Rescued bank to pay millions in bonuses
RBS 'making monkeys' out of the government, says Vince Cable

* Simon Bowers
* The Guardian,
* Saturday November 1 2008
* Article history

Royal Bank of Scotland

Royal Bank of Scotland. Photograph: Newscast

Royal Bank of Scotland, which is being bailed out with £20bn of taxpayers' money, has signalled it is preparing to pay bonuses to thousands of staff despite government pledges to crack down on City pay.

The bank has set aside £1.79bn to cover "staff costs" - including discretionary bonuses - at its investment banking division for the first six months of the year alone. The same division caused a £5.9bn writedown that wiped out the bank's profits for the same period.

The government had demanded that boardroom directors at RBS should not receive bonuses this year and the chief executive, Sir Fred Goodwin, is walking away without a pay-off. But below boardroom level, RBS and other groups are preparing to pay bonuses to investment bankers who continue to generate profits.

The disclosure drew fierce criticism from Vince Cable, the Liberal Democrat Treasury spokesman.

"The government said they would attach strict conditions on bonuses and it is very clear they are doing nothing of the kind.

"The banks are just making complete monkeys of them."

http://www.guardian.co.uk/business/2008/nov/01/royal-bank-scotland-vincent-cable


incredible... personally i like to get kissed before i get fucked. clearly gordon brown does not.

Cool, do I get my share as a check or do they just transfer it straight into my account?

a disgrace... how about chucking that kind of money at some inward investment or compensating the innocent for their job losses.

Figures are up by 200,000 so divided equally that would be around £8,500 per person...

...how many homes would that save from repossession, and how many months worth of food and bills would it pay for...

Cool, do I get my share as a check or do they just transfer it straight into my account?

Charlie P, will spack your bum.


As regards the bonuses, this is where we have the joys of partial state ownership getting blurred with the realities of the private world.

I'm convinced the state ownership of some banks will unravel from within.

insulting to say the least

...how many homes would that save from repossession, and how many months worth of food and bills would it pay for...

it would save every home in the country from repossession. RBS but for government intervention is bankrupt and this one division gets bonuses despite losing almost 6 billion quid!

Withdraw the Government funding and let them go under. They need to be shown who is boss.

Charlie P, will spack your bum.

I'm getting a big payout from RBS, I will spell chteqk however I want.

Withdraw the Government funding and let them go under. They need to be shown who is boss.

If they go under, we are all fucked, so they are the ones holding the jar of vasolene.

not at all. the government can easily pass a law taking them over the second they go under :)

I'm getting a big payout from RBS, I will spell chteqk however I want.

Of course it would help if I could spell smack :)

This whole situation takes the piss doesnt it.

They fuck up, screwing us all over.

We cant afford for them to die, so we bail them out.

They decide to carry on behaving like assholes, and we cant do shit.

Average people are reduced to being their rapedolls.

In these sort of extraordinary circumstances, something should be done. We are no longer talking about private profits, that they have 'earned' - we are now talking about taxpayer money - therefore, this has now become a form of treason. If these people wont willingly give back their bonueses, assets equal to the value of these bonuses should be siezed by the government and liquidated in the interests of the public. Seaports, airports and rail terminals should be closed to them until they agree or the assets are siezed. Those who refuse, and somehow hide their assets, can be sent to the Tower of London :)

can be sent to the Tower of London :)

To have their head choped off.:yes:

this fucking stinks

^^ Really stinks. I cant believe they have been so stupid to do this. They must have realized the outrage it would cause. Clearly they just don't give a shit.

Look at this thread - people from every political spectrum agree this is unacceptable.

When everyone agrees on something, doing something about it should be a formality.

Instead, we are all powerless.

Democracy transfered power from the wallets of a few, to the ballot boxes of the many.

But in an age of global capitalism, decisions are made by multi-national entities, who are not loyal to any electorate - the IMF and World Bank are not elected for example - and massive economy-changing corporations like BP are of course not elected.

Essentially power has moved backward from the ballot boxes, to the wallets.

Just as sci-fi writers predicted for the last couple of decades, mega corporations have therefore become like the new governments, replacing the 'state' - and wealth, rather than democratic power, is the only thing that can influence them - richer shareholders having more say than poorer ones.

Just as sci-fi writers predicted for the last couple of decades, mega corporations have therefore become like the new governments, replacing the 'state' - and wealth, rather than democratic power, is the only thing that can influence them - richer shareholders having more say than poorer ones.

but... this company wouldn't exist now without the british government. we OWN them.

We may aswell start giving them government issued Lamborghinis.

but... this company wouldn't exist now without the british government. we OWN them.

Yeah, we decided to tell our employees to pay themselves £1.7bn of our money in bonuses then I guess :)

not at all. the government can easily pass a law taking them over the second they go under :)

Jokes aside, the government would never deliberatly let a major bank go under, and then nationalise it, they rather just let it reward bonuses like this. I mean cmon - not only does Brown not want to appear to nationalise anything - but nationalising such an important economic institution, will rightly or wrongly, effect the economy badly.

this isn't the half of it, i've just read in the eye that northern rock of all banks is having a massive christmas bash for all its senior execs! including 'several' days of golf. oh and i forget who but someone at the rock is maybe getting a £400k bonus this year :?
northern rock are virtually a government department, and as such should behave like one.

I can believe they can get away with this after whats happened.

And whos fault is it for allowing this madness...oh that'll be Gordon Brown again.

So why is this not headline news this morning?

Probably because the newspaper editors received an extra bonus too last night.

Or maybe because they feel more people will be interested in a Satanic dance troupe.

And why the hell has gordon brown not stipulated NO BONUSES for these people? If they refused to take the money they would have been screwed, so they would have had to agree. Is there some kind of petition about this? I know its isnt DIRECTLY the tax payers money, but its still pretty frustrating.

But this wont stop the media and people in general moaning on about the minority of benefit cheats while completely ignoring the real benefit cheats, these dodgy fuckers in big business.

Apologies for my tabloid style capitals. I feel bad.

he hasn't stipulated that for the simple reason that the banks will lose their best staff if he does. in this case these wonderful staff have lost almost 6 billion.... barclays are just as bad, they have sold out to the arabs so they could keep paying huge, huge bonuses to staff. that was apparently the only motivation. the british government underwrites the risks of the bank, and its owned by a government elsewhere.

i feel a march coming on.

i'll be there.

A march for what though? As stinky as the situation is the bare facts are that if RBS don't pay the going rate (including bonus') then the people who they need to turn it around will simply go somewhere else, leaving the average and the also rans.

Yossarian Brown is caught in a catch 22 of his own making along with the rest of us.

the people who they need to turn it around will simply go somewhere else, leaving the average and the also rans.

eh? they lost billions! they still have their jobs. the people who you think will turn it around are the people who fucked it up. RBS haven't brought in new staff or anything, this is bonuses for existing staff and the way they are doing it is by counting 9 months of profits and excluding 3 months of massive losses.

nah it's not like that takemehigher. there's nowhere else for these bankers to go right now. as gothic points out this is such bullshit that even investors aren't happy. barcalys has said fuck you to its investors because their management want to continue their fat bonuses. what barclays have in effect done is raid their shareholders for bonuses that can't be funded any other way. if you ask me this is fraud. it's so blatent. it's so overt from each and every dodgey bank- northern rock, barclays, rbs. who's next? i want an investigation. the authorities need to level the playing field and intervene left right and centre.

Nothing is going to be done.

Just watch.

Where is this fucking 'march'?

Nobody can be bothered.

No authority has power to do shit.

they have essentially told their investors and the general public to fuck off. They have failed yet continue get more and more. This is the rot eating away at our democratic system.

No banks are hiring now. The industry is totally frozen and everyone is terrified of losing their jobs because they could find themself on the heap for quite a while until things turn around. Bonus expections are next to nothing. In fact, most people will walk away from their salary / bonus meetings with a sigh of relief if they have met inflation. So if these bonuses are being paid to the senior management there would be a case for clawing them back.

I did want to point out though that bonuses are paid from top to bottom in banks. Even the most junior staff get bonuses. its just the way banks operate. Comanies like it because they dont have to include bonuses in the pension contribution.

RBS is a massive company. It is concievable that just standard bonuses paid to staff lower down the company could amount to a large figure. These people may have worked hard all year and have nothing to do with what happened. If they got a decent appraisal then they are due a bonus. It would have been in their contract.

I dont know where these payments are going but having considered it I would like to see more details before I let my outrage flow.

eh? they lost billions! they still have their jobs. the people who you think will turn it around are the people who fucked it up. RBS haven't brought in new staff or anything, this is bonuses for existing staff and the way they are doing it is by counting 9 months of profits and excluding 3 months of massive losses.
You're missing my point though I totally agree with your sentiment.

We have to accept that we need banks, and that the entire sector (and the government) screwed it up in a big way. Call it mass hysteria, blind optimism, whatever - it's happened.

All that matters right now is getting out of the mess and putting the world right. Unless there are a bunch of smart bankers sitting on the subs bench somewhere getting rid of the brains isn't the answer regardless of how much of a cock up they made before.

I've probably been affected more than most by this mess and believe me when I say that I hate the idea as much as the next mug but practical measures are needed. I don't intend to eat beans on toast for any longer than necessary.

all of this stinks of cat shit. the average person finished work on friday with everything just fine, economy's doing well (apparently), might buy a new sofa with that credit card i got offered in the post, then WHAMMO: monday morning we are facing a GREAT CHALLENGE, the worst financial crisis since THE GREAT DEPRESSION, STOCK MARKET TURMOIL, CREDIT FREEZE, BUSINESSES STRUGGLING, BANKS FOLDING, PENSIONS SLASHED, SAVINGS LOST, JOBS CUT, OMG MY HOUSE!! QUICK CUT SPENDING, SAVE MONEY, EAT SPARINGLY, DON'T HAVE KIDS, MOVE IN WITH YOUR PARENTS, SELL A KIDNEY, WON'T SOMEONE PLEASE BAIL US OUT!!!!!!

... but everything was okay on friday. i just bought a new sofa. :(

that's what i hate. they must have seen this coming but the average hard-working soul who did nothing wrong just got dropped in the deep end, no warning, just a brick tied 'round their ankle and an order to swim.

was our leadership negligent? should they not have seen this coming and taken steps to soften the impact far, far earlier, warned workers to prepare for probable job cuts? harder times? instead we got a panic attack and mass chaos. great. perfect.

nah it's not like that takemehigher. there's nowhere else for these bankers to go right now. as gothic points out this is such bullshit that even investors aren't happy. barcalys has said fuck you to its investors because their management want to continue their fat bonuses. what barclays have in effect done is raid their shareholders for bonuses that can't be funded any other way.

yes barclays shares fell 11% on the news of the deal because the stock market was upset that they accepted something that was a worse deal for the business than the british government was offering, solely because it would keep their bonuses in place.



I've probably been affected more than most by this mess and believe me when I say that I hate the idea as much as the next mug but practical measures are needed. I don't intend to eat beans on toast for any longer than necessary.

maybe? i've seen 70 grand wiped off turnover by the whole mess and thats just for the three months to the end of the year.

getting rid of the brains isn't the answer regardless of how much of a cock up they made before.

brains? what brains? they lost the money!

RBS is a massive company. It is concievable that just standard bonuses paid to staff lower down the company could amount to a large figure.

this is just for executives in the investment banking division which lost almost 6 billion quid.

this is just for executives in the investment banking division which lost almost 6 billion quid.

yes, so are you ready to let your rage flow, octo?

this rbs bash, is incidentally just for the directors and assistant directors. who the fuck is funding that i ask.

should they not have seen this coming...

...to be fair we had our warning over 18 months ago. You could even go back as far as 2004 when US interest rates climbed from 1% to over 5% in 2006.

Some UK companies started shedding jobs almost immediately. It's only in the last two or three months that 'panic' has started to set in, mostly because the crisis has now permeated to touch almost every one of us.

Good news is that the markets are going up slightly which means stocks have probably bottomed out already, the big banks are safe, and corporations are taking a reality check on unsustainable high salaries.

It was good while it lasted but if you kept your credit in check, didn't buy a load of shit you didn't need, and bought a house that didn't cost you 5 times your salary you are probably well placed to come out of this relatively intact. The younger you are the better... so it's a good time to be a student!

We've got at least 18 months of lean times ahead of us... so cut out everything you can afford to cut out, don't piss your boss off, and don't take anything for granted.

That is unless you are a highly bonused, bailed out banker in which case... winner! You can spend your bonuses on shares while they are at the bottom of the market and in 5 years you'll be 10 times richer than you ever thought you could be.

^^
Not a good time to be a graduate.

That is unless you are a highly bonused, bailed out banker in which case... winner! You can spend your bonuses on shares while they are at the bottom of the market and in 5 years you'll be 10 times richer than you ever thought you could be.

this bit really is the icing on the cake.

sometimes i get angry. http://commongroundcommonsense.org/forums/style_emoticons/default/blushing.gif

i'm just fcuked off for people. poor sods who've worked all their lives and were on the verge of retirement when their pension went to shit, stuff like that... s'not fair.

edit: oh and the new sofa - move in with parents story wasn't mine, just a hypotheitcal. :D i live with cats and a mad woman. :yes:

^^
Not a good time to be a graduate.

Hah, I am fully aware of this unfortunately.

I didnt have time to read the threads but as far as I'm concerned those greedy buggers can piss off to wherever they would go. A europewide limit on bonuses would stem the loss of people.

They can piss off to the USA and Asia if they want, but they didnt exactly do wonders in their current jobs did they so why do we need them to stay? Their networks?

No banks should be paying ANY bonuses at this time, that way these absolute shits can't sneak off and get another job at another bank and get a quick hit bonus for losing all our money. To pay bonuses now would be to reward failure again, complete and utter madness that shows no lessons have been learnt from the recent crisis that has blown up in all our faces.

If some of the bankers do help to get us out of this mess then they should be rewarded years down the line when the good decisions they make now bear fruit in future. To pay bonuses weeks after the worst banking crisis in decades is madness, pure and simple. Brown should not be sitting by and allowing this to happen, I hold him and his hapless government in even more contempt as a result of this.

yes, so are you ready to let your rage flow, octo?


Yep, rage in full flow. Look to the horizon and you may see the faint glow in the distance.

i don't usually read the telegraph but this is an interesting piece examining the political implications of this current economic shitfest (last couple of paragraphs particuarly interesting given tomorrow's general election in the US): Revenge of the Left across the world (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3366575/Revenge-of-the-Left-across-the-world.html)