RBS board to quit if chancellor vetoes £1.5bn in bonuses

Good

The best part of this is that it's win-win for the UK.

If the Government refuse to pay the bonuses then we get to feel as though we've won a little battle.

If they pay up, however, then Brown is finished.

Bye now. Mind the door on your way out.

It sounds very much like the Directors are still living in the past. In a booming market with low unemployment and demand for bankers outstripping supply undoubtedly they would have to pay high bonuses to retain the best staff. In a downturn- and we are still in one despite the profits being made- the supply of bankers is greater than the demand so if staff were unhappy at their pay rates they would not automatically leave as they could not immediately find better paid work elsewhere.
All this means that the Directors do not have to pay pre-crash level bonuses to look after shareholders interests and therefore would not have to resign.
It sounds like there should be a new board at RBS not the same old one with a different faces

Dear RBS,

We own you.

Tough.

..and the problem is?

Looks like Darling is under so much pressure not just from Sarkozy and his French Commissioner for Finance but even from his own banks.

Stories like this are now becoming so farcical we need to be very cynical or we'd just explode.

You have to wonder whether they are all just taking the **** biscuit.

Splendid. It is just too soon to be awarding bonuses beyond generous pay. Perhaps in 3 or 4 years time if the bank's recovery continues.

Call their bluff - and Mr Clown and Darling - your pigeons r coming home to roost and it could not happen to 2 better people who have shafted the UK.

The RBS board reckon that they would need to resign if the chancellor of the exchequer were to block them from paying the bonuses they regard as essential to maintain the competitiveness of the group.

The competitiveness of the group, exactly what competiton are they in?

Those who can lose the most amount of money in the shortest time competition.

Commercial banks and investment banks.
Merchant banks and retail banks.

Mix them together and you get a right old mess that's inherently unstable and liable to blow up in your face at any time.

Excellent. I will not be crying if they go...

#2 -- perfect !
This is politicking at its worst. Just as Brown today keeps trying to pull the class war stuff with David Cameron's Eton education.
Brown and Darling should always remember that RBS is state owned but they plan to sell it on one day. If it becomes a subsidiary of the BofE rather than a PLC enterprise there is no way that investors would contemplate buying into a bank run by "civil servants".
Brown and Darling would be doing the tax payers of UK a major disservice if they interfere in this manner just to get votes. Let's hope it back fires.

Let them go, I have a friend who works for RBS...just been out to Chicago, I think there was half a dozen or so of them, business class, talk about wasting our money!! have they not heard of video conferencing?

I presume, when they leave, they will not get a payoff

Sounds good to me but we need to look past the initial story.

These are individuals with huge wealth and real power (as opposed to the temporary illusory political power of the incumbent government)

I'm sure the bankers have a plan. I'm not so sure the chancellor does.

Or maybe it's a double bluff to curry favour with the electorate?

The Government, as major shareholder, should stop the payment of bonuses. The RBS board resigns. Some investment bankers leave. This is great! It clears dead wood and makes way for other, aspiring bankers to take their place. We want many, many more investment bankers to saturate the market and bring the price down.

Let the Bank of Scotland board of directors resign without redundancy payments and other benefits. If they feel they can do better financially elsewhere then let them see if that is the case if tday's banking market
The taxpayer has bailed this bank out and a new team of directors is required.
Enough of excesses in this and other banks.

hurray....

Let the parasites go, must be thousands who could perform their role, cheaper and better. The only reason they are in a position to resign is because of the gross amounts leeched previously.

Good. It's about time some of these bankers were punished for their total incompetance and greed. In any other employment, with the possible exception of being an MP, they would have been kicked out of the company. No morals, no ethics just greed. It is a pity legal proceedings for fraud have not been instigated by bank shareholders. In any case the government should have totally nationalised the banks concerned AND stopped all bonus payments.

RBS is insolvent and should be liquidated forthwith.

If it is so vital to pay these bonuses, then delay their payment for five years or longer, and make them conditional on the employee still being with the bank. That would tie these 'top' ?ankers to RBS.
Of course the lack of bonuses this year could be construed as repayment for the undeserved bonuses paid in previous years.

I can understand the need for a bonus pay out; it makes sense to keep the employees loyalty to the company and respect their input; however, given the circumstances the public blames the banks. It is the tax payers money that had saved the banks, they should think to reward the employees at RBS with other incentives such as shares granted to their employees;
LLoyds has done a great job to try and raise capital....
If RBS is making money they should argue to show the reflection of strong balanceshoot on their shares' performance.

As it is nearly Christmas............Let em go, let em go, let em go.

Good, let them walk, but not before we - the taxpayers and owners of the bank take joint legal action against them for financial mismanagement thus ensuring that they can never be directors of a company in this country again.

Overall they go the bank into the mess, cry foul, get money from me (the tax payer, until I had my job taken from me because of the banks) and now want a prize!!!!!!

Then they all go on a point of principle and get jobs elsewhere because of the way they got money from a stone.

If I had written a book with this plot line no one would have believed it and the book would not sold.
Call their bluff, and if you need someone to sit on a board I have time on my hands at the moment......

Instead of a ridiculous reactionary response let's consider this sensibly.

RBS does have a legit problem here. It needs to pay some form of bonus to its staff. The Government can't be seen to authorise the payment of absurd sums of money whilst the public still have their pitchforks out.

So if we could reach a compromise that didn't involve the public getting so worked up about this that would be good.

Perhaps a start would be that the RBS board would forfeit the right to pay themselves a bonus. But I urge you to remember, that not everyone at RBS earns 500k+.

However £1.5 Bil is excessive, absurd, and unreasonable. Perhaps the audacity to even hold such a stubborn position over such an incredibly inflated sum of money could be a sign that it is still a problem of leadership at RBS.

"Including bonuses it would want to pay to retail bankers and to employees in the rest of the group, it would intend to pay £2bn in bonuses for its performance in 2008."

The year where it made a loss of £24 billion?

I thought they were to re-capitalise? And were told to lend more also? Anything in bonuses goes to neither!

I'll make it easy for Darling. They can have the bonus once the tax payer is refunded in full.

Are these the same people that destroyed the RBS by their "profit generating" activities recently?

If so, please ask them for an explanation of this bizarre position they are adopting. Why would want them to stay on, let alone pay them excessively? Of what value to an organisation is a group of employees with such a track record of incompetence?

This comment was removed because the moderators found it broke the house rules. Explain.

It's only another version of "I'll take my millions to a tax-haven if you continue to tax me" that we get from the very rich.
Time to take on these city welfare cases. We've had a quarter century of "The City knows best" and where has it got us?
Zap 'em Darling. Let them resign. Taking your expensive expertise to Dubai, gentlemen??

I take it the alleged profit referred to is before the write downs in Dubai? If the way they have run the bank is anything to go by then I would much rather have an uncompetitive bank.

If they don't like it they know where the door is! Good riddance to bad rubbish I believe is the appropriate phrase.

If any bank is prepared to take on someone with RBS Investment Bank on their cv they need their heads examining.

...on the basis of the profits it has generated so far this year ..

given these are bogus 'profits' in as much as the taxpayer is funding the 'industry' then all these profits should be taxed at least to the same degree they are dependent upon the public for their existence?

there is 1 trillion of taxpayers money just sitting around in banks and they say 'this is profit'.

Out in the real world would any other company even consider awarding bonuses to its employees after destroying so much shareholder value? I suspect any other business in this position would perhaps feel it more appropriate to use this profit to either repair its balance sheet, buy back shares or award a dividend to its long suffering shareholders.

Sideshow

Good to see you back Robert - Stephanomics is bobbins

Post 28 as the bank is not allowed to pay a dividend to shareholders until the bail out money is paid back why should staff get a bonus?

As a shareholder I have had to take some pain why shouldn't the investment bankers?

Bonuses ---- no way,
until we the tax payer have been paid back !!!

Just an afterthought..... think about it, they say they will "loose their top bankers to rivals" - really?? picture the interview scenario -

New Bank: "So Mr X, where have you worked before?"
Banker: "Well I worked on the board for RBS for a few years"
New Bank: "Riiiiiiiight, thank you for your time. We'll call you......Bye"

Definately a win win situation.
There is no way they can justify paying bonuses. The job market for such people is so delicate that many won't leave. And it's not like their standard salaries are that low anyway! They're not on minimum wage are they.
If the board quits then they can bring in a new one, controlled from the start, a board that is not paid millions, does not have exceptionally massive pensions and does what they are told. RBS lost all rights to having a say the day they had to go bowl in hand to the government.

I think to fully understand this story that it would be helpful for RBS to publish the salaries, packages and proposed bonuses of all those investment bankers due to receive these huge bonuses, without revealing their individual names.

After all, we the taxpayers own RBS and have a right to this information.

If after this is done we find that these bankers are on small packages with bonuses forming the majority of their income, then we might be favourably inclined to pay up.

If on the other hand we find that they are already on huge packages (Salary, private medical, expenses, pension, bonus) even before a penny of bonus has been paid, then the public can rightly expect to be furious with the gall of RBS in wanting to pay so much of our money to these people.

The latter scenario is the more likely one, and the Chancellor should veto all bonuses to these people for several years until the debt to the taxpayer has been entirely paid off. They would not be in employment unless it was for the taxpayer.

The £1.5bn that is proposed should be used instead to start paying back some of the enormous debt to the taxpayer.

My concern is however, that being a public servant, the Chancellor will be intrinsically risk averse and worried about legal action and will cave in to these quite undeserving bankers.

Suspect this subject might just generate the most comments in the shortest period of time...

Perhaps "they" should take some notice.

Anyone who has studied even the most basic labor market economics will know that workers must be paid close to their marginal product if there is competition within the market otherwise they will be rewarded elsewhere.

As mentioned above, the bankers in question generated £6billion over the previous year and as the market turns there is certainly demand for investors who can make profits, Baahumbug I believe your comments to be unfounded.

Our (taxpayers) investment is at stake, it is clear that we should let RBS bosses focus on building profit making capacity. Right now they have no incentive to pay unneccessary bonuses. I'm sure the move the reward clear talent and success will be approved by the sensible Mr King.

The "talent" investments bankers have is for betting huge sums of money that they don't actually have in a rising market and then pretending that they have been skillful when they get a short term gain. We saw last year what happens when the market falls. We get to pick up the tab.
They don't deserve bonuses, they deserve to receive the same degree of contempt from our natonal leaders that most of the general public feels.
Osborne comes from their class and will always back them no matter what he says now, Darling is a sell-out on the scale of Ramsey MacDonald: who speaks for us on this matter? Vince Cable seemed to get it right but I don't see his party articulating the real sense of grievance that I, and so many that I speak to, feel. I have paid PAYE all my working life (all 34 years of it)and where is going? To pay for some spiv's Ferrari.

This is not only financially right, it's morally right too.
I reckon that the problems at Lloyds TSB have cost me £8.000 so far and I'm leaving for the Co-op as soon as I can sign the papers.

Robert: After reading your blog I happened to read an "expert comment" on Hargreaves Landsdowns site www.h-l.co.uk/news/expert comment which has some relevance.

It would seem that the government is on the point of injecting a further £25 Billion into RBS thus taking its stake to 85%. If this is correct, how on earth can RBS justify any bonuses to any staff irrespective of contractual arrangements. In the real world the business would be well and truly bust and the staff would not have jobs let alone a bonus. It is clearly indefensible for RBS to spend £1.5 billion of our money on bonuses.

I have no time at all for this government but on this issue they have to stand firm. The stakes are very high for all concerned and the biggest losers will be everyone of us as taxpayers.

Post 40. Hear hear.

I'm no legal expert, but...
How can you be legally "forced" to resign? I would have thought that resignation was, by definition, a voluntary act.

This is a pickle, letting them resign (and losing their supposedly 'best' bankers) would damage the immediate share price and the long term prospects for a company that we all own. We would be cutting our noses off to spite our faces. But allowing them to pay the bous' would be morally outrageous and political suicide.

I say, veto the bonus, let the board resign and face the consequences. Just withdraw the depositor's guarantee from any bank that employs ex-RBS staff who quit as a result. Then watch customers que to withdraw their cash...

Those 6bn profits are of the same "profits" that drove RBS and almost the country to the wall. I am sure we can all do without those "profits" and let the "talent" join other banks, just not on the taxpayer's backs.

Anyone want to employ any of these gentlemen?

https://www.rbs.com/about-rbs/g1/our-board.ashx

No thought not!

I fail to see the problem.

Bonuses are a share of profit generated, right?
All things (bailout) considered they've made horrible losses, so no bonus. If the people who are working there were any good then they wouldn't be in this mess. Let them go.

IT'S THAT SIMPLE.

You say that they feel they would have to resign "because they would be prevented from taking actions they perceive to be in the interests of shareholders".

Given that UKFI (ie HM Treasury) is the majority shareholder, and they are making it explicit what their preference is (and therefore what their interest are), why doesn't the board just do what UKFI says? After all, the Companies Act makes it clear that public companies are to be run solely for the benefit of their shareholders. Why are they resigning? Why don't they just do what their majority shareholder says?!

Firstly, how much of the 6 billion profit is directly from the talent? i.e. how well would the trained monkeys have done over the same period of time?
I'd bet it's no where near 25%.

Secondly, would it really be that easy for the top bankers to get jobs elsewhere? We're only just out of a recession. Surely there's others waiting in the wings who would do the job for half the price.

I seriously doubt that the top talent is actually worth that much to the banks.

How can the taxpayers amongst you be angry at the people who generated £6billion for you this year. It is clear that these people are the cream of the RBS crop. They must be kept to allow us to see a return on our investment.

sosoomii, what personal/moral interest do you have in the collapse of the British economy that you encourage?

We are shareholders. We want them to go. Yes it might cost, but redundancies cost too and they are perceived as longer term benefits. Letting these greedy bankers go is clearly what the majority of shareholders want. Let them go.

Wake up people.....it would have cost the country a lot more money if RBS would have gone under. Either you want RBS to succeed or you dont! Clearly none of you want RBS (or more to the point HM Treasury) to go under so let them run the business with the new management as they see fit! So typical of people in this country to spout off and kick someone when they are down but I dont see any of you coming to the table with a better solution! For the record I dont work for them! Punish the people that allowed the bank to get into that situation, dont punish the people that are busting a gut to get them out!!!!

I am a little confused.

The Board has a legal opinion that not paying the bonuses would be against the shareholders interests. The person who ownes 70% of the shares says he doesn't want the bonuses paid.

It seems to me that the legal opinion isn't worth the paper its written on; the majority shareholder has made his opinion very clear - more wasted money by the Bank's board!

44: you are wrong, those "profits" are cuts for lending billions to everyone who asks, just as they did before they drove their bank to bankruptcy. Then they gambled their own bank's money, and they lost, but now they are gambling our money. Those 6bn are commissions on LOANS that should be repayed in many years. And many of these loans are outside the UK. RBS has the BIGGEST exposure in Dubai, did you know that? Is it not better not to have to worry about it than the promise of some profit which we all know where it leads. Do you have a family? Would you lend your kids' future to Dubai? This is what RBS is doing and this is where the "6bn profits" come from.

Its clear to all we should of put RBS in to administration and then decided what bits the UK tax payer wanted to keep on .Putting RBS on countries balance sheet with our balloning debt will I am afraid by the end of the UK ability to borrow , its only a matter of time.

When you get news that the police will require to make a £500 million pound saving by 2014 ,you realise we are living in La La land and not being informed of the massive cuts and additional tax increases we need to make ASAP (Really 18 months ago).

GB is not helping his core vote in piling on the debt , with ever decreasing tax income , he is simply making the adjustment back to reality that much harder for all , but espicially the poor.

Post 44 which part of RBS do you work for?

One would assume that if the board resigns because of failing to run the company then this can be construed as failing to meet targets. How gratifying to know that they won't get a payout in that case. Please? Someone? Tell me that they are on a contract that will not pay out a huge goodbye just because they walked?
No? Oh well.....

Plan B then... Pay the bonus - but it cannot be drawn down unless the employee completes a further 5 years unbroken service at the bank. And next year, another bonus can follow, tied to a new 5 year term. If they have a catastrophic shambles ensue between now and then well the value of your investment may go down or down quickly Mr Employee. You work it out!

What a good idea. Any man with a back bone would say "enough is enough" NO you cannot have your bonuses, if they leave good, that's fine. I am quite sure we can find other people to run the bank.

Could I suggest the bonuses are paid on a barter basis i.e. shares in some of their superb investments such as Dubai World or maybe in additional RBS shares.

That should encourage them!

Dear Mr Peston, are you not reading the published news? RBS has the biggest exposure to Dubai from all banks. What "profits" are you talking about. After last years' events it is surprising you are so "naive" about banks' profits.

@55. As others have said, the "profits" made by RBS this year are not due to the skill of "the cream of the crop". They are almost solely due to the Bank of England pumping vast amounts of our money into financial markets. The guys who are running RBS just do not seem to understand what has happened over the last 18 months - they have been rescued by the taxpayer. If they truly think that these bonuses are in the best of the shareholders then they should all go.

Hi Id just like to comment about the recession and asks a few question s to Peston. Firstly, I'm fifteen-years of age and i'm interested in economics and have lived my life through the good/great times.

I have decided to comment because I hate the pessimism thats all over the news at the moment and i don't consider it to be fair. An example is the BBC use a terrible picture of Gordon Brown when talking about him(black & white)which I think is a little unfair. Economically, my main example is you cannot compare this recession to those in the 1930's or 1980's or 1990's; the percentages in GDP decreases may be higher than the 90's or 80's but in real terms we are much,much richer (Well most of us).
To support this I would like to ask you how much in terms of percentages and billions we have grown since 1932, since 1980, since 1990. How many more? Why?
This recession has been made worse because of intelligent people analysing every detail, every breakind story.
What the madia should be doing is showing how great are economy still is?
Furthermore, you say we are the only country in the G20 still in recession but they started earlier. France, Germany, USA, Japan and many other countries.
The UK government debt problem- but what are we in relation to comparitive countries. I would like to find out.

Finally, I would like to say thankfully we all havent been affected. My family is actually better off and we will have paid off the morgage in 2012 because the rates have decreased.
Please can you answer them or somebody with a little expertise.

#55 - Its hardly just me, is it?!
If we let the board go the share price will fall. But thats only paper money because we have no chance (or desire) to sell the shares now anyway. I suspect in the fullness of time the share price would recover, and profits would start rolling in again even if the 'cream' left. How hard is it to make money when you borrow it at 0.5 percent an lend it at 8 per cent?

These people only have jobs becasue we bailed them out. If we hadn't, the only bomus they would be getting was a tenner from their aunt at Christmas. RBS owes me, you and everone else an enourmous amount of money. That should be repaid before they start rewarding themselves.

At any rate, the British economy is already doomed for the next decade. Higher tax, less investment. I doubt we'd hardly notice a few more billion being lost. And besdies, I'm confident I an get a job in Australia if needs must, so I don't feel tied to the fortunes of theBritish economy.

The talent will leave! Good. Good. Good.
Walk the plank people - the drop is more than you think, but be my guest...

I saw loads of investment bankers advertise themselves on the Wall Street Journal the other day - most of them have been out of work for months and just can't understand this thing about being overqualified or over-experienced.

And what is this... a warning about playing with fire... from a banker! Did Hampton actually hear himself saying that? Was he listening to himself at all?
The irony of it!

Agree with 28 (Zer_Matty)

The banks has something like 170,000 employees, the majority of whom all work very hard and continue to do so in the face of pubic disgust at "fat cat bankers" I believe the board members who were responsible for the position the bank got into have now all left the bank, so why the clamour for the new board to go?

RBS like most companies has a performance pay system, and from what I read are paying cash bonuses only to those who earn under 39k. Any other bonus is split over 3 years with a clawback term.

I also find it ironic that if RBS becomes sucessful again then the government stand to make a huge fortune which will result more money for public service/ lower taxes. Leave the board to their job which will have the knock on effect of saving Brown (or probally now Cameron) and co's asses

I wonder how many people would opt for a higher tax bill on the principal its not been paid for by the banks?

For while banking pay has been increasing over the last decade or two to ridiculous levels, we've heard it til we're blue in the face that "a successful company has to pay the market rate".
And indeed it does.

But it is quite clear that the market for banking jobs is now be plummeting, and just as pay rates have been going up in a boom, they should now be coming down big-time in the bust.

But this is not happening at the moment due to:
- massive shareholder support of RBS from the govt, and the distortions that government interference has produced in the labour market (i.e. all RBS employees should by rights be presently out of work)
- the QE programme that is helping everyone and very certainly the merchant banks, incl the RBS one
- the greed and self-interest of all the bankers (and I include in this the FSA guys whose next jobs will be with a bank) who are trying to con us that there are millions of jobs out there that they could apply for.

The government, as possibly the largest employer now in the financial services industry (....... um, could you check that statistic Robert?), has an obligation to lead here, and to take advantage of this at RBS. So it should definitely reduce bonuses quite dramatically - let's say to about a third of last years total, making about £300m.

This would probably be a level where it's only a few precious prima donnas that think they are so wonderful that they decide to leave (and no doubt regret the fact very soon after).

Quite apart from playing well politically with voters generally, such government action would set a great precedent for the rest of the industry. Other banks would indeed be very grateful for this and they would start cutting pay too. It would also have the effect, by lowering labour rates (compared to earnings levels), of helping all banks rebuild capital ratios quicker.

In other words, Darling..... do it.

56. Dont quit your day job! How about a job swap with Stephen Hester??
Sure you'd do his job for £30k a year....or would you refuse the multi-million pound contract....hmmm me thinks not!

59. If you're that bitter about it stop using all banks all together and then lets see how good your life is then!

My point is you are all getting excited at a web page, the hatred for the banking system is incredible and as I mentioned in pt 57 perhaps you need to STOP MOANING about the problems and start offering up some solutions.

The question is, if they all resign, what pay offs do they get and what happens to their obscene pension rights? I assume they're obscene, they're high flying bankers after all, can't imagine they haven't feathered their nests a la Sir Fred Goodwin.

#28 Zer_Matty

No employer needs to pay a bonus. We have unemployment going on, salaries should be going down, or isn't this a free market responding to supply surplus anymore?

Imagine the flannel on the CVs and at interviews? Very short interviews if at all.

my vote is to sack the lot of them and nationalise the bank formally.

This media run generation of politicians are getting involved in an open market for talent, and the country’s economy could well pay very dearly for this meddling.
A simple analogy is, if the debate moved to cap premier league footballers astronomic wages, I think it is pretty obvious what would happen at the opening of every subsequent transfer window, the exodus would be immense, quality would suffer, and no-one would actually benefit.
The contribution the city makes was, and is, the economic lifeblood of the nation. Britain is currently competing strongly across a whole range of economic indicators for the position of worst performer. It stands second only to the USA in its traded goods imbalance, which for the UK was a huge negative $128Bn in September – without the contribution of traded services to mitigate this poor performance, the lions share which comes from the city, we would be in much more trouble than we are already.
Bankers bonuses may not be palatable to the media, and the public and politicians they influence, however it will be bankers that will help get the country back out of the mess (which they admittedly helped to create). I really can’t see the media or indeed politicians creating the kind of wealth that will be required to balance the books.

Robert

I wonder how much if any of this intiative is coming from the EU?

I believe that 'Goondog Trillionaire' did not save the world - he was told to save the world by Germany/France/EU and to make sure that Brown's toxicomics did not spread any further.

also, your quote:

'I also find it ironic that if RBS becomes sucessful again then the government stand to make a huge fortune which will result more money for public service/ lower taxes. Leave the board to their job which will have the knock on effect of saving Brown (or probally now Cameron) and co's asses'

Well! It's about time that some of the senior bankers started to 'get it' - funny how a bit more gets done as we get closer to the general election?

67 we are not richer we have just created a lot more credit. £1 had far more purchasing power in 1930 than now.

That is the trick of the fiat currency inflationists.

A bad picture of Gordo? That is because Cameron is already being crowned by the media.

59: You have no idea where the £6billion profit comes from, RBS management does, it knows about the situation in Dubai and will have scheduled bonuses accordingly.

Harry (57) has got it spot on, we must allow RBS to progress under new management.

People who talk of the desires of the 'majoyity shareholder' are missing a huge point:
The government is currently concerned with popularity, not best economic management. Mr Darling is preoccupied with with the majority who do not know how to manage an investment bank.

I do not work for RBS, but I do understand economics and the facts of the labor market and management.

It appears that investment bankers as a group are overpaid when you look at the percentage of company profits that they are paid as a bonus.
Senior bankers (who themselves may have been investment bankers) state that they believe that talented investment bankers will leave if they reduce bonus payouts and they may be correct.
But by all banks failing to take the first step and reduce bonus payments these overpayments will continue.
RBS should have the courage to reduce bonus payments dramatically and look for more profitabile investments rather than just going for volume.
As has been said before "Turnover is vanity, Profit is sanity"

As a businessman I understand the need to keep good people and one of the ways in which this has traditionally been done is with bonuses.

However, in RBS's case we should seriously question the wisdom of allowing directors to remain when they have, as employees of an essentially privately-owned company, acted with such self-interest.

Perhaps now, with three quarters of the bank on public ownership, is the best time for change. Current directors have no grasp of what has changed in terms of their responsibilities to the public in light of recent bail-outs. Let them go if they want to.

We need to see someone with fresh attitudes towards the financial sector and a greater sense of public responsibility at the helm. But who? Aren't they all the same? They're drawn to banking by the big bonuses and potential big wins, with less thought for the downsides. If these bonuses are paid out, this attitude will only worsen. After all, it's only public money they'll be risking. And doesn't local and national government waste enough of that already?

So what's the solution. If they stay their bonuses should be held over until such time that they have shown a sustained ability to generate bigger profits. If they go we should seek out other industry leaders and entrepreneurs who have proven themselves to be ethical. People like Richard Branson (shame the Northern Rock deal was sabotaged...)

In the meantime, give bonuses to those lower down the in the ranks who have surely worked harder and suffered more than the bigwigs at the top.

If the investment bank is so profitable, surely the solution is for RBS to sell it. The shareholders (us) get the full value, the directors don't have to worry about the bonuses, and the government isn't involved in running an investment bank.

Paying out 25% of the generated 'profit' is a little excessive for any business.
I am sure these self same bankers would take a highly critical line with any board of a company they have significant investments/loans in which proposed to pay out 25% of the net profit to it's employees. Employees are paid to make profit for those providing the capital to the company.

Performance needs to be rewarded, so perhaps RBS should be prepared to set a more reasonable figure for the % of profit to be paid out to employees based on the levels they would find acceptable at companies they invest in reflecting the reality of share ownership.

Only fair to do others as you would be done by yourself.

I can't however have any sympathy for the Chancellor - he is damned both ways and avoided the option to let Sir Philip take the flak and his opportunity to tut tut but stand at arms length behind UKFIL.

Pay out agreed - the papers will savage him
Pay out vetoed - the market will savage him first and the papers will savage him afterwards for the damage the market did on the basis it was his fault.

both ways he loses and the only upside for him is approx 5 minutes positive press from vetoing.

Expect a fudge with most of the 1.5 billion paid out but in a way that gives an appearance of linkage to longer term performance of the business - 50/50 cash and deffered share options.

As presumably the bank paid for the legal opinion perhaps the board would be good enough to let the shareholders see it - i.e. publish it n full. Sure suitably qualified shareholders will be most interested to see whether they agree with it.

I think the music is a Souza march, but the words are "Cheerio! Cheerio! Cheerio!"

As with all other comments here, please show them the door. More deeply however, no-one in the media seems to have made the obvious comment that if these people are so good, why did such a disaster occur? Incompetence, negligence and self-serving greed perhaps? Could anyone else do a worse job? Don't think so.
So should the need arise, I will happily offer my services to work on the RBS board for 1/10th of the salary of the current incumbents, without any bonus, and will absolutely guarantee to do the job as well or better (or your money back). So you won't be taking any risks Darling

Let them go; who the hell cares.

Possibly too sensible for Banks - if a division of their Bank is making billions in profit and they can afford to ring fence millions for fat cats why not insist that until a percentage of their debt is repaid the money from this is taken out of the profitable division to service their debt and a small gift of say shares is handed over. There wont be a massive walkout where on earth are all these supposed 'stars' going? Northern Rock HBOS where?????

Let's see if Darling has got what it takes to face them down. Profit this year should be set against losses from previous years. Or alternatively, if this years's profits are real ones, in five years' time the bank can pay out the bonuses once there's proof that they were responsibly earned.

To 67. At 4:53pm on 02 Dec 2009, Alex Stevenson

On the internet there is video by Paul Grignon called Money as Debt.

This is a good place to start. I recommend it.

Why do we keep having Americans telling us how we should be handling our economy? Mr Ralphy is presumably one unless his spell checker is incorrectly set. The financial pundit on R4 Today this morning was an American also telling us what to do. Didn't this crisis start over there?

I register my intention re May 2010 General Election....Do NOT pay these bonuses....I certainly am prepared for any resulting consequences....

Post 79 you wouldn't be an American would you? Over here we spell labour with a u not ending in or.

That is why we have a government run by the Labour Party.

I take that if you don't work for RBS then you work for Citicorp or maybe AIG or one of the many other American banks rescued by TARP?

is not possible to reward the bank employees with stock options?

My letter to my MP

Dear Sarah McCarthy-Fry,

Please can you walk along the corridor of HM Treasury to Mr Darling's office and ask him to write to the Chairman of RBS accepting the Board of Directors resignation as there won't be any bonus this year.

He needs to make it clear that as they have volunarily decided to resign from their office then of course there will be no compensation.

Thank you

You just have to laugh: what a ridiculous state to get yourself into. The bankers think they know about finance and the government think they know about politics: then this happens! What a bunch of pathetic incompetents!

In the old days you did your job and got paid for doing it. Nowadays everyone seems to have to have a bonus. It is called an incentive but really it is just another way of cheapening labour without losing control of it. It is nothing more than a cynical trick: part of the target culture which has done more than anything else to destroy professionalism at all levels of our society. It also means that betimes I have to be rude to a bank employee who has been incentivised to push their rubbish offers at me. I always reply `Give me more interest on my account'. They then look sheepishly down on the floor as they know they can't and I know they can't, but it is what I want from the bank! I don't want to have to be like that but it is the bonuses which make me do it! Whatever happened to boring banking?

This country is going to hell in a hand-cart as soon we won't be able to afford the petrol! It never had to end like this so why is it? The place is run by fools! It is not just the emperor who has no clothes, his entire court are running about naked. The sight is disgusting!

Given that the UK taxpayer owns RBS we should be encouraging any actions which maximise the value of that ownership. I'm afraid that allowing the Board and top talent to leave would only damage that value. Therefore, unpalatable though it may be, it is in taxpayers' best interests to see sufficient bonus payments made in order to retain the most important members of staff so that RBS can resolve its problems asap and be sold back into private ownership, hopefully at a profit...

Well i agree with paying the investment bankers £1.5bn, provided of course there is a 98% tax, deducted at source on all bonuses over £2,000

surely anybody talented has already gone.

If Hester wants to give up his £9.6m per annum job out of principle then good on him.

How deluded are these guys to think that their jobs are anything other than straight forward

I know little of Statutory accounts for banks but can someone tell me how much of that profit is based on higher asset valuations? i.e what in my game we used to call 'unrealised profits' and where the assets stayed on the books at cost value until sold.

I can imagine the bleating going behind closed doors:
Pay them their bonuses Darling! Fairs fair old bean! Can't mess around with the old boys club. It just isn't cricket.

What's the point in going to all that effort learning all the funny handshakes if Brown and boys can't play by the rules.

A chap's got bloody big mansion payments to make and all that.






Makes my heart bleed.



Let. Them. Eat. Cake.

Sorry for my spelling mistake.

I am not an American, nor a banker. But clearly I am in a minority that has common sense and good economic judgement.