No bonuses in a PLC are set in stone.

Is derwent right in what he said Mintball? With the dates showing it was a previous government that approved them? And this Hester geezer got millions of shares last year which would definitely have been under a previous government. So why the uproar now?

Back in yer boxes everyone - Hester's turned down his £1m bonus. See, he's a lovely man after all.

I think it's come up as an issue now because there is increasing anger at the scale of renumeration among the highest earners – particularly in the context of the lie that is 'we're all in it together'. People are seeing their own pay cut or frozen – 'austerity, don't ya know' – yet a small section of society seems utterly immune to this.

Did Labour approve a bonus scheme? I'm sure. New Labour was a continuation of the core economic policies of the previous 20 years, so this would hardly be a revelation. They presided over a continuing growing disparity between the very rich and everybody else, and were all too friendly with big business and finance.

Rather than start another thread – here's an interesting little factoid from Dr Eoin Clarke via Twitter (hence its briefness): "Labour grew the economy £15,000,000,000 in their last 13 weeks in Government. Osborne grew the economy just £5bn in 550 days."

Thank you.

I see what you mean. People must be disgruntled about being told one thing by a government who is telling them to buckle up, but allowing a majority government owned bank to give its staff millions in bonuses. Now I understand the animosity.

Don't follow politics back home much, bar the odd complaint here and there... as you can tell.

Actually, rereading one thing you said. I suspect New Labour would not be totally innocent in this, as despite what you pointed out re the fiscal policies of the previous 20 years, it was them that were at the helm when the GFC kicked in, the RBS were saved and the very same people that are being complained about today were allowed to have millions in salaries, shares, bonuses and bonus incentives by New Labour. Difference is, New Labour didn't say "buckle up" so to speak.

Please tell me that you don't seriously believe that UKFI operate totally independent of any government influence

Oh indeed. As I said, New Labour had continued with very much the same economic policies of the previous 20 years, so such sucking-up to big finance/business was, far from being out of the ordinary, entirely in keeping with the previous 30 years.

Perhaps there really also was a belief that these people were so special and rare that they needed such renumeration packages – or they'd disappear somewhere else. I do suspect that that idea has become ingrained in many walks of life. It's partly what's been behind the big rises in pay for council bosses and senior managers in recent decades, since local government was told firmly that it needed to recruit 'proper' businesspeople from 'proper' businesses – and therefore would have to pay the 'market rate'. Which was, in itself, part of a very long-term demonisation of the public services as a whole.

Mere pocket money for the man - which he'll probably pick up next year instead.

Being that RBS/Natwest have sold off their investment business in the last year I'm not sure what it is that a CEO will do in the business now that doesn't involve signing orders for paperclips and worrying about what colour the seat fabric should be on the counters ?

Perhaps you could point out where I said there was no government influence ? What I said was that UKFI ultimately has the accountability for and control of these investments.

UKFI's mandate is with HM Treasury, not HM Government, and they are legally bound to operate on a commercial, arms length basis.

Of course there will be government and political influence, but the directors of UKFI have to operate within their mandate otherwise they will be acting illegally. UKFI is independent in the same way that Bank of England is, but it will always be subject to influence by whichever government is in power that's just a fact of life.

Love it.

He's probably a Cambridge man you know. I too went to Cambridge...





























what a lovely day out that was.

This belief is ingrained. As people worldwide believe it. They create a self fulfilling prophecy as though not everyone with some training couldn't do what they do. They also as a result of aforementioned prophecy can walk into jobs internationally.

My main gripe is the jobs for the boys Non-Executive Directors and how they sort out the pay and bonus packages for their mates that employed them and they themselves get larges sums for doing very little. That really doesn't sit well with me. Though I think I've done it to death on the Sin Bin.

Private Eye have been doing a bit of digging and found that these remuneration committees are largely made up of other bankers. So the argument some committee said Hester deserved this bonus so he should get it is IMO completely undermined when you realise who actually sits on these committees. it is one set of bankers awarding pay to their mates in the industry and just another reason why it is a self serving industry at the top that needs reforming.

The banks are past masters at infiltrating, sabotaging, compromising etc. agencies charged with creating legislative boundaries of operation. Take Iceland in the run-up to economic collapse. It's estimated that a third of those working on the overseeing committee were former bankers whilst another third were headhunted by the Icelandic banks before they could complete their investigations. In the US the situation is far worse. The Madoff swindle showed the line between poacher and gamekeeper is now so hopelessly blurred it's difficult to tell who is working for whom. Consider the report by the incoming SEC inspector general, David Kotz, which showed that between January 2007 & June 2008 the enforcement arm received over 5,000 complaints about illegal and manipulative naked short selling and investigated precisely none of them.

Well the news has knocked nearly 5% off RBS's share price today. For the slow ones at the back (Labour supporters) that is a lot more than the £1m you were going to pay Hester.

Now I'm confused. Precisely why would this be seen as such a bad, bad thing that the share price would fall?

Presumably as they (investors) think Hester is doing a good job and he may leave now. Also, the role has become highly politicised and so nobody will find it easy in future. Politicians have a very strong track record of screwing eveything they touch up as they are often incompetent egotists. Once they start interfering and putting pressure on you know it'll end in a mess.

Because the person who posted it seems to think that share prices and the gambling thereof is in any way related to the real world, he probably hasn't noticed that as soon as shares fall then someone somewhere else snaps them up and all the little begging dogs sit up and start scrambling around to buy them back.

The stock market wouldn't exist without frightened sellers and bullting buyers.

Inevitable, given the bailout, I would have thought.



As opposed to the bankers and financiers who ensured that banks such as RBS needed to be bailed out?



That, Sir, is beautifully phrased.

Yes, very nice passage of text there but the reality is somewhat different.

The pricing of RBS shares will contain a larger element of "political risk" than completely public companies. Political risk is almost universally seen as a negative thing when it comes to investing, because politicians tend to be a fairly thick bunch who are prone to being swept away by populist bowlacks, rather than acting out of cold, hard, logic. Therefore the more influence politicans are deemed to have over the running of a company (generally) the more depressed the share price will become. It has been shown that politicans have more influence over RBS than was previously generally accepted and so the share price has taken a hit. It was the perception of political risk which caused the previous Government to set up UKFI as an arms-length representative of the Government when they invested in RBS.

The same mechanism is at play when pricing sovereign debt - Italy being the shining example. Why do you think they installed a technocratic Government?

The irony of all this of course is that the biggest complaint to come out 2008 was that you had a guy running RBS who knew nothing about banking (supposedly). Now you're all complaining about the Board of Directors and Remuneration Committee being made up of bankers, and of course we now effectively have politicans setting the agenda for the bank (hi George). So all in all I'd say you lot need to make your mind up exactly what it is you want.

And since Hester has been in charge, how much has he managed to knock off the share price?

What has changed between the opening and closing of the stock market today ?

Very little in terms of Government influence, they already had a huge influence over what happened at the bank with or without the UKFI firewall.

Very little in terms of trade,



Nothing that won't regain within days when the frightened sellers are outnumbered by the bullting buyers.

Its almost a non-story except for the fact that there is a growing resentment towards all financial institutions and their method of remuneration which for all their bravado and apparent indifference can only do them harm.

Well its dropped 37% in the past year alone.

I understand Diavalo Rosso is a Salford fan so I guess we can make this argument in Salford terms.

Salford had a coach with a proven track record in Shaun McRae and some people at Salford understood that if you want to compete with the best that means getting the top coaches in and paying them the going rate. Had Salford not paid a good salary for McRae what would be to stop him from simply going elsewhere and finding another club in Super League or the NRL who would.

Now there were some Salford fans that didn't "get it" and were constantly complaining that McRae had done nothing, had taken them backwards and they should get rid of him, they didn't realise that you need the top coaches like McRae to compete.

In the end they succeeded in hounding him out and look at the mess Salford are in now.

Do we want this to happen with RBS?

If Salford had paid McRae a £1 million bonus then perhaps they would be going into the 2012 season with a former Super League winning coach in charge instead of losing him to Hull...

When the top bods from RBS are poached by other banks, they will prove that to keep said top bod you need to pay crazy amounts of bonuses. Or will they poach just so they can continue to somehow try to con us into justifying their own crazy bonuses.

I would hope that now RBS and its top guys have done the right thing, Barclays etc... will follow suit and not almost automatically award bonuses. What was it something like 95% get their bonus. In that case it isn't really a bonus and just an extension to salary. Call it that and pay all the correct taxes etc...

Limit pay/bonus/expenses as a multiple of the pay/bonus/expenses of others in the organisation.

Some of us remember himbefore his Gordon Gecko transformation

Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus....

Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus....