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

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

> 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.