Bank Bonus to run into Billions

[Sapphire]

Is there nothing that can be done to stop this ? There's people struggling big time because of these numpties, its totally disgusting.

BBC News - Bank bonuses

[leclerc]

Re: Bank Bonus to run into Billions

Barclays | UK Uncut

There is a demo in Tunbridge Wells, Kent this Saturday.....

[leclerc]

Re: Bank Bonus to run into Billions

Exclusive: RBS Weighs Up £2m Bonus For Hester


Exclusive: RBS Weighs Up £2m Bonus For Hester


Mark Kleinman February 02, 2011 6:22 PM

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The Royal Bank of Scotland (RBS) is weighing up awarding Stephen Hester, its chief executive, a bonus of about £2m for last year, I have learned.
The taxpayer-backed bank is in talks with UK Financial Investments (UKFI), which manages the Government’s shareholding in RBS, and other shareholders about the proposed payment.
A final decision about Hester’s bonus, which will be paid entirely in deferred shares, will not be made until shortly before RBS reports its annual results on February 24.
City sources familiar with the deliberations told me this evening that Hester’s payout was likely to be in a range between £1.8m and £2.2m.
The figure of about £2m is not yet set in stone because it has not yet passed through the political filter of, say, a personal request (should one be made) by the Prime Minister or Chancellor to the RBS boss to exercise additional restraint in terms of his pay. Last year, he waived his £1.6m bonus.
Another important factor in the ultimate settlement of Hester’s bonus for 2010 will be the broader question of whether the banking industry is able to reach an agreement with ministers about boosting business lending and more transparent pay disclosure.
A failure of the so-called Project Merlin would be likely to result in greater pressure being applied by the Government to the boards of the taxpayer-backed banks – namely RBS and Lloyds Banking Group.
Under that scenario, Hester would almost certainly receive a lower bonus than that (or at the bottom end of the range) presently being discussed.
RBS is planning to pay just over £1bn in bonuses across its investment banking business for last year, a figure which has also not yet been agreed with the bank’s largest shareholder.
Had Hester been a member of the old guard who brought RBS to the brink of collapse, then a bonus in the region of £2m (or indeed any sum) would rightly have been seen as outrageous.
That isn’t the case, however. Hester gave up a well-paid (and much less high-profile) job as the chief executive of British Land, the property company, to join the Edinburgh-based bank at the request of the previous Government.
And according to the bank’s past pronouncements, he can receive the vast majority of his pay package only if he salvages a substantial amount of value for the British taxpayer.
The terms of Hester’s contract say that he is eligible for an annual bonus of about £2.4m, or twice his base salary. In an “exceptional year” he can be awarded 250 per cent of his salary, or £3m, as a bonus.
Before anyone accuses me of siding with RBS, it’s only fair to point out that the bank’s proposals for paying its chief executive – as already discussed with major shareholders – go beyond the requirements of the City regulator, the Financial Services Authority.
As I revealed at the weekend, Penny Hughes, who chairs RBS’s boardroom remuneration committee, has devised a new scheme for paying Hester that will mean that he will never receive an up-front cash bonus during his career at the bank.
Many of RBS’s largest City investors have been urging Hughes to award Hester a substantial bonus for 2010 because of his importance to the successful revival of the bank.
The ‘share bank’ proposal has, I am told, been generally well-received by investors, although it has yet to be rubber-stamped by UKFI.
Shareholders have also been briefed on the RBS board’s decision-making process in relation to bonuses for Hester and other senior executives.
The bank has privately poured cold water on a newspaper report last month that Hester would receive his full bonus entitlement of £2.4m. A £1m figure reported at the weekend also seems to have been wide of the mark.
It would be surprising if George Osborne, the Chancellor, did not also have a say in the outcome of these negotiations. In other words, according to someone close to the situation, "any outcome is still possible".
RBS and UKFI refused to comment tonight.


Exclusive: RBS Weighs Up £2m Bonus For Hester | royal_bank_of_scotland | stephen_hester | uk_financial_investments | Kleinman | Sky News Blogs

[leclerc]

Re: Bank Bonus to run into Billions

RBS 'should be bonuses back-marker'
(UKPA) – 2 hours ago
The Royal Bank of Scotland should be a "back-marker and not a market leader" when it comes to handing out bonuses, the Scottish Secretary said.
Michael Moore told MPs bankers should have to make "adjustments" with other members of the public as the country comes of out recession.
He said: "As the predominant shareholder in RBS, the Government expects the bank to be a back-marker and not a market leader on bonuses.
"People across the country are having to make adjustments as we come out of recession and repair our public finances. Everyone expects bankers to be part of this process."
Mr Moore's comments came after a question from Labour's Anas Sarwar, who represents Glasgow Central, about bankers at RBS receiving large bonuses.
Mr Sarwar added: "Given the FSA report found that there were 1.1 million complaints by RBS customers in one year and more than 50% of those were shown to have been dealt with inappropriately, do you think it's appropriate for RBS executives to receive large bonuses this year and if not what are you going to do to deal with it?"
Mr Moore said the agreement to pay bonuses at market rates was agreed with the Labour Government when it took control of RBS during the banking crisis. It currently owns 70% of the bank.
The Secretary of State added: "We want to see bonuses lower this year than last year, that's absolutely clear cut."
Copyright © 2011 The Press Association. All rights reserved.



The Press Association: RBS

[leclerc]

Re: Bank Bonus to run into Billions

Leclerc,
Moore Capital is not a bank but a hedge fund. Their bonuses are irrelevant, imho to the discussion of bank bonuses.

I loosely use the term Banking, it is a collective within the Financial Industry, one begets the other.....the bar is set in one area and raised in another.....Globalisation is with us permanently and even exists within Banking!, why do you think the toxic CDV's were sold and hedged against which affected all 'Banks' as we know them resulting in the bail outs....

There is no action that does not bring a reaction, the ripple effect goes all the way down to the poor individuals that experience the might of the 'Banks' requiring their pound of flesh at all costs and with the might of the Law that is there to protect them.....

As my Son said to me recently...no one made the people take out the loans and get so far into debt.......that is correct and they have to take their responsibilities from their actions, but when there is an irresponsible lending policy from the Banks, fuelled by a bonus/commission system to reach 'targets' (another word I hate) then corruption will exist ie self certification, backed by broker/surveyor et al. which puts 'vulnerable' people into a firing line they are certainly not aware of the consequences of....I would therefore ALWAYS put the onus onto the lending party (Banks) they know whether the person is able to pay it back.....I would suggest their own requirement (not the Bank) to meet targets to pay themselves increased bonus' create the problem.....
In retail banking I would agree. I know advisors would have looked at increasing the "new borrowing" ie excluding same bank loan you would increase the amount plus a little "spending money" to lift the threshold over an amount that increases the points you get towards the branch target. In fact, the "lies" told then are most certainly in effect now with packaged accounts. The loan "lies/mistruths" have gone to be replaced by accounts you pay for. In life there are always targets, ie target weight when dieting, targets of what you have to do in a day/week/month/year. I wish I knew why such bonuses started out historically but they are here to stay.


I appreciate you have worked in the Banking Industry (Natwest) however, not everyone in that industry is scrupulously clean......

I most certainly was never scrupulously clean whatsoever, but thankfully I wasn't in the same league as others(albeit I knew the tricks of how to ).

[pallaz1851]

Re: Bank Bonus to run into Billions

Leclerc,
Moore Capital is not a bank but a hedge fund. Their bonuses are irrelevant, imho to the discussion of bank bonuses.

I loosely use the term Banking, it is a collective within the Financial Industry, one begets the other.....the bar is set in one area and raised in another.....Globalisation is with us permanently and even exists within Banking!, why do you think the toxic CDV's were sold and hedged against which affected all 'Banks' as we know them resulting in the bail outs....

There is no action that does not bring a reaction, the ripple effect goes all the way down to the poor individuals that experience the might of the 'Banks' requiring their pound of flesh at all costs and with the might of the Law that is there to protect them.....

As my Son said to me recently...no one made the people take out the loans and get so far into debt.......that is correct and they have to take their responsibilities from their actions, but when there is an irresponsible lending policy from the Banks, fuelled by a bonus/commission system to reach 'targets' (another word I hate) then corruption will exist ie self certification, backed by broker/surveyor et al. which puts 'vulnerable' people into a firing line they are certainly not aware of the consequences of....I would therefore ALWAYS put the onus onto the lending party (Banks) they know whether the person is able to pay it back.....I would suggest their own requirement (not the Bank) to meet targets to pay themselves increased bonus' create the problem.....

I appreciate you have worked in the Banking Industry (Natwest) however, not everyone in that industry is scrupulously clean......

[EXC]

Re: Bank Bonus to run into Billions

What does not paying bonuses at all to staff for making their business more profitable do to staff who are helping increase that profitability against targets set?

You've lost me.

[leclerc]

Re: Bank Bonus to run into Billions

The bonus is for exceeding targets and not for just hitting them. You cannot pay a bonus for not hitting a target within the area of banking that you work within because is plain silly.

Ooops :o

[enaid]

Re: Bank Bonus to run into Billions

The bonus is for exceeding targets and not for just hitting them. You cannot pay a bonus for not hitting a bonus within the area of banking that you work within because is plain silly.

parlez vous francais ? pmsl

[leclerc]

Re: Bank Bonus to run into Billions

The bonus is for exceeding targets and not for just hitting them. You cannot pay a bonus for not hitting a bonus within the area of banking that you work within because is plain silly.

[enaid]

Re: Bank Bonus to run into Billions

When I get my head around the fact staff are paid a bonus on reaching certain targets, these targets probably set on the very stuff being mis sold to us poor folk.
Then when I get my head around the fact that the top cats no matter how big a bollock they drop can hold their heads up after taking fom us not once but twice(the first time when they used our money and blew it, the second when we bailed them out for doing so), then I may comment on this thread.
Enaid x

[leclerc]

Re: Bank Bonus to run into Billions

Bonuses in themselves don't increase profitability - they reduce it.

What does not paying bonuses at all to staff for making their business more profitable do to staff who are helping increase that profitability against targets set?

[EXC]

Re: Bank Bonus to run into Billions

Saffy, we are shareholders in the banks so the more profit they make and hopefully the share price increase will make us money. Currently and I am using RBS Group as my base because I know their share price pretty well and the price that we as taxpayers bought shares at, we are making a loss. In fact, we bought at 66p per share and even analysts believe that the true price of the shares at best should be 50p per share. Whilst casino banking should be more regulated, we have to give incentives for performance. Banks DO NOT give Christmas bonuses whatsoever and never have done so. They used to subsidise Christmas parties but they stopped doing this a few years ago.

Bonuses in themselves don't increase profitability - they reduce it.

[leclerc]

Re: Bank Bonus to run into Billions

Moore Capital is not a bank but a hedge fund. Their bonuses are irrelevant, imho to the discussion of bank bonuses.

[pallaz1851]

Re: Bank Bonus to run into Billions

Just to clarify, I apologise to Leclerc in stating that it was 'last year', my exhuberance overran my brain in the timings of my inhouse mental library.

2008 - what a year that was - remember the collapse of Banking....who knows what went before.....
See below for item saved...

Remember when the UK imposed a 50% bonus tax at the beginning of this year?
Courtney Comstock |Jul. 30, 2010, 2:52 PM|
When the UK announced a 50% bonus tax, Alan Howard almost immediately opened an office to allow many of his hedge fund's, Brevan Howard's, employees to move out of London to Switzerland.
Now Moore Capital is also opening a new office outside of London, mostly so that traders who don't want their bonuses cut in half can leave if they want to.
The firm confirmed to Bloomberg that two of their traders are leaving, one of whom is a really big deal for London to lose.
Jean- Philippe Blochet, a senior partner at the firm. The other is Kornelius Klobucar, a portfolio manager. Both traders leaving London just cost the city millions of pounds in taxes.
London will have to add those numbers to the growing amount that high paid individuals are costing the city as they leave for places with lower taxes.
Take the massive exodus of Brevan Howard employees for example.
When the tax went into effect on April 6th requiring anyone earning more than 150,000 pounds to pay 50%, it was almost funny how quickly Alan Howard, whose fund manages more than £30 billion, personally left London for Switzerland.
He filed his departure as soon as June.
The Brevan Howard Geneva office alone can apparently house about 40 employees. So let's say that, on average, each of those employees earns £10 million (Howard alone earns at least £300 million per year (2% of £30 billion is £600 million), so that's a fair if not very conservative estimate
(another example: Moore Capital star trader, Kaveh Alamouti, 52, took home between £50 million and £75 million in 2008, according to This is Money).
Fifty percent of ten million dollars forty times over (40 employees) is £200 million, plus Howard's ~minimum £150 million per year. That's £350 million, at least.
Now add £50 million for each of the Moore Capital traders now leaving London, assuming both make ~£50 million each.
It hasn't even been six months since the tax was in place and the city of London alone has lost well over £400 million.

Amazing amount of money over and above salary, whichever way you look at it.....