going to have different opinioins. mine is that there should be no bonuses for the investment banksters at RBS, at least [b]until[/b], they pay us back, first !.
🙂

mine is that there should be no bonuses for the investment banksters at RBS, at least until, they pay us back, first !.

And mine is that if you hugely reduce the salaries paid to investment bankers at the RBS, without forcing all the other banks to reduce their salaries, then the only investment bankers left at the RBS will be the ones that can't get a job anywhere else. Are they the best people to make a success of the bank and earn our money back?

mrmo - Member

"northwind you name one person who left, who i might say has done very nicely out of the situation. But where is the fallout amongst the supervisory boards, the non execs, the execs, etc. One man does not make a failure, he is just a scape goat. I don't see action on bank behaviour, words yes, but no action."

Er, no, read my post again- the chairman and all of the executive directors from RBOS are gone. But if you want to know about non-execs, there are 9 and all but 2 are post-crash. And looking further down the board there are 8 division execs, and 7 are post-crash (the one who isn't is with ANZ so outwith the RBOS failures). You don't see action because you're not looking.

Graham_S.

Yeap, I understand your point, its a tough one.

Tougher still is trying to get trans-atlantic, etc, concensus on how to control the banks in future as their threat is always that they'll move away if that get hit with the tax stick, too hard.

But, one could suggest that until the debt it repaid, they haven't achieved their targets and so no bonuses.

I offer a commensurate salary - without bonus, until the bail out is paid back, as part of a short term solution.

We want our money back, they want to be out of our hands. Round about, we all want the same result. But imo, now is not a time for [i]bonuses[/i]

Captain_Crash - Member

"But, one could suggest that until the debt it repaid, they haven't achieved their targets and so no bonuses."

One could argue the moon is made of green cheese.

Why aren't all social workers sacked because they let Baby P die.

Why aren't all doctors and pharmacists sacked because one of them gave a pensioner the wrong drugs resulting in the man dying?

Losing a bit of money's one thing, but messing up to the extent you kill people is another. And just like bankers, the social workers, doctors etc should be held collectively accountable.

Some people in this forum need to get over their jealousy: some people earn more than you, get over it. Perhaps they worked harder in school, made different career decisions or maybe it was just down to luck. You'll never know.

The financial crisis wasn't just caused by banks. They tried to help someone by offering them a loan. The problems were caused when the people they tried to help let them down.

No bank ever forced anyone to take a loan. In 2005-8 people were beating the doors down demanding them, insisting on mortgages 10x their salary.

Not that banks were innocent here, but the problem was a mix of slack practice and a greedy population in general.

Not that banks were innocent here, but the problem was a mix of slack practice and a greedy population in general.

Agreed. And this goes straight back to someone's earlier point that the problem is with our whole society and culture.

The "I want, and I want now" attitude has lead to people living beyond their means and its role in getting us into the shit we're in cannot be ignored.

[i]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. [/i]

TJ

What you need to understand is that its nothing to with Bankers, as there will be certain employees at (for example) train driving 'companies' who get paid over and above what people consider is too much.

I've only really worked for one company where I was above the 'line', and every company has a line in its organisation. Below it you are paid just below what the company believes it needs to to cover the service/work. Above the 'line' 😀 its different.

And you get paid more to pay your staff less...

Captain_Crash - Member
Bare in mind this is RBS. I've no problem with bonuses being used within companies that haven't burdened me and everyone else with the cost of bailing them out.

still running then ?
congrats one & all on not (yet) getting this closed

The financial crisis wasn't just caused by banks. They tried to help someone by offering them a loan

In 2005-8 people were beating the doors down demanding them, insisting on mortgages 10x their salary.

I remember asking a while back, when this 1st hit the news, whether some banks in the US had knowingly sold on this bucket of shit to other, stupider bankers. Someone "in the know" said it was too complex for that to happen but, IIRC, hasn't a US bank been prosecuted for exactly that ?

Talent my arse - something may float to the top but I wouldn't always call it cream. Call me as yet unconvinced.

The financial crisis wasn't just caused by banks. They tried to help someone by offering them a loan. The problems were caused when the people they tried to help let them down.

Regardless of who is to blame (for those that want to blame - I sometimes like a good bit of blame 😆 ) we've all been living beyond our means in the UK for some time. Think about how many possessions the average person must have and all the cr@p they buy - a frightening thought. Can we maintain or justify such a situation? Probably not.

If we want that high standard of living though (the exact definition of which may vary depending on what you value) without having the British Empire Mk2 to make up for any short comings or problems (like being able to nick resources) we need to do something more than just lobbing money around on computers and shaft companies/people with short selling.

We need companies who are the best in their field or near enough, we need people to buy our stuff. At the end of the day isn't that what its about? Because if it goes wrong (the economy) at the most basic level like in Zimbabwe it wont matter what bankers you've got.

[i]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.[/i]

[i]TJ[/i]

TJ's argument is fundamentally and fatally flawed in any case. The train drivers are saying "you must stuff our face with gold". The bankers are saying "if you don't want to stuff our face with gold, we know someone else who does."

The someone else in the banker example might be a fool, but that someone else is doing it of his own free will, rather than being forced to under duress.

This is quite a well-written article on the subject from a fairly neutral newspaper
http://www.heraldscotland.com/comment/guest-commentary/bonuses-shouldn-t-be-priority-when-dealing-with-the-banks-1.1078819

All Mr Osborne has to do is sell the Government’s holdings in the banks and declare that no public money will be available to bail out any financial institution in the future