RBS Bonuses

[TooNice]

Now I know that people say Hester commands a "market value," as do all the other high-flying bank executivess, and if RBS refuses to pay the going rate, it will not get the "best" people to take these important positions, but as someone said on Radio 4's Any Answers, "Train me up and I'll do it!" If Hester goes, there are plenty of other people who will do the job just as well, for less money, and who will guide the bank back to the sensible banking practices it used to follow.

Anyone can claim that they would do it, but I am not sure how we can infer that they'd do it well with or without training (I am going on the basis that the job involves more than "spinning on a chair, signing papers and playing golf). If the person making the claims haven't taken the initiative to do what it takes to do the job, then I can't see any claims as anything but hot air. And I wonder how many of those initially willing to do the job for less, would turn down an offer to do it for more once their abilities are proven (if).

[opel80uk]

The politics of envy have truly taken over, and I expect to see more and more of this unformed bile against anyone who is not an avowed member of the 'ordinary'. The problem being is that there is no clear definition of that group, other than 'Anyone who earns more than I do'.

I would argue that it is exactly this kind of attitude that has helped get us to where we are. The implication that, if you criticise the likes of bankers, then it follows that you are envious is absurd. I don't see the same furore around hospital consultants who, when you take into private work, earn vast sums of money, certainly compared to the average Joe. And I don't remember this furore around Bankers packages in the good times, and that is because at that time it was generally perceived that they were doing their job, and doing it well. What people find hard to stomach is that these sums are being bandied about now for a particular sector that is clearly perceived as having performed terribly, and which has helped to decrease living standards across the country.

The other issue is this. Someone like Fred Goodwin was being paid substantial sums in bonuses whilst overseeing (and contributing to?) a collapse at RBS. He was given a huge pension, and financially at least, doesn’t seem to have suffered much punishment (More uninformed bile perhaps?). The knock on effects from incidents like this are still being felt today; people are wary, given how much money was handed to those that we now accept to have failed, how does the public know it’s not happening again? If the sector wants to keep these bonuses, and doesn’t want to face a public backlash, then they need to explain in terms that’s your average person can understand, just why they have earned it and, in the case of RBS, how that is going to directly benefit the taxpayer long term. Whether they like it or not, public opinion is such, that they need to justify these payments. If indeed, as the likes of Saracen seem to suggest, Hester is doing a good job, I would have thought this would be fairly easy to do.

It has little to do with envy, and everything to do fairness & inequality. To dismiss it as simple jealousy really betrays a lack of understanding of just what the public are angry about.

[Biscuit]

Im getting fairly fed up of the whole... 'you're just jealous' bull****. There are many people in this world who earn insane amounts of money, many of which more than these bankers and yeah, i think its ludicrous, it frustrates me that such a huge percentage of the worlds actual wealth is in such a small percentage of people. The reality of the situation is that they are there, this is the world and there is very little i can do about it.
Am i jelous of them? Am i hell, I'm perfectly happy where i am with regards to the social/professional hierarchy. That doesn't mean that i lack goals, motivation or aspiration for bigger things, but it also doesn't mean i have no right to get angry and it doesn't mean i have no right to at least make my disapproval known be it via public forum, protest or otherwise.

[Phage]

You actually claify my point. And please be aware that I am not trying to provoke you, or contradict your statements. I'm just not seeing a coherent argument and a solution.
You think it's unfair.
You don't define why.
You don't define 'banker'.
"Someone like Fred Goodwin" - Do actually mean FG or a generalisation ?
"likes of bankers" - generalisation

Now I'm not making a value judgement, and your anger is clear. But who are you specifically angry at ? Why should you 'punish' FG ?

Fairness ? We already know that life isn't fair, and that there are people both better and worse off than us, this is not something new.
Why is inequality inherently unfair ? Why should anyone in the private sector explain themselves to us ? No-one has done anything but rail at a group of people that are ill defined, and probably do not exist in any meaningful way. If we want more from the Private sector you have to either enact new laws, or use market pressure by refusing to deal with them.

Stringing up FG as a figurehead for a hated class won't actually help.

[Phage]

but it also doesn't mean i have no right to get angry and it doesn't mean i have no right to at least make my disapproval known be it via public forum, protest or otherwise.

Who said you don't have those rights ?

[TheAnimus]

Im getting fairly fed up of the whole... 'you're just jealous' bull****.

But what are you proposing to change it?

Are you saying you agree with my stance of high remuneration for these figures is a symptom of a lack of supply, how can we resolve that? (my suggestion encouraging smaller enterprises).

Or do you think we should have some artificial remuneration caps, which is something people have previously mentioned?

[Saracen]

..... Ed Miliband could have (and would have) then said that he was going to force a commons vote that, in all likelihood he would win, to stop the payment, because he was entitled to do that. ....

He's certainly entitled to force a vote. He gets the Opposition day motion and can use it pretty much as he wishes.

Whether he'd have won is much more up for debate. What would the govt whips have done, and who would have defied them? What LibDems feel. by and large, is pretty obvious, but would they risk a government defeat that might split the coalition, over this? I'd have thought it's doubtful that enough would. And unless either quite a few of them vote against, or a load of Tories do, EM simply doesn't have the numbers to win. He can stir the pot, but without a gov't back-bench revolt, can't choose the day's menu.

[Phage]

I would argue that it is exactly this kind of attitude that has helped get us to where we are. The implication that, if you criticise the likes of bankers, then it follows that you are envious is absurd. I don't see the same furore around hospital consultants who, when you take into private work, earn vast sums of money, certainly compared to the average Joe. And I don't remember this furore around Bankers packages in the good times, and that is because at that time it was generally perceived that they were doing their job, and doing it well. What people find hard to stomach is that these sums are being bandied about now for a particular sector that is clearly perceived as having performed terribly, and which has helped to decrease living standards across the country.

The other issue is this. Someone like Fred Goodwin was being paid substantial sums in bonuses whilst overseeing (and contributing to?) a collapse at RBS. He was given a huge pension, and financially at least, doesn’t seem to have suffered much punishment (More uninformed bile perhaps?). The knock on effects from incidents like this are still being felt today; people are wary, given how much money was handed to those that we now accept to have failed, how does the public know it’s not happening again? If the sector wants to keep these bonuses, and doesn’t want to face a public backlash, then they need to explain in terms that’s your average person can understand, just why they have earned it and, in the case of RBS, how that is going to directly benefit the taxpayer long term. Whether they like it or not, public opinion is such, that they need to justify these payments. If indeed, as the likes of Saracen seem to suggest, Hester is doing a good job, I would have thought this would be fairly easy to do.

It has little to do with envy, and everything to do fairness & inequality. To dismiss it as simple jealousy really betrays a lack of understanding of just what the public are angry about.

And to clarify.
You have no idea what my politics or 'attitude' are, and seem to be looking for an adversary. Something I have no wish to imvolved in. However, please be aware I am not dismissing it as simple jealousy, I'm saying that it is the politics of envy, a more complex idea of motivation.

[Saracen]

....

It has little to do with envy, and everything to do fairness & inequality. To dismiss it as simple jealousy really betrays a lack of understanding of just what the public are angry about.

Not entirely. I've seen plenty of TV talking heads, for instance, that categorise it as "unfair", while absolutely failing to address why they concentrate on Hester (who, after all, wasn't responsible for the problems), and not on many other groups and individuals (like what Ross what getting at the Beeb), or addressing who gets to decide what's fair and what isn't.

Someone condemning Hester's pay as 'unfair', while having no idea of what he actually does or how good he is at it, and I'd bet the vast majority of people have no idea of that, seems naive at best, and does very much smack of envy.

I know what the public are angry about. I just think they're directing it at the wrong person .... egged on by politicians that did have a role to play in what went wrong. Hester didn't.

[roachcoach]

Im getting fairly fed up of the whole... 'you're just jealous' bull****. There are many people in this world who earn insane amounts of money

To add to Phage's posts (#80 was award winning imo), the other issue here is that part I've quoted above. No-one has the same definition of 'insane' amount of money. By way of example, this debate here is almost EXACTLY the same debate around the higher rate earners losing child benefit for example, they get 'insane' money too, apparently.

It could easily be summarised by "they earn more than me, that's ridiculous", as I said in my first post in the thread.

Envy/jealously it doesn't matter, call it what you will, but it is rampant right now and regrettably the message is to attack/criticise people who are perceived as 'rich' (with 'rich' ranging from £complainers salary+1 through to infinity) and to suggest that they do not earn it and how very unfair this big bad world is and let's all drag them down because they don't deserve to be where they are.

Of course there will be bad apples in life, of course life isn't fair but the overwhelming vocal tide is stinking of envy/jealously imo. They are not making rational arguments for the most part. Perhaps not everyone feels this way, perhaps they are even a minority, but they are loud.


This isn't just about bankers payments, it's about so much more on a social level.

I remember my parents saying to me: Stick in and pay attention at school and you'll be able to get a good job like <random expensive car driver> we passed. When did we ever stop taking that attitude and start decrying success?

[cptwhite_uk]

Erm ... a public limited company isn't owned the the public. They can just buy shares. Usually, the bulk of the shareholdings are institutions, like pension funds.

And in a private limited company, much the same applies except the shares aren't publicly traded. But they're still owned by shareholders, but they certainly don't have to either expand the company or distribute it to employees.

Employees are just that - they do a job for an agreed remuneration. Owners might seek to incentivise (hate that word) employees with a bonus, based either on personal performance or company results, and that might be in the contract, but it's the exception not the rule for any but very senior staff to be offered shares. And the shareholders, which are usually mostly also directors in private companies) can just pocket the profits and head off to a beach in the sun, or Monte Carlo to blow it on the tables, if they so wish.

Only if it's some kind of mutual, along the lines of John Lewis, are profits distributed to employees.

But that's a pretty good model, actually, and we could do worse than do a lot more of it.

I'm curious where the excess money would go in the case of a private limited company if it's neither:

a) re-invested into the company
b) not given to the shareholders / owners (£250k / yr earning cap)
c) not distributed to the the employees

Revenue and customs? I wasn't suggesting that, but you haven't presented where you see the excess being attributed too.

I didn't state that a public limited company is owned by the public, but buying shares (as they are able too) enables part-ownership and the big pension portfolios you talk about are investing essentially the public's money so the money still ends up with the man in the street through his pension (hence my brief reference to the public). However I will accept the majority of shares are probably owned by a portfolio of investment groups.

[Phage]

This isn't just about bankers payments, it's about so much more on a social level.

This is the really interesting bit. What does this say about us ?
I have some theories that the increasing pay gap satrted with the Thatcher govt and has got worse ever since. It's not about bankers, or FG, or Footballers it's about the society as a whole.

I do believe that the ludicrous house costs (paging Rave), and other aspects of the libertarianism we have seen is that most people have lost any real chance of bettering themselves. Some people still can, obviously. Those with enormous talents and drive, ironically like Hester. But for most, I think that hope was lost. I don't know when, but within the last 10 years, I think the tipping point was reached where more people have lost hope, than have gained it.

How much of this is due to increased competition from globalisation and increased population would be fascinating.

For me, I suspect that I am now too old to continue to work in the City for much longer and will be losing my house within the next two years. However, I believe that this is a result of market forces on my skill set and industry, not the machinations of the select few.

[Biscuit]

Who said you don't have those rights ?

Its not explicitly stated, but by comparing the publics opinion on a situation to a single simple emotion its implied that said opinion is based on factors which have nothing to do with the actual problem and therefore barely relevant or justified.

But what are you proposing to change it?

Are you saying you agree with my stance of high remuneration for these figures is a symptom of a lack of supply, how can we resolve that? (my suggestion encouraging smaller enterprises).

Or do you think we should have some artificial remuneration caps, which is something people have previously mentioned?

Im not sure it is a symptom of lack of supply, i have no idea how i would find that out but i can see why that would be a safe assumption. If there is a lack of supply i suspect that supply to get even thinner in the coming years, after all, who would want to be a banker any more?

I cant pretend to know enough about how it all works to come up with a valid solution to the problem, i just struggle to believe reparation of a broken system can come from continuing to flaunt cash over relatively small progressive successes which are necessaries due to the previous damage that was done. If the issue really is as you said before, to do with a lack of supply then i would say the first step towards increasing that supply would be reparit he public image of what bankers actually do... dont see them too keen on wanting the supply pool to get any bigger though do you?

Personally i don't think either of those above would work.
1. Small enterprises will just end up getting bought out by the bigger ones once they start posing a threat or offering a decent investment opportunity
2. 'bankers'/'financial workers' or however we are labelling these money-working-people and the boards that hold shares and/or have a governing control of them as a collective would just find another way to reward their own elite with vastly inappropriate assets of one form or another.

[opel80uk]

You actually claify my point. And please be aware that I am not trying to provoke you, or contradict your statements. I'm just not seeing a coherent argument and a solution.
You think it's unfair.
You don't define why.
You don't define 'banker'.
"Someone like Fred Goodwin" - Do actually mean FG or a generalisation ?
"likes of bankers" - generalisation

Now I'm not making a value judgement, and your anger is clear. But who are you specifically angry at ? Why should you 'punish' FG ?

Fairness ? We already know that life isn't fair, and that there are people both better and worse off than us, this is not something new.
Why is inequality inherently unfair ? Why should anyone in the private sector explain themselves to us ? No-one has done anything but rail at a group of people that are ill defined, and probably do not exist in any meaningful way. If we want more from the Private sector you have to either enact new laws, or use market pressure by refusing to deal with them.

Stringing up FG as a figurehead for a hated class won't actually help.

Not once in my post did I say it was unfair. I said, to effect, that the public perception is that it is unfair, and at the end of the day, in this case at least, that’s what matters. My own opinion is that, in the case of Hester, if it is proven (and of this I’m yet to be convinced) that he really is performing well and that as a result it will mean RBS will worth more than what the taxpayer paid for it, then he deserves a bonus, but that bonus should be transparent and justified, as he works for a company that is, in effect, State owned. As for the people in the private sector explaining themselves to us, I specifically said if they didn’t want to face (or if they cared about) a public backlash. Perhaps they don’t care what the public thinks about them, in which case they will take their bonuses (as is their right), the public will get angry (as is their right) and that will be that.

I am not angry at all, this is just a by-product of capitalism, and in fact have a degree of sympathy with Hester, as he really is caught up in the middle of something that he played no part in (although I can’t believe that he wouldn’t have known this storm was looming). On the other hand, the reason I used Fred Goodwin is because he is a glaring example of someone who was grossly incompetent (at best!), and I used the fact that he was being paid large bonuses whilst helping to bring RBS to knees as an example of why the public are angry about the awarding of Hester’s bonus. I agree that he is a bit of a pantomime villain but, unfortunately for him, it was his bank that the public bailed out. As for why he should be punished, I think that depends on ones opinion of how negligent one thinks he was.

As for a solution, I have previously said that I would have let the bank(s) fail, for starters.

[Biscuit]

To add to Phage's posts (#80 was award winning imo), the other issue here is that part I've quoted above. No-one has the same definition of 'insane' amount of money. By way of example, this debate here is almost EXACTLY the same debate around the higher rate earners losing child benefit for example, they get 'insane' money too, apparently.

It could easily be summarised by "they earn more than me, that's ridiculous", as I said in my first post in the thread.

Envy/jealously it doesn't matter, call it what you will, but it is rampant right now and regrettably the message is to attack/criticise people who are perceived as 'rich' (with 'rich' ranging from £complainers salary+1 through to infinity) and to suggest that they do not earn it and how very unfair this big bad world is and let's all drag them down because they don't deserve to be where they are.

Of course there will be bad apples in life, of course life isn't fair but the overwhelming vocal tide is stinking of envy/jealously imo. They are not making rational arguments for the most part. Perhaps not everyone feels this way, perhaps they are even a minority, but they are loud.


This isn't just about bankers payments, it's about so much more on a social level.

I remember my parents saying to me: Stick in and pay attention at school and you'll be able to get a good job like <random expensive car driver> we passed. When did we ever stop taking that attitude and start decrying success?

When those people earning all those moniez caused the economy to collapse in on itself , put millions out of work. Your damn right this has a lot more to do on a social level which is exactly why 'your just jealous' doesn't cut the mustard, no matter why synonym is used or however you write it, there is a lot more involved in this than basic envy and i find it insulting and frustrating to see people brush off others opinions based on it.

[Phage]

Its not explicitly stated, but by comparing the publics opinion on a situation to a single simple emotion its implied that said opinion is based on factors which have nothing to do with the actual problem and therefore barely relevant or justified..

In which case I apologise if that was the impression you gained. It's certainly not my intention. I hope my later post on the changes in society leading to a loss of hope clarify what I was referring to with that phrase. Max Weber I think had the gist of it.

"Weber's main intellectual concern was understanding the processes of rationalisation, secularization, and "disenchantment" that he associated with the rise of capitalism and modernity.

Max Weber agrees with the fundamental ideas of Karl Marx about the economy causing class conflict, but claims that class conflict can also stem from prestige and power.[6] Weber argues that classes come from the different property locations. Different locations can largely affect one's class by their education and the people they associate with.[6] He also states that prestige results in different status groupings. This prestige is based upon the social status of one's parents. Prestige is an attributed value and many times cannot be changed. Weber states that power differences led to the formation of political parties.[6] Weber disagrees with Marx about the formation of classes. While Marx believes that groups are similar due to their economic status, Weber argues that classes are largely formed by social status.[6] Weber does not believe that communities are formed by economic standing, but by similar social prestige.[6] Weber does recognize that there is a relationship between social status, social prestige and classes.[6]

" - Wikipedia