RBS CEO Bonus
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chipmunk
Established Member
The point I'd make would be the salary multipliers involved here.
I have no problem with a self-made entrepreneur earning a large income but these guys are salaried and have very little at stake if the business they are responsible for, fail.
The minimum wage is currently 6.08 and so for someone working 52 weeks a year and 40 hour weeks that's £12646.
David Cameron is entitled to £194k (but choses to take only £142) which is 15.3x minimum salary.
This guy has a salary of 1.2M and has just received a bonus of 1M.
My point would be that 183x the minimum salary is unjustifiable, no matter who you are and what you do as a salaried person.
It seems that the logic applied is that bankers deal with large sums of money and therefore they are entitled to a cut of that money.
Well does that logic apply to Securicor drivers who carry lots of money? - I think not :wink:
Jon
I have no problem with a self-made entrepreneur earning a large income but these guys are salaried and have very little at stake if the business they are responsible for, fail.
The minimum wage is currently 6.08 and so for someone working 52 weeks a year and 40 hour weeks that's £12646.
David Cameron is entitled to £194k (but choses to take only £142) which is 15.3x minimum salary.
This guy has a salary of 1.2M and has just received a bonus of 1M.
My point would be that 183x the minimum salary is unjustifiable, no matter who you are and what you do as a salaried person.
It seems that the logic applied is that bankers deal with large sums of money and therefore they are entitled to a cut of that money.
Well does that logic apply to Securicor drivers who carry lots of money? - I think not :wink:
Jon
chipmunk
Established Member
Roy, according to the BBC, Stephen Hester, the CEO, receives 1.2M salary...
http://www.bbc.co.uk/news/business-16759963
and his bonus was a smidge under 1M. Those were my figures.
Jon
http://www.bbc.co.uk/news/business-16759963
and his bonus was a smidge under 1M. Those were my figures.
Jon
Doesn't surprise me Jon, in reality it's probably 30 bob! Sky were also quoting that the bonus was 12mil shares at 20p, which is what, £2.4 mil? :roll:
Would seem that maths isn't their strong point.
Roy.
Would seem that maths isn't their strong point.
Roy.
RogerS
Established Member
A contract is a contract.
If ratios are wrong then they need to apply across all companies and all countries.
Wayne Rooney is grossly overpaid.
If ratios are wrong then they need to apply across all companies and all countries.
Wayne Rooney is grossly overpaid.
chipmunk
Established Member
I agree that it's not possible to penalize just one person.
But it's just occurred to me that Stephen Hester is also paid 11x the salary Cameron is entitled to this year.
...and last year he received a bonus of 6.4M on top of his base salary of 1.2M making that multiplier 39x the PM.
Can anyone really justify these figures?
It's interesting to note that Mervyn King's salary is much more modest - a mere £400k :wink:
Jon
But it's just occurred to me that Stephen Hester is also paid 11x the salary Cameron is entitled to this year.
...and last year he received a bonus of 6.4M on top of his base salary of 1.2M making that multiplier 39x the PM.
Can anyone really justify these figures?
It's interesting to note that Mervyn King's salary is much more modest - a mere £400k :wink:
Jon
RogerS
Established Member
MIGNAL":1z78tvf4 said:
What..for Wayne Rooney?
chipmunk
Established Member
I'm not sure that sour grapes comes into it, or envy for that matter.
I think sports stars probably are overpaid but they have relatively short careers by comparison to many of these highly paid execs. Many of the execs also have very generous pensions too.
My objection is on grounds of logic and worth.
How can one person be "worth" 200 others? I'd argue that they can't be.
Jon
I think sports stars probably are overpaid but they have relatively short careers by comparison to many of these highly paid execs. Many of the execs also have very generous pensions too.
My objection is on grounds of logic and worth.
How can one person be "worth" 200 others? I'd argue that they can't be.
Jon
RogerS
Established Member
chipmunk":26wl150a said:
So what would you say was the number and why?
RogerS":1be9uquy said:
I guess it's all down to what you think is 'fair' or at least is in some sensible proportion to the average wage. The Prime Ministers wage is considerably less than Rooney's or the RBS CEO, despite that position having a huge amount of stress and responsibility - Thatcher and Blair sent people to war. Someone, somewhere decided that position was worth £194K. How you calculate that worth is hardly down to science, just as calculating the true worth of a Nurse is impossible.
Obviously Roger you have deemed that Mr. Rooney is not worth his £250K per week, otherwise you would not have made the 'grossly overpaid' comment.
How 'grossly overpaid' is he, and why?
RogerS
Established Member
MIGNAL":congu9gv said:
Judging by his performance I'd say about 250,000x overpaid.
chipmunk
Established Member
Nothing like being put on the spot! :wink:
It's a tough question to answer but if I make a couple of assumptions.
In a hierarchical organization perhaps we could put a reasonable upper limit on the number of levels of say 8 between minimum wage and the top.
And if we then suggest that a supervisor should have no more than twice the salary of the level below then we end up with a maximum of 2^7 = 128x but even this is on the high side.
If we assume say 50% extra this leads to 1.5^7 = 17x.
Working from the other direction, my limit would be say 50x which leads to 50^(1/7) = 1.75 or 75% extra salary at the next level. This would lead to a cap of 50 * 12.6k = £630k.
The problem with basing this on thelowest salary in an organization is that there will almost certainly be sub-contracted cleaners outside the organizations direct payroll who can be discounted. So, it should be based upon minimum wage IMHO.
Jon
It's a tough question to answer but if I make a couple of assumptions.
In a hierarchical organization perhaps we could put a reasonable upper limit on the number of levels of say 8 between minimum wage and the top.
And if we then suggest that a supervisor should have no more than twice the salary of the level below then we end up with a maximum of 2^7 = 128x but even this is on the high side.
If we assume say 50% extra this leads to 1.5^7 = 17x.
Working from the other direction, my limit would be say 50x which leads to 50^(1/7) = 1.75 or 75% extra salary at the next level. This would lead to a cap of 50 * 12.6k = £630k.
The problem with basing this on thelowest salary in an organization is that there will almost certainly be sub-contracted cleaners outside the organizations direct payroll who can be discounted. So, it should be based upon minimum wage IMHO.
Jon
My experience on this front leads me to the conclusion that salaries are not actually gauged to 'worth.'
If Rooney is on 12 Mil/annum, then based on the sort of cock ups that each can make, Hester is grossly underpaid!
Usually what happens is that people form a judgement as to their own 'worth' to a given organisation, then they see someone, who in their opinion is not 'worth' as much, receive a pay rise, they want one. Nothing to do with whether they need any extra, simply proof as to their own value.
Neither Rooney nor Hester are likely to live long enough to spend their money, if the top wack in their chosen professions was £100000/annum they would accept it, till the goal keeper got a rise or Hester's secretary got a rise, then they would want to maintain the differential.
Most Prime Ministers would probably do the job for free!
Roy.
If Rooney is on 12 Mil/annum, then based on the sort of cock ups that each can make, Hester is grossly underpaid!
Usually what happens is that people form a judgement as to their own 'worth' to a given organisation, then they see someone, who in their opinion is not 'worth' as much, receive a pay rise, they want one. Nothing to do with whether they need any extra, simply proof as to their own value.
Neither Rooney nor Hester are likely to live long enough to spend their money, if the top wack in their chosen professions was £100000/annum they would accept it, till the goal keeper got a rise or Hester's secretary got a rise, then they would want to maintain the differential.
Most Prime Ministers would probably do the job for free!
Roy.
chipmunk
Established Member
Roy,
I fear you are right but sometimes there is a need for a "reality check" especially when we're talking about a publically owned company.
As I see it the problem is the "Remuneraion Committee" culture where company boards pay themselves and their cronies unjustifiable salaries and rises whilst pretending their decisions are independent. I'm not sure who they think they are kidding?
Shareholders should have the final say IMHO and should be able to veto these salary rises - this is perhaps one of the few government proposals I agree with.
Jon
I fear you are right but sometimes there is a need for a "reality check" especially when we're talking about a publically owned company.
As I see it the problem is the "Remuneraion Committee" culture where company boards pay themselves and their cronies unjustifiable salaries and rises whilst pretending their decisions are independent. I'm not sure who they think they are kidding?
Shareholders should have the final say IMHO and should be able to veto these salary rises - this is perhaps one of the few government proposals I agree with.
Jon
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