RBS CEO Bonus

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What i find puzzling is if the gets 1 m wage and 1m bonus ,which gets paid even if the bank goes under.
Why not just pay him 2 m the first place?


The really big companys are pushing the public's limits, and they and the goverment know they are!
 
He didn't get it as of right, he, and the bank, had to achieve certain targets.

Roy.
 
It has always been my understanding that someone's worth is decided by the forces of the market place. If you take the Wayne Rooney issue do you not think he would be paid a fraction of his wage if his employers could get away with it, of course not he would not play for M.U.. The football is a business MU need to be in the top 4 and to play in Europe, therefore they need to attract top players, and top players attract silly money, simple. (I believe that it will not be long before the bottom drops out of the football market, but it will jhave to be a world wide down turn) Same applies to CEO's forces in the market place, whether it is obscene or not is not a consideration. Of course some organisations make the wrong call and pay someone a fortune and they fail to deliver, that's life. What is the point of a contract if it is meaningless .
 
All of the politicians know that meddling in the affairs of RBS is having a detrimental efect on the business and possibly to them as share holders.

So why are they doing it if they know it is not a good idea?

To please the 99% of this population who are brain dead and to hopefully get their vote come the next election!
 
Perhaps the 'blame' lays with the other signature on the contract!

Roy.
 
Digit":1zgqya4a said:
Perhaps the 'blame' lays with the other signature on the contract!

Roy.
There is no blame Roy. At the end of the day RBS had to be bailed out and they needed someone to steer the company back into profit. If they had offered a salary of £150k they would have had to put a Civil Servant in to run it as no one would have taken up the position. It is not a small task having to run a business with a few thousand employees. I certainly would not want his job
 
Which is why I have written 'blame' rather than just blame.

Roy.
 
newt":2tutqoev said:
It has always been my understanding that someone's worth is decided by the forces of the market place. If you take the Wayne Rooney issue do you not think he would be paid a fraction of his wage if his employers could get away with it, of course not he would not play for M.U.. The football is a business MU need to be in the top 4 and to play in Europe, therefore they need to attract top players, and top players attract silly money, simple. (I believe that it will not be long before the bottom drops out of the football market, but it will jhave to be a world wide down turn) Same applies to CEO's forces in the market place, whether it is obscene or not is not a consideration. Of course some organisations make the wrong call and pay someone a fortune and they fail to deliver, that's life. What is the point of a contract if it is meaningless .

There is a major flaw in your point. You are applying the laws of the free market on a 'business' that doesn't play by those rules - not by any stretch of the imagination. I think most of the big clubs in Europe are in serious debt, yet they are acting as though the bubble will continue forever. Sound familiar? Yep, those Bankers got paid an awful lot of money too. Strange how someone can get paid that amount of money and yet a Bank that had an history of over 100 years went bust - under his very watch. If these people were so competent, how come we were weeks from serious civil unrest on the streets of the UK?
 
MIGNAL":n3mzk611 said:
newt":n3mzk611 said:
It has always been my understanding that someone's worth is decided by the forces of the market place. If you take the Wayne Rooney issue do you not think he would be paid a fraction of his wage if his employers could get away with it, of course not he would not play for M.U.. The football is a business MU need to be in the top 4 and to play in Europe, therefore they need to attract top players, and top players attract silly money, simple. (I believe that it will not be long before the bottom drops out of the football market, but it will jhave to be a world wide down turn) Same applies to CEO's forces in the market place, whether it is obscene or not is not a consideration. Of course some organisations make the wrong call and pay someone a fortune and they fail to deliver, that's life. What is the point of a contract if it is meaningless .

There is a major flaw in your point. You are applying the laws of the free market on a 'business' that doesn't play by those rules - not by any stretch of the imagination. I think most of the big clubs in Europe are in serious debt, yet they are acting as though the bubble will continue forever. Sound familiar? Yep, those Bankers got paid an awful lot of money too. Strange how someone can get paid that amount of money and yet a Bank that had an history of over 100 years went bust - under his very watch. If these people were so competent, how come we were weeks from serious civil unrest on the streets of the UK?

So what do you think would have happened if the CEO of RBS and the top 50 footballers had been offered say only 10% of their current income.? I did suggest that some do fail and I agree the banking crisis 3 years ago was a disaster and was fuelled by greed. But I thought the issue of the thread was the bonus of the present RBS CEO and the comparison with some highly paid footballers. As I understand it MU are in dept but are considered to be financially sound if they can service the cost of their loans, I do have trouble getting my head around that aspect of business.
 
I would point out Pete that pro footballers were at one time limited to a maximum salary.

Roy.
 
Never thought you were, I thought perhaps that you had simply missed the inverted commas, nothing more I assure you.

Roy.
 
Digit":vur6ljga said:
I would point out Pete that pro footballers were at one time limited to a maximum salary.

Roy.

You are quite correct Roy, but I am assuming that the forces in that market put an end to it. However I suspect it was more complicated than that, professtional football association I believe had some input. It was also in those days when men played for the love of the game, until someone had they idea that you could still love the game and earn a fortune if you employed an agent to negotiate a huge wage, you only need a few to do it and the market takes over.
 
I can't stand football, but if they restricted the salaries of the players, the league would be a much more level playing field than it is today with the big clubs owned by billionaires who just own a club for fun and who are not bothered about the return on their capital
 
flanajb":2qxen9m5 said:
I can't stand football, but if they restricted the salaries of the players, the league would be a much more level playing field than it is today with the big clubs owned by billionaires who just own a club for fun and who are not bothered about the return on their capital

Agreed and they may happen, I would assume it would have to slowly decline over time. There is some evidence that it has started with the reduction in TV sponsorship.
 
chipmunk":2zhe65ai said:
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

I think your figure of 8 levels is woefully low. Probably nearer 20 or more I'd say. Also how do you factor in a conglomerate? Each conglomerate has those levels but then you have the holding company...responsible for the whole lot. It's not easy.
 
As I understand it the bonus is discretionary, no-one's hands are tied by contractual entitlement, it could be prevented if the will was there. The reason it isn't is that he is a top-flight banking CEO, and they don't come cheap - well, at £2m total he probably is coming cheap by comparison. I bet Bob Diamond ends up with a hell of a lot more!

We all have a lot at stake in RBS being successful, and unfortunately that means it has to remain a bank, full of bankers.

MIGNAL":3vlqrofo said:
Strange how someone can get paid that amount of money and yet a Bank that had an history of over 100 years went bust - under his very watch.

If you do mean Hester, it wasn't under his watch, he was hired after the collapse to try to manage the business back into a more healthy position. He's no Fred Goodwin.
 
flanajb":11yfifb5 said:
To please the 99% of this population who are brain dead and to hopefully get their vote come the next election!

Presumably you consider yourself to be one of the 1%?

I don't, given that stupid, inaccurate and most offensive comment.
 

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