RBS board threaten to resign over bonuses

[Geoff Kilpatrick]

 

Cheerio then. You were bust FFS!

 

That said, there is an interesting aside to this. The Government is in a quandary because the public will tell the banks to foxtrot oscar but if HMG want to privatise them later on they will still need a competitive bank to sell.

[david mcgee]

 

Cheerio then. You were bust FFS!

 

That said, there is an interesting aside to this. The Government is in a quandary because the public will tell the banks to foxtrot oscar but if HMG want to privatise them later on they will still need a competitive bank to sell.

 

The banks quite plainly dont give a sook about any of us, so why should we support them?

 

Dont these wh@nkers realise they are merely civil servants now?

 

Pay them a respectable wage and use the bonuses to start to repay the tax payer.

[The Doctor]

The bank has made a ?15b loss, the investment arm has made a ?6b profit, so the board want to reward the investment arm with ?1.5b in bonuses.

 

If I was Darling I'd let the board walk, they can be replaced easily, there's a few tramps on the streets that would be just as competent as they've shown themselves to be.

 

You can find halfwits like that propping up the bar of any hostelry in the land.

[The Old Tolbooth]

I heard this news this morning on the radio too, and laughed out loud at it! The cheek of these robbing *******s knows no bounds, no way should the government back down to this lot, call their bluff and let them leave, I bet not many actually do!

 

The part that's galling me the most is that it's cost the average tax payer over ?4k each to bale these muppets out, and now they're moaning like feck that they cant have bonuses totalling ?1.5 BILLION!!!!

 

Unbelievable, or is it?

[Boris]

Let them walk.

 

Cheeky beggars.

[The People's Chimp]

Let them walk.

 

They should be hangin from lamposts. They got off lightly as they fleeced every single one of us.

 

Bonuses? mod edit off.

[bigwull22]

Let them walk.

 

They should be hangin from lamposts. They got off lightly as they fleeced every single one of us.

 

Bonuses? mod edit off.

 

Well said, but as its London Office they'll get away with it, you watch, remeber Brown will need a job come May.,

[felix]

It's about time we stopped the ridiculous disproportional rewards for people who gamble with other peoples money, and properly recognised people who take very real risks.

[Gershwin]

This is my favourite part of the bbc article

 

'RBS directors say it is their legal duty to act in the interests of shareholders, and that if they do not pay competitive bonuses, top talent will leave the bank.'

 

Is the same talent that got them into this mess?

 

Tossers.

[scottish_chicP]

Unbelievable really. I would definitely let them walk then they can struggle on like most of the nation is having to do at the moment!

[Johanes de Silentio]

Let them walk - the greedy ****ers!

[milky_26]

the worst thing is that the ?1.5B is an increase on what they got last year!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Miller Jambo 60]

Well said, but as its London Office they'll get away with it, you watch, remeber Brown will need a job come May.,

 

What a brass neck they have.

Should be told to get lost, muppets.

[Prince Buaben]

Bankers 'need to join real world' : BBC headline

 

http://news.bbc.co.uk/1/hi/business/8392791.stm

[Incompetnce]

Just so I'm clear on this, does this amount cover the entire staff of RBS, the Investment arm that made the profit, or the board itself?

[Sterling Archer]

Here's an interesting take on bonuses from the ever entertaining Robert Peston

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/12/public_servants_on_20m_a_year.html

 

 

Public servants on $20m a year

 

Twice a year, the chairmen and chief executives of Europe's biggest banks gather in secret for a chinwag about matters of collective interest.

 

They meet under the auspices of a hush-hush club formed after World War II, whose operations are so mysterious that even the grandees who attend it seem unclear what it's really called.

 

One bank supremo told me its name was the Instituts d'Etudes Financieres or some such; another that it went by the moniker IIEB.

 

Either way, what I can tell you is that it attracts a pretty high calibre of banker - and that its last meeting was just a few weeks ago at the plush London hotel, Claridges, where the main item on the agenda was the topical question of bankers' bonuses.

 

 

Present were - inter alia - Stephen Green of HSBC, Philip Hampton of RBS, Marcus Agius of Barclays and David Mayhew of JP Morgan Cazenove, and their counterparts from Germany, Italy, France and so on, including the grands fromages from Soc Gen and BNP Paribas.

 

Now, let's be clear: the idea that banks would ever collude to solve a mutual problem would be an outrageous and unwarranted slur. Collusive tendencies may have been in bankers' DNA two decades ago, but these days (who can doubt?) it's all about compete or die.

 

That said, they would dearly love a collective agreement to cease hostilities on bankers' pay, because they know there is a one-to-one correlation between each million pound bonus they pay and damage to their reputations.

 

But although they explored whether they could reach an entente on capping bankers' pay, they abandoned the ambition as a hopeless cause. Why? Because they can't get the Americans into the room.

 

This is what the head honcho of one giant bank said to me:

 

"The Americans will never agree to put a limit on bonuses. They regard it as a fundamental right to pay as much as they like. And if we cap our pay here in Europe, while they operate in the free market, well we'll all be dead."

 

Funnily enough, I heard a very similar lament from a senior member of the government the other day, who told me that the great failure of the recent G20 meetings of the world's most powerful governments is that they didn't agree a moratorium of at least a year on all bonus payments by banks.

 

As he said, there's a very strong intellectual case for saying no bank should pay a bonus for 2009, which is that:

 

a) none of them would be alive today in the absence of that $15 trillion bailout I've been boring on about, and

 

a vast proportion of their 2009 profits stem from the exceptional measures taken by governments and central banks to minimise the impact of a recession precipitated (in part) by banks' greed-fuelled recklessness.

 

So surely world leaders could have won a good deal of popular support, while not committing a heresy on the religion of capitalism, by simply instructing their banks that all their more senior employees would have to rub along on their six figure salaries for a year, with no bonuses paid.

 

Why didn't this happen? "The Americans would never sign up", says my well-placed informant.

 

Which is a bit odd, because in the US right now "Goldman Sachs" is a byword for qualities (in the public mind at least) that most of us would rather not have.

 

Alistair DarlingOne consequence of this failure to put in place an official bonus hiatus is that our chancellor of the exchequer finds himself in the hideous position of having to either approve Royal Bank's planned bonuses of between ?1.5bn and ?2bn, or veto them and risk seeing the RBS board announce a collective intention to resign (see my note of yesterday).

 

So what is the going rate for RBS's top profit generators? Well last year, when the bonus pool was ?900m for the investment bank, several hundred of its executives earned more than a million pounds each.

 

At the top end, an RBS currency trader in New York (at its Greenwich subsidiary) took home $20m and a commodity trader (in a joint venture that's now being sold) was paid $40m.

 

The past year has been a bumper one for forex and government bonds, which are the areas where RBS is particularly strong. So quite a number of its top traders will be expecting $10m plus.

 

And let's not kid ourselves that RBS would be paying this out of some act of charity. It in fact would argue that it doesn't pay top dollar.

 

Here is what many bankers have told me that they regard as extraordinary: it was Alistair Darling's choice to become the grand arbiter of how many forex traders can take home a seven-figure wedge (does he wear a hair shirt, as well?).

 

Even though the state (that's us) owns 70% of RBS (rising to 84.4%, in an economic sense), the chancellor didn't have to take direct responsibility for what the bank pays out in bonuses.

 

He could have maintained the not-quite fiction - or what he has argued for a good year - that RBS is an independent commercial entity, and the Treasury is more-or-less just another shareholder among many (albeit a humungous shareholder).

 

Or to put it another way, he could have said what is actually true in company law and the stock exchange listing agreement, that bonuses are a matter for RBS's board.

 

But presumably he didn't think that would wash with voters, even if it's actually true. So he insisted, when agreeing to recapitalise RBS (yet again) through the Asset Protection Scheme, that he would take a formal new power to authorise the total amount of bonuses paid and also the form of the bonus payments.

 

Form will be less problematic: RBS has already agreed, under pressure from the Financial Services Authority, that most of the payments will be in shares and that recipients will not be able to get their mits on all the shares till a number of years have elapsed.

 

But size of the so-called bonus "pool" will not be uncontentious. As I mentioned yesterday, Royal Bank has told Alistair Darling that it would intend to pay about 50% more in bonuses than last year in its investment bank, or between ?1.5bn and ?2bn in bonuses for the bank as a whole.

 

And its reasoning is simple: considerably more than that, it believes, would be wiped from the value of the organisation in a permanent sense, if it were not tot pay competitively and if its top profit-generators were to desert to competitors.

 

Which is why the directors received unambiguous legal advice that if they were prevented by the chancellor from fulfilling their duty (their fiduciary duty) by providing the rewards commensurate with preserving the wealth of the shareholders, they would have to quit.

 

It is clear that earlier this year, the Treasury accepted the argument that RBS had to pay the going rate. When RBS announced in February that it had reached agreement on its approach to pay and rewards for 2008-9, a press release from the bank also said that the government had conceded that the bank would pay "competitively with other international banks" for the current year.

 

What is unclear is what status that agreement now has, in the light of the chancellor's new power to approve or veto bonuses. Arguably, it may limit his ability to block payments he deems excessive.

 

To state the obvious, it is a mess, and surely only the hardest hearted would fail to feel a scintilla of sympathy for the chancellor, in this nightmarish predicament of his own making, should he sanction the twenty million dollar payments, or muller the bank? What a choice.

[bigwull22]

Here's an interesting take on bonuses from the ever entertaining Robert Peston

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/12/public_servants_on_20m_a_year.html

 

Monkeys could do that jab and make a profit with all the money various Governments have pumped into the system. These so called talented bankers are the same ones that caused the problem, they should all be in Jail for the damage they caused, Thatchers children right enough.

[Auld Reekin']

Aye, go for it lads (and watch yerselves out in the real world...)!

[The Mighty Thor]

I think it's time to let the board at RBS pursue other interests. I'd say the same for their investment banking division. The good old days are gone and 6 months ago they were a baw hair from clearing their desks and getting ?78 a fortnight from HM Government.

 

Times they are a changing.

[Currahee!]

Personally I'd tell them all to feck off!

 

What a cheek they've got wanting bonuses after what they've all done. Bonuses? They should be in jail.

[DigrsSlopBukit]

Hello..earth calling the bankers.....GIT FECKIN REAL!!!

 

Simple truth is if most of us common peasants were that bad at our jobs our erses wouldn't even touch the ground on the way out the door

 

Simply defies belief!

[redjambo]

Personally I'd tell them all to feck off!

 

What a cheek they've got wanting bonuses after what they've all done. Bonuses? They should be in jail.

 

And I'd be right behind you, kicking their greedy arses out the door.

[Wattie]

The bank has made a ?15b loss, the investment arm has made a ?6b profit, so the board want to reward the investment arm with ?1.5b in bonuses.

 

If I was Darling I'd let the board walk, they can be replaced easily, there's a few tramps on the streets that would be just as competent as they've shown themselves to be.

 

You can find halfwits like that propping up the bar of any hostelry in the land.

 

I don't work in finance. Last year, the department I work in made a healthy profit. Our counterparts in another department (another business line actually, in another continent) made such a royal mess of things they were closed down. The result was that NOBODY in the business got a bonus. In fact, they scrapped the bonus scheme all together. Did any of us resign in protest?

 

Darling should call the big wigs on it and let them walk, they can be replaced. Nobody needs that kind of money an it's time they tuned into the real world and gained a sense of perspective.

[Colonel Kurtz]

christ..get real

this has Ally Campbell,remember sexing up the dossier,written all over it

Darling will be given an opportunity to appear strong and the money will be paid some other way...like Barclays.

Myers was the one who AGREED goodwins package

[Geoff Kilpatrick]

The thing is, if other banks want to pay stupid bonuses, that should be their concern only but the Government should turn round and say that they won't bail them out if they do an RBS and HBoS (not that bonuses were the reason they went up the swanny - it was mispricing of risk).

[Ben Dover]

If it was effectively the 'loss making' management we are talking about then certainly GTF would appear to be the correct response. However if the investment wing of the bank has been paying it's way ( without any subs ) through all the credit crunch turmoil then, as obscene as the payments are, it's maybe not quite as simple as that.

[Geoff Kilpatrick]

If it was effectively the 'loss making' management we are talking about then certainly GTF would appear to be the correct response. However if the investment wing of the bank has been paying it's way ( without any subs ) through all the credit crunch turmoil then, as obscene as the payments are, it's maybe not quite as simple as that.

 

True, but investment banking is a piece of p*ss at the moment. QE has created the easiest one way bet in history.

[Auld Reekin']

If it was effectively the 'loss making' management we are talking about then certainly GTF would appear to be the correct response. However if the investment wing of the bank has been paying it's way ( without any subs ) through all the credit crunch turmoil then, as obscene as the payments are, it's maybe not quite as simple as that.

 

No, maybe not, but everyone else is having to bite the bullet and make sacrifices so they should as well. Wattie's point is a very pertinent one: a much greater sense of collective responsibility should prevail within the banking and finance industry.

[Ben Dover]

No, maybe not, but everyone else is having to bite the bullet and make sacrifices so they should as well. Wattie's point is a very pertinent one: a much greater sense of collective responsibility should prevail within the banking and finance industry.

 

Aye I know what you are saying and you would think, at the very least, they might tone it down a bit while most other folk are battling simply to keep their heads above the water.

[Cade]

I'd machine gun the cheeky feckers in Trafalgar Square.

 

[blairdin]

I'm dead against these investment ******s being handed huge bonuses.

 

Saying that, I'm not against the staff that earn about ?13k a year staffing the branches where we go about our business and moan our tits off getting something. They've had a tough tough year. I'm sure there'll be a few of them post here.

 

However - I'm going to play devils advocate for a minute.

 

We all own 84% of this monster, we're the biggest shareholders, so it's in every one of our interests that they are a success. They were bailed out using a considerable amount of our cash. I want them to pay it back and then some. To say the least.

 

I don't give a toss about the board. But if the investment ******s spit the dummy and leave, they'll be fine, they'll go do their job for some other mug of a financial services employer. what then for RBS and where does that leave us? Having made a decision to bail them out, we now need them to be a success.

 

What do people think?

[doctor jambo]

The mass redundancies in the financial sector should mean that these guys can easily be replaced, possibly by guys hungry to make their names in order to secure better posts in future

When state owned companies are sacking thousands they should not (especially as RBS as a whole is still losing money hand over fist at OUR expense) be in receipt of bonuses

NHS budgets cut

Council budgets cut

Essential projects cancelled

Basic services squeezed

Public sector pay frozen

 

Bankers should really be hanging their heads in shame, but as none of the above will even vaguely affect them I rather doubt it

[kitster]

The thing is, if other banks want to pay stupid bonuses, that should be their concern only but the Government should turn round and say that they won't bail them out if they do an RBS and HBoS (not that bonuses were the reason they went up the swanny - it was mispricing of risk).

 

Was it though GK? I believe it was utter greed myself..having been an auditor in a previous life the signs were there this could happen from what I saw...They failed to listen when the going was good and they are failing to listen now when they have no right to demand any bonus whatsoever..the only reason they are alive is thanks to the taxpayers who had no choice in the matter about it. Why when so many people are struggling right now can they possibly defend this? They won't attract good people? The same 'good' people who took our banking system to the brink? Very strongly against their outbursts..try and live in the real world for a change chaps!!

[portobellojambo1]

The mass redundancies in the financial sector should mean that these guys can easily be replaced, possibly by guys hungry to make their names in order to secure better posts in future

When state owned companies are sacking thousands they should not (especially as RBS as a whole is still losing money hand over fist at OUR expense) be in receipt of bonuses

NHS budgets cut

Council budgets cut

Essential projects cancelled

Basic services squeezed

Public sector pay frozen

 

Bankers should really be hanging their heads in shame, but as none of the above will even vaguely affect them I rather doubt it

 

While all of the above is true do you not think that one of the ways to alter the above is by the Government getting back what they paid out in tax payers money, and then be in a position to re-invest it according to their choice/needs.

 

It actually creates a kind of no win situation, because people find such bonus payments offensive. But for this repayment to be made to the Government, sooner rather than later, the Investment Marketing wing of RBS has to make sh*tloads of money. The Board of Directors appear to believe that can best be achieved by having the correct people in place, and rewarding them if they meet or exceed target.

 

The flip side is that they do all move to private institutions who do reward them with large bonuses, and RBS are left to recruit lower level staff, who may either take a hell of a lot longer to achieve any set targets, or fail miserably.

 

If you were thinking of employing someone to build a new house for you would you prefer to employ a master builder or someone who is three months into their apprenticeship.

 

Others may well be out there looking for employment, but how many of them do you think would be willing to work in Investment Banking with RBS, receiving a salary of say ?50K* with no bonuses, when they know they can do the same job for another bank and earn ten times that amount (* - just using this as an example, have no idea what sort of salaries these people are on), plus bonuses.

 

The above doesn't mean I agree with these huge payments by the way, but I do understand the thinking behind them.

[Geoff Kilpatrick]

Was it though GK? I believe it was utter greed myself..having been an auditor in a previous life the signs were there this could happen from what I saw...They failed to listen when the going was good and they are failing to listen now when they have no right to demand any bonus whatsoever..the only reason they are alive is thanks to the taxpayers who had no choice in the matter about it. Why when so many people are struggling right now can they possibly defend this? They won't attract good people? The same 'good' people who took our banking system to the brink? Very strongly against their outbursts..try and live in the real world for a change chaps!!

Point taken Kit but the fundamentals of the assets involved at the heart of the crisis were the problem. Sure, as a by product it augmented the greed, arrogance and hubris, particularly in a monetary system where they were able to magic money out of thin air. The problem was that they ran out of people to lend to as they had saturated the debt markets. When it all turned out to be pish the whole edifice off that small base crumbled into nothing, hence the bailouts.

[david mcgee]

The thing is, if other banks want to pay stupid bonuses, that should be their concern only but the Government should turn round and say that they won't bail them out if they do an RBS and HBoS (not that bonuses were the reason they went up the swanny - it was mispricing of risk).

 

Your missing the point.

 

They took excessive risks because they knew there were massive bonuses to be made.

 

The fact that they never paid with their jobs and the tax payer bailed them out gives the green light for them to carry on as before.

 

Everyone else in the Country suffers whilst these bar stewards continue to be rewarded, they better hope that they dont cause part two of the credit crunch because they will be pursued by lynch mobs.

[Csaba's Broon Shoes]

Your missing the point.

 

They took excessive risks because they knew there were massive bonuses to be made.

 

The fact that they never paid with their jobs and the tax payer bailed them out gives the green light for them to carry on as before.

 

Everyone else in the Country suffers whilst these bar stewards continue to be rewarded, they better hope that they dont cause part two of the credit crunch because they will be pursued by lynch mobs.

 

Good point , Part 2 of the credit crunch is a real possibility , this country is not out of recession yet and many people will suffer for years to come due to these gamblers . This has got a bit of mileage in it yet , what planet do these bankers come from they think they are above everybody else as if they were life saving brain surgeons , however it seems the major players don't understand the real value of money and have no grasp of simple arithmetic . They had it good for too long making up the rules for themselves

Bonuses ? WTF is that , do they not get a salary are they poorly paid for what they do , do they get their hands dirty , do they put their lives on the line for others on a daily basis , do they save lives , do they cure the sick

Naw they just swing around on leather seats with wheels on pushing a pen all day from 9 to 5

What goes around comes around , just plain greed

[Auld Reekin']

Good point , Part 2 of the credit crunch is a real possibility , this country is not out of recession yet and many people will suffer for years to come due to these gamblers . This has got a bit of mileage in it yet , what planet do these bankers come from they think they are above everybody else as if they were life saving brain surgeons , however it seems the major players don't understand the real value of money and have no grasp of simple arithmetic . They had it good for too long making up the rules for themselves

Bonuses ? WTF is that , do they not get a salary are they poorly paid for what they do , do they get their hands dirty , do they put their lives on the line for others on a daily basis , do they save lives , do they cure the sick

Naw they just swing around on leather seats with wheels on pushing a pen all day from 9 to 5

What goes around comes around , just plain greed

 

If they did, they'd certainly get paid a fraction of what their current salaries are (before any bonuses).

[Geoff Kilpatrick]

Your missing the point.

 

They took excessive risks because they knew there were massive bonuses to be made.

 

The fact that they never paid with their jobs and the tax payer bailed them out gives the green light for them to carry on as before.

 

Everyone else in the Country suffers whilst these bar stewards continue to be rewarded, they better hope that they dont cause part two of the credit crunch because they will be pursued by lynch mobs.

 

Fair enough. I would argue that part of that was the effect of banks becoming money shops, however, as opposed to risk managers. The bankers didn't care as you rightly point out - their remuneration was based on deals and making them as quick as possible.

[Geoff Kilpatrick]

This is the cost to you

 

Loving the fact that RBS had a clean bill of health the week before it went breasts heavenwards!

[Ben Dover]

This is the cost to you

 

Loving the fact that RBS had a clean bill of health the week before it went breasts heavenwards!

 

Indeed, quite incredible Geoff, though It's possible that 'the experts' thought that keeping that info under wraps was better than any panic rumours re. the banks standing.

Mind you, reading that article further, I notice that NOTHING appears to have happened regarding the banks failure to pass on OUR DOSH to the small business sector to get the economy going again.

[bigwull22]

While all of the above is true do you not think that one of the ways to alter the above is by the Government getting back what they paid out in tax payers money, and then be in a position to re-invest it according to their choice/needs.

 

It actually creates a kind of no win situation, because people find such bonus payments offensive. But for this repayment to be made to the Government, sooner rather than later, the Investment Marketing wing of RBS has to make sh*tloads of money. The Board of Directors appear to believe that can best be achieved by having the correct people in place, and rewarding them if they meet or exceed target.

 

The flip side is that they do all move to private institutions who do reward them with large bonuses, and RBS are left to recruit lower level staff, who may either take a hell of a lot longer to achieve any set targets, or fail miserably.

 

If you were thinking of employing someone to build a new house for you would you prefer to employ a master builder or someone who is three months into their apprenticeship.

 

Others may well be out there looking for employment, but how many of them do you think would be willing to work in Investment Banking with RBS, receiving a salary of say ?50K* with no bonuses, when they know they can do the same job for another bank and earn ten times that amount (* - just using this as an example, have no idea what sort of salaries these people are on), plus bonuses.

 

The above doesn't mean I agree with these huge payments by the way, but I do understand the thinking behind them.

 

Surely it is in the Governments interest to get the money back a bit slower as they can charge the banks more in interest.

[Baird, King and Michael]

If you were thinking of employing someone to build a new house for you would you prefer to employ a master builder or someone who is three months into their apprenticeship.

 

Well I certainly wouldn't be looking to employ "the master builders" who were responsible for the previous house crashing down around our ears.