manshimajin Posted February 5, 2009 Share Posted February 5, 2009 RBS, whose 'strap line' is 'Make it Happen' is certainly doing that for some of its people. The senior staff of the bank have managed the value of the bank in such a way that it is now worth 2.9% of its value in 2007 including the purchase of it's slice of ABN Amro for a price that is recognised as being way over the top. The same bank is now planning to pay cash bonuses to its 'high flyers' - reputedly in 6 figure numbers. At the same time it is making 750 staff redundant in Ireland (I don't know about the UK but probably quite a number there too) as well as being bailed out from financial collapse by the UK taxpayers. RBS Bonuses I am not against some form of bonus - but cash bonuses at the moment do not reflect what is needed in the market place - either for public perception or for the job ahead of the banks. The rationale given by the RBS spokesperson is: Some bonuses among the 20,000 bankers in GBM are regarded as unavoidable either because of guarantees given in the past or to retain individuals who have generated significant profits in their areas. From my past experience if you want to retain people you don't pay cash bonuses - pay them and they can then move (and if they can't - why pay them anyway?). To retain people you pay long term bonuses that depend on the person performing now and still being here in 3 to 5 years time. When capital is so short that you have to borrow it from the taxpayer to avoid being insolvent you don't use this precious resource for bonuses - but for restarting loans to SMEs and home owners. This is a time when managers are paid to manage and should not expect carrots to do their jobs. Whilst a lot of people would probably not want any bonuses paid I would not object to them providing they were in the form of share options that were exerciseable in 3 years time if the value of RBS shares attains say £2.90 which would mean they need to achieve a 10 times increase in value to get anything. I also think that the 'guarantees given' excuse is weak - if you don't have money a guarantee is worthless. And basically without taxpayer funds RBS is a financially worthless institution at present. Edit: PS: I have just discovered that RBS have announced 2,700 redundancies (14% of staff) - not including the 750 in Ireland mentioned above. And of course they announced in January this year the biggest ever loss in UK corporate history. A lot of the bonuses are to go to GBM staff (their investment bank arm) - I therefore like this quote from their own Press Release on their annual results: GBM Income. Exceptionally difficult credit trading conditions, ongoing market dislocation, subdued activity levels, reserves against widening market spreads, and further write-downs on a variety of trading assets have impacted GBM’s fourth quarter income. Income was also negatively affected by the exposure to Bernard L Madoff Investment Securities LLC, as announced on 15 December 2008. The impact of changes in fair value and write-downs on GBM’s income, excluding Madoff, in the fourth quarter total approximately £2.8bn. In addition, reserves of approximately £0.6bn have been established against our Credit Derivative Product Companies (“CDPC”) exposures. As a result of all the above, fourth quarter income is estimated to be approximately £3bn lower than our expectations at the time of the IMS, only partially offset by a reduction in variable costs. and they are worried about losing these guys!!!!!!! Link to comment Share on other sites More sharing options...
Sebrof Posted February 5, 2009 Share Posted February 5, 2009 The world looks on in bewilderment and despair. S Link to comment Share on other sites More sharing options...
manshimajin Posted February 5, 2009 Author Share Posted February 5, 2009 And, surprise, surprise, RBS announce today that they will be putting £2 billion out to their branches for business lending. As Dr Albert Dottle used to say "Ther is only one little problem..." it's not to help existing business with their cashflow but is for new businesses and needs full business plans. Not about saving existing jobs then... I wonder if they would lend on Sir Fred Goodwin's Business Plan to take over ABN Amro? Link to comment Share on other sites More sharing options...
cheesemonster2005 Posted February 5, 2009 Share Posted February 5, 2009 It's time that companies which claim that they are morally responsible and state owned (or state financed) companies should use a fixed pay scale. No senior workers should be paid more than 5 times or 10 times (or whatever scale they wish to use) that of the lowest-paid worker. This ensures that if senior workers desire a pay rise everyone all the way down the ladder will also get one. The time of 6 figure salaries is over, I hope. Link to comment Share on other sites More sharing options...
theambo Posted February 6, 2009 Share Posted February 6, 2009 Its worth noting that RBS is something like the second largest employer after the government on the Island. I'm sure a few of the luxury car salesmen wont be seeing so much business at bonus time this year ! I also wonder how much tax is generated both from direct taxation of annual bonus payments on the island and also subsequent tax on spending. i.e. VAT not only for RBS but also the many other financial institutions on the island. Link to comment Share on other sites More sharing options...
manxman2 Posted February 6, 2009 Share Posted February 6, 2009 its obscene i never really understood how someone like hitler could despise a breed of people so much he wanted to eradicate them .. but bankers are sure heading in that direction they are so unashamedly greedy... Link to comment Share on other sites More sharing options...
cheesemonster2005 Posted February 9, 2009 Share Posted February 9, 2009 If the bankers want us to stop thinking of them as wankers then they should refuse this crazy bonus. But we all know wankers will never say no to more money. Link to comment Share on other sites More sharing options...
manshimajin Posted February 9, 2009 Author Share Posted February 9, 2009 TBH I would not pay and let them sue if they wanted to. Imagine the great publicity they would get if they took a civil action to try and get a big bonus paid. Faces in the paper, addresses known, greed made public. I really am baffled how a company that loses 97% of its value can justify performance bonuses. If they do not have a BIG clause on overall group performance and group capacity to pay in each contract the people who negotiated and documented them from the company side should be given instant dismissal. So damn amateurish - then bankers have never actually been good at managing non-standard risk. Link to comment Share on other sites More sharing options...
Tugger Posted February 9, 2009 Share Posted February 9, 2009 If you're a manager with a contractual entitlement to a 15 grand bonus, staring down a recession, you won't really care about the publicity, you will just want the money. Link to comment Share on other sites More sharing options...
thebees Posted February 9, 2009 Share Posted February 9, 2009 RBS is absolutely huge, I dont quite understand how it all works though. When they say RBS do they mean RBS the bank, RBS the factoring companies, RBS the insurers, RBS the dog groomers and so forth? RBS seem to own loads of other things (cattle finance, churchill insurance etc), are RBS shares, shares in the entire RBS entity or just the bank arm? Its all quite confusing, what does the government own part of? Do they even know? RBS wouldnt want to lend businesses money, much better for them if they sell RBS factoring to a company, which is more lending, disguised a bit. Link to comment Share on other sites More sharing options...
Kurashima Posted February 9, 2009 Share Posted February 9, 2009 Nice comment on Five Live tonight about this "A Bonus is supposed to be something you get in addition to your Salary for Exceptional Performance. Ive never heard of a Bonus being paid just for doing your job, and in this case, doing it very poorly indeed". The trouble is, these individuals with guaranteed bonus pools are near impossible to remove without paying huge amounts of compensation, and the law courts will unfortunately back them since the very same managers who are receiving the bonuses are the ones signing the contracts to give these bonuses to others. You would quite literally have to rip the entire banking structure of most institutions to shreds to get rid of parasites like this, who ironically, if the credit crunch wasnt biting so hard , would be referred to as "Captains of Industry" for their ability to manage such large companies. Link to comment Share on other sites More sharing options...
Sebrof Posted February 9, 2009 Share Posted February 9, 2009 Nice comment on Five Live tonight about this "A Bonus is supposed to be something you get in addition to your Salary for Exceptional Performance. Ive never heard of a Bonus being paid just for doing your job, and in this case, doing it very poorly indeed". The trouble is, these individuals with guaranteed bonus pools are near impossible to remove without paying huge amounts of compensation, and the law courts will unfortunately back them since the very same managers who are receiving the bonuses are the ones signing the contracts to give these bonuses to others. You would quite literally have to rip the entire banking structure of most institutions to shreds to get rid of parasites like this, who ironically, if the credit crunch wasnt biting so hard , would be referred to as "Captains of Industry" for their ability to manage such large companies. I think the government is going to have to legislate. There is no other way. Wonder if they've got the guts to do it, though. S Link to comment Share on other sites More sharing options...
Kurashima Posted February 9, 2009 Share Posted February 9, 2009 Nice comment on Five Live tonight about this "A Bonus is supposed to be something you get in addition to your Salary for Exceptional Performance. Ive never heard of a Bonus being paid just for doing your job, and in this case, doing it very poorly indeed". The trouble is, these individuals with guaranteed bonus pools are near impossible to remove without paying huge amounts of compensation, and the law courts will unfortunately back them since the very same managers who are receiving the bonuses are the ones signing the contracts to give these bonuses to others. You would quite literally have to rip the entire banking structure of most institutions to shreds to get rid of parasites like this, who ironically, if the credit crunch wasnt biting so hard , would be referred to as "Captains of Industry" for their ability to manage such large companies. I think the government is going to have to legislate. There is no other way. Wonder if they've got the guts to do it, though. S No , they have got a set of testicles between them. Theyll bottle it, those beneath them will bottle it, and the Status Quo will continue unabated. Link to comment Share on other sites More sharing options...
Sebrof Posted February 9, 2009 Share Posted February 9, 2009 RBS is absolutely huge, I dont quite understand how it all works though. When they say RBS do they mean RBS the bank, RBS the factoring companies, RBS the insurers, RBS the dog groomers and so forth? RBS seem to own loads of other things (cattle finance, churchill insurance etc), are RBS shares, shares in the entire RBS entity or just the bank arm? Its all quite confusing, what does the government own part of? Do they even know? RBS wouldnt want to lend businesses money, much better for them if they sell RBS factoring to a company, which is more lending, disguised a bit. RBS Group PLC is one company, with a load of subsidiaries (like NatWest), many wholly owned, but some jointly owned with other institutions. An example is the joint venture with Santander and Fortis to buy ING. If you are a shareholder in RBS Group you therefore own a tiny chunk of the whole kit and caboodle. Unfortunately, it's not worth very much. Along with all the assets, there are some big and growing liabilities. How big we will find out in the next year or two. S Link to comment Share on other sites More sharing options...
Sebrof Posted February 9, 2009 Share Posted February 9, 2009 I think the government is going to have to legislate. There is no other way. Wonder if they've got the guts to do it, though. S No , they have got a set of testicles between them. Theyll bottle it, those beneath them will bottle it, and the Status Quo will continue unabated. Perhaps. But it would of course go down very well with the electorate. S Link to comment Share on other sites More sharing options...
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