TandemJeremy – Member

Its a disgrace that he gets 2 million a year – there simply is no possible justification for that at all.

Are you sure TJ, haven’t these people got at least 3 brains each ?

As for FarmerJohn’s nail-hitting talents, perhaps he should share his wisdom with the leader of the Conservative Party who happens to agree with me and TJ that the City of London bonus culture is wholly unacceptable.

UK’s Cameron says bank bonuses “out of control”

Then afterwards perhaps he could make the argument that a handful of very special people are saving Britain to the leaders of all the other political parties, and the rest of the British people. ‘Cause there’s surprisingly few people who appear to agree with him – whatever their political persuasion.

Stu_N – Member
=1 for FarmerJohn. There’s a market for people who want to/ are able to run huge multinationals, and if you don’t pay a market rate you won’t get someone suitable to do the job.

Hester won’t be at RBS for the money

am I the only one to see the illogical nature of this? We have to pay the market rate to attract these people but he is not in it for the money?

😕 🙄

I’m sure you could have got an RBS boss for less. Andy Hornby was available…

Hester joined RBS to sort out the mess left by Fred Goodwin. He’s been doing a good job. As CEO of a major organisation £2.4m is way below the market rate. I honestly don’t know why he bothers given all the negative publicity associated with the job.

Poor fella. 🙁

Could you manage to halve the share price of this huge taxpayer-owned bank in the space of 12 months?

pretty sure i could do it and not even drop my STW post count

is changing a banker’s reward package via contractual bonus really much different from changing a public sector worker’s reward package via pension rights?

Think we are all struggling to see what good he has done and the scale of the wages cannot be ignored. However breach of contract is breach of contract ..I am sure his union rep will see him right on this.

2/3 of NHS trust budgets are for salaries – how is that justifiable

they dont make anything and looking after ill people is labour intensive…would you like a bigger hospital [other costs] and fewer staff? perhaps fewer operating on you but comfier beds, if you live?

I honestly don’t know why he bothers given all the negative publicity associated with the job.

that is the thing with ALL public servants they do it to help us all out for limited personal gain

executive pay in the UK has risen far faster than inflation and far outstrips that of other countries. Even the US does not have this in the same way let alone japan or germany

The market rate is set by the recipients of the wages. Its not a market – its a cartel

He will probably leave after March – the job will be given to someone who earns less than the pm, the share price will plummet and the tax payer will end up with nothing – but hey, at least no bonuses were paid 🙄

Junkyard – I believe he is a capable individual who has done a lot towards sorting things out – and is worth a reasonable reward. however 2 million is far over what is a reasonable reward.

As CEO of a major organisation £2.4m is way below the market rate

I think it’s all about hierarchies.

Businesses are organised into top-down hierarchies where the chaps at the top can half-destroy the business with one bad decision. If you’re authorising decisions at the top of a big, powerful, potentially rich business then you can expect a whopping salary compared with the chaps at the bottom.

If the business structures were flatter and more distributed/ cooperative then I suspect the pay-scales/ratios would be flatter too. Such businesses might also be more dynamic, diverse and resilient to economic circumstances.

IMO

Tj – how do you determine reasonable?

Junkyard – Member

Think we are all struggling to see what good he has done

I don’t think many people have an even slightly informed opinion on how good a job he’s doing tbh. But do you have reason to think he’s doing a bad job?

Interesting one this! The Government correctly stated recently that it is the responsibility of shareholders to exercise control over executive pay. Here was a test case, where frankly they failed. At the very least they are playing a very poor hand of poker (apologies if that is a crude way to talk about HR issues) and at worse they are undermining their own position on the matter and failing to equate returns with reward.

Banking is at its heart a simple (and frankly low return ex-leverage) business. It is a business that the Vickers report intends will become even simpler. RBS, like Lloyds, are being steered (actually reasonably well by Hester) in this direction. But here is the nub, there is an argument among the senior executives of many banks that this is a far more complex issue than it is – but this is a fallacy as where the historic returns that were inflated by excess leverage. It is time that the bubble of banking executive pay was burst. The government has already lost the moral argument if Diamond now pays himself another mega bonus when Barclays delivers a return below its cost of capital again and continues to allocate capital ineffectively. And that is a wasted opportunity – perhaps the politest thing that can be said.

The only mitigating circumstances that I can see are: this is deferred payment in the form of shares, they should include some kind of claw back mechanism assigned and that Hester is receiving less money despite arguably delivering some tangible results. But that doesn’t compensate enough. I would rather see any awards for “success” being awarded at the moment the success is delivered rather than on the promise. That is the real basis of risk and return.

I would also add that it is unfair to make this a personal attack on Hester. He is a reasonable and able guy bought into to solve the mess created by Fred and Co along with the government, the FSA, BoE and Uncle Tom Cobbly and all. So rather silly to send him emails IMHO.

mashiehood – Member

2/3 of NHS trust budgets are for salaries – how is that justifiable?

Easily – they work primarily to save people’s lives. What does this Hester bloke work for again?

Ah yes, that would be ruining people’s lives.

Mashiehood – I think the reasonable arguement starts at the point when the executives with the responsibility to allocate and manage the capital supplied by shareholders deliver a return that exceeds it cost. True capitalism would work when the rewards for turning around a difficult company accrue handsomely at the point of success not before then. Otherwise the whole principle upon which capitalism works (well – that just for some above!!) is eroded fatally

[Let’s not be silly. Hester does not go out to ruin peoples’ lives. Keep the valid arguments real]

mashiehood – multiples of average pay. or perhpas multiples of the lowest pay in the organisation

If mega wages and bonuses attracts the very best then how come RBS went down the pan ?

I’m fairly sure that the bonus culture was in full swing when everything went tits up in banking causing the greatest global economic crises since the 1930s.

Could be worse…

He could have earn’t £12,000,000 from bankrupting a country, paid 2% tax, joined a fruity religion, be laughing into his merlot and still be loved bt STW!

Zoe’s – he pays taxes so the nhs can continue to save lives!
TH – and the LTIP does exactly that. The bonus he is receiving is not cash.

TJ – beware the law of unintended consequences. Just think for one moment what the introduction of pay mutliples would do? Count on the fingers of one of your hands the CEO’s that would reduce their pay. Then imagine all the low paid staff who would have their jobs outsourced to low cost countries.

Better transparency and shareholders taking full responsibility is far more sensible and that is why the government have failed in this case – if only in setting the correct example.

eh RBS crash is indeed being attributed to incompetence

no its not cash but it is money 😉

beware the law of unintended consequences.

How do i avoid the unintended?

Mashie – i did say that the deferral was a mitigating factor, but IMO it is not enough. The extra-rewards should only be granted at the point when success has been delivered.

Very happy if Hester does a good job and delivers RBS back to rude health for him to be paid this much.

Buzz – IMO returns not size should determine remuneration.

JY – you can’t hence I said “beware” – but you can learn from history. Anyway good night!!

Yes good night all

teamhurtmore – Member

The extra-rewards should only be granted at the point when success has been delivered.

Very happy if Hester does a good job and delivers RBS back to rude health for him to be paid this much.

That’s far too long-term a product to judge his success and failure on- nobody has any idea how long it’ll take to get RBS back to strength. You need to have shorter-term goals, and targets have to be defined.

Unless of course you think it’s reasonable to judge failure on a constant ongoing basis but success only on an unspecified decades-long timescale?

Putting out his email address is vindictive, childish and naive. you’ve clearly massively bought into the left-wing agenda that all rich people are nasty and selfish. Which is simple prejudice and wrong IME.
He didn’t wreck the bank, he’s trying to straighten it out and give us (taxpayers) our money back, and maybe more.
There’s plenty more he could do and earn more if he wanted to. If he gets hounded by joe public and refused the reward he was promised when he took the job he’ll walk, as would anyone decent. So all we’ll be left with is the dross.
Anyone carrying out an email harrassment campaign like this clearly has never taken any responsibility in a business environment and understood how challenging it is to have other people’s livelihoods in their hands.
If this is how the British public think it’s ok to behave then we’re proper stuffed and it’s time to leave IMO

Bye then brooness – even Cameron thinks this is wrong.

don’t let the door hit you on the way out will you.

Dunno where you will go tho.

You don’t think he will have his inbox filled up and it will have any effect on him do you?

even Cameron thinks this is wrong.

All part of the left-wing agenda TJ.

Ah.

You going round for beer and sandwiches Ernie? My invite seems to be lost in the post

Fraid not TJ. But those other lefties like Clegg and Cable who are equally critical of the banker’s bonus culture undoubtedly will.

I’d bet that email address doesn’t ever get looked at by anyone, given his high profile and that he’ll be a target for folks anger, he’ll have an alias. You’d be as well sending a mail to john.smith@rbs.co.uk…

How many people have been axed from the RBS under Hester’s stewardship?

This is just media sensationalism at its best.

That salary and bonus is below the norm for someone with that amount of responsibility.

He is being paid to do a good job, which he is, get over it.

They are making billion pound profits rather than billion pound losses!

900k bonus seems relatively small in comparison.

+1 Farmer John. Its a lot of cash in shares, If he does well and the company does well, the value of the shares will reflect this. The converse is also true.

He was handed a bad deal to iron out and is sorting it, slowly. Unlike the current government (and probably every incoming Govt), I don’t hear him whining about the cards he was dealt. I think he is managing my investment well right now and working on returning my investment. At the end of the day, the bank got a loan, it wasn’t nationalised. He is not a Civil Servant, he works for a privately owned bank which at the moment has a lot of public money loaned to it.

If You have a loan from your bank do you receive a letter from your bank manager telling you to give up any bonus or surplus you have and pay it all to them as they have a vested interest in you?

Fred G however… in a way I sort of admire him being able to manage to negotiate such a good deal on his pension, however, the team that signed it off (he couldn’t do it himself), need their heads banging together. Staggering arrogance of the man.

Steven Hester, Keep calm, carry on.

He is being paid to do a good job, which he is, get over it.

They are making billion pound profits rather than billion pound losses!

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, not just generate big fat profits for themselves.

Royal Bank of Scotland misses lending target

“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.”

All the banks are making a profit, it’s generally impossible for a bank not to make a profit. Which is why it was so shocking when the banks failed. Don’t confuse not being utterly incompetent with being a genius.

And despite banks now making themselves tidy profits, there is plenty of criticism leveled at them that they aren’t helping the recovery from the mess which they created.

Perhaps some people need to “get over” their profit fetish.

Monkeys work for peanuts, but they can’t turn a bank around. I’ve met Stephen Hester a number of times, and he’s certainly no monkey. He’s really very good indeed.

Either accept that you need a frighteningly competent person to run a business – which costs a lot – or employ someone cheap. Note that SH’s bonus is in shares, it’s split between two tranches (deferred until March 2013 and 2014), and he gets none of it if he leaves early.

Yes, it’s a lot, a great deal more than most people can even dream of. But unless you charge the whole world tomorrow, refute capitalism and close down the banks, this is how it works.

Just to add – how come there’s no moral outrage over John Hourican or Ellen Alemany? Bet you’ve not heard those names in the press. But it’s the same company, and they’re earning more than Hester. As ever, it’s media hysteria, fed by the politicians, who would rather have the light shone on anyone but themselves.

I’ve met Stephen Hester a number of times, and he’s certainly no monkey. He’s really very good indeed.

Except of course when he gets it wrong :

“Hester admits he is not the most clubbable of folks and smart and successful though he is, does not get everything right. Eight months before British Land and others were caught in the commercial property slump, he said: “I don’t believe we are about to see a market decline, but the period of sharp growth is over.”

Not what I expect from an individual who has several brains and extraordinary powers which makes him worth millions and totally indispensable to the nation.

Isn’t his bonus in shares and not actual cash? Which may or may not have a bearing.