RBS CEO Bonus

[flanajb]

I want to comment about how f!cked off I am at having to hear about how the RBS CEO should not get his bonus. I have got to the stage now where I am hoping that he and his Senior Management Team just walk out and so do most of the staff. Then we can watch as the bank goes down the pan and the tax payer gets none of there money back!

The logic in all this is a complete joke. If I owned a major stake in a company, I would certainly not be dictating about what the staff are paid, especially, if there were other similar business down the road who did not have the same problem and my actions risked the potential profitability of the organisation. I would just let the senior management team get on with their jobs and to try and make me a healthy return on my investment.

Constantly interfering does not help and will cause staff morale to be low.

I work in Banking and I do agree that senior bankers get paid a lot of money, but if you restrict the pay of only one CEO he will leave and you will then have a state owned bank that no right minded intellect would touch with a barge pole.

 

[whacky]

So the guy has presided over a £4bn swing in profits and takes a million as reward. 0.00025% in all. Not sure it's a big deal.

 

[Blister]

OK

I have read your post , not sure I understand it though :?

What part did I not get correct ?

He is paid 1 million pounds a year , is this for just taking the job and turning up 5 days a week , and doing nothing :?

If the bank goes down the drain he still get 1 million pounds ?

If he does his very well paid job as he should why does he now get a extra 1 million pounds as a bonus for doing it properly and making a profit :shock:

I go to work 5 days a week and only get paid once not TWICE

Was this person not in banking when the problems were caused , If he was and had any conscience. at all he would not take the massive second payday

I as a youngster always thought highly of a bank manager but now think no more of them than me , Mr average who works for a fixed wage per year

 

[Karl]

Blister - the bonus IS part of his salary. If you were paid a flat rate of X per month, but with a bonus of Y if you met certain pre-defined targets within that month, i'm sure you'd be a bit hacked off if you met those targets and then your bonus was refused as part of a populist movement.

As I understand it the guy wasn't at RBS when it went pear-shaped.

 

[misterfish]

When I worked a bonus was only given for performance and effort over and above my target. Also the amount was never more than 3-4% of my salary. It was never an expectation or right!

Misterfish

 

[studders]

Ditto. And if I reached the target regularly it got raised. There's incentive for you.

 

[Karl]

When I worked a bonus was only given for performance and effort over and above my target. Also the amount was never more than 3-4% of my salary. It was never an expectation or right!

Misterfish

Of course it's a right if your contract says that you will get a bonus for meeting (or indeed a greater bonus for exceeding) pre-determined targets.

 

[paulm]

Karl is spot on, it's a contractual bonus set out in writing and agreed up front when he took the job, and pays out when pre-determined criteria are met, it's not a pat on the back that can be given as a favour if it's felt like it, or withheld if people don't feel like it.

Don't care personally if he gets it or not, and not saying he does or doesn't deserve it, just that it will be a legally binding contract and matter of fact, and if it isn't paid when he's met the contractual requirements then he could leave immediately and sue for constructive dismissal, loss of earnings and bonus, etc and would cost the bank a lot more than the bonus amount.

Having then done that, what competent experienced person with the skills to run the place in his absence would want to take the job on when they could get the same or more money elsewhere without half the hassle. The best available people wouldn't want to take it on so you would end up with less experienced or competent people and risk them doing a poorer job still, albeit maybe they would be a bit cheaper to pay, but don't think that does the taxpayer much good.

The people who appointed him and agreed the criteria against which his bonus would pay out, or not, are the ones that should be held to account if those terms were inappropriate, but we don't know what they were so can't really judge that.....

Cheers, Paul

 

[RogerS]

Well said, Paulm. Spot on. And for flanajb for raising the issue.

NB....there is IMO a separate argument for limiting the ratio of pay packages between top tier and bottom tier ...across all industries and across all countries...but that is a different debate.

 

[cambournepete]

Whilst it may be legally and contractually correct, as RBS is mostly owned by us, it seems ridiculous and obscene to have agreed this in the first place. Try telling someone (deserving) with little or no income that this is "fair" though.

 

[flanajb]

Whilst it may be legally and contractually correct, as RBS is mostly owned by us, it seems ridiculous and obscene to have agreed this in the first place. Try telling someone (deserving) with little or no income that this is "fair" though.

If they had not agreed to the package, no senior banker would have taken the position and they most likely would have had to nationalise the bank in its entirity. If they did that whole teams would have left and the bank would have been in a right pickle.

Whilst regulating salaries might be popular with the masses, it would be a disaster. This would have to be a global policy, otherwise, all educated high earning individuals would just leave the UK to other locations where no cap existed.

 

[paulm]

Whilst it may be legally and contractually correct, as RBS is mostly owned by us, it seems ridiculous and obscene to have agreed this in the first place. Try telling someone (deserving) with little or no income that this is "fair" though.

I have every sympathy for good people who are not in good circumstances through no fault of their own. That doesn't mean though that nobody else should do better than them though, does it ?

In theory they, and you and I, and anybody else who wants to has the chance to go and apply for that or other jobs that pay ridiculous amounts of money, and if we've got the requisite skills, experience and track record to convince people to take us on then we can join in at the trough. If somebody else is better qualified for a particular job than us though and gets it, and the pay that goes with it, why is that unfair ?

I'm not a banker though, and not particularly supportive or unsupportive of them either, just to be clear, just trying to bring a bit of objectivity to the usual bash the bankers topic, though probably many people aren't really interested in that and just want to let off steam regardless (not you particularly Pete, just generally) !

Cheers, Paul

 

[RogerM]

As I understand it, Wayne Rooney gets paid £250,00 per week, and Eric Clapton is still pulling in nearly £20m a year. Are we really saying that the guy tasked with turning a profit for the tax payer on a near insolvent bank in which we have a £45 billion stake, and which employs 180,000 people worldwide is worth less than Wayne Rooney gets in a month? And don't forget his bonus is to be paid in shares in RBS and which he can't sell for 2 years. If the share price goes up the tax payers will get their money back when the bank is re-privatised. If he fails, then not only will we not get our money back but the RBS boss will be sitting on a worthless bonus.

The outcry that this is inappropriate for a state owned bank is crazy. What it needs is someone with commercial experience at its helm, not a civil servant with no experience in commerce. When did anything run by a government official ever turn a profit! Remember the Millenium Dome fiasco? If Stephen Hester is able to rebuild the bank and re-privatise it so as to return £45 billion or more to the public coffers, he will be cheap at twice the salary and bonus.

And for Ed Miliband to winge about lack of leadership on the issue from Cameron when it comes from the leader of the party that negotiated the contract that was offered to Hester in the first place really is breath-taking hypocracy!

 

[tomatwark]

While I can see both sides of the argument.

It was down to the Labour government that this has happened because they agreed to this deal.

What should of happened is a clause was put in that he could not sell his shares UNTIL the government sold their stake.

This would mean that he would either make a lot of money as well as the tax payer which means he did the job right or make no so much if it was not sold on as at profit.

At the moment if he can see it all going wrong because he has made balls up he can cut his losses and get out.

This is what we get for having failed lawyers and people born with silver spoons stuck up their backsides running the country who have no idea of what happens in the real world.

I bank with RBS as I have no choice as Bank of Scotland/Lloyds/TSB and Barclays are worse, the service at the local level is excellent.

At least he is not dishonest like Fred the Shred, who should have been investigated for fraud, because he must have known what was going on.

In the end rich will get richer and the rest of us will struggle on, this is how it has always been and always will be.

But as long as they buy Furniture and Kitchens off me I am not going to complain to loudly.

Tom

 

[flanajb]

As I understand it, Wayne Rooney gets paid £250,00 per week, and Eric Clapton is still pulling in nearly £20m a year. Are we really saying that the guy tasked with turning a profit for the tax payer on a near insolvent bank in which we have a £45 billion stake, and which employs 180,000 people worldwide is worth less than Wayne Rooney gets in a month? And don't forget his bonus is to be paid in shares in RBS and which he can't sell for 2 years. If the share price goes up the tax payers will get their money back when the bank is re-privatised. If he fails, then not only will we not get our money back but the RBS boss will be sitting on a worthless bonus.

The outcry that this is inappropriate for a state owned bank is crazy. What it needs is someone with commercial experience at its helm, not a civil servant with no experience in commerce. When did anything run by a government official ever turn a profit! Remember the Millenium Dome fiasco? If Stephen Hester is able to rebuild the bank and re-privatise it so as to return £45 billion or more to the public coffers, he will be cheap at twice the salary and bonus.

And for Ed Miliband to winge about lack of leadership on the issue from Cameron when it comes from the leader of the party that negotiated the contract that was offered to Hester in the first place really is breath-taking hypocracy!

=D>

 

[Digit]

Out of curiosoty does anyone know what his take home will amount to?

Roy.

 

[tomatwark]

A lot more than I will ever earn.

Tom

 

[flanajb]

I was having a long chat with my friend who runs a tool company. He hit the nail on the head.

The country has a disease where by if someone earns vasts sums of money or has been very successful, the lower paid feel a grievance to them and start saying "it's not fair, why should they earn more than me"

Sour grapes I say, and maybe if they had done better at school they too could have been earning that sort of money. We make our choices in life and some make it and others don't

 

[RogerS]

I was having a long chat with my friend who runs a tool company. He hit the nail on the head.

The country has a disease where by if someone earns vasts sums of money or has been very successful, the lower paid feel a grievance to them and start saying "it's not fair, why should they earn more than me"

Sour grapes I say, and maybe if they had done better at school they too could have been earning that sort of money. We make our choices in life and some make it and others don't

+1

 

[Digit]

Yep! I would ask anyone who says he should return his bonus, I'm not getting involved with whether he deserves it or not, and BTW it's shares not money, one simple question. Would you give it back?

Roy.