Who wants to be a millionaire (almost)?

greg66_tri_v2.0

hmbadger wrote:

wrt the .. "getting anyone decent ....". I think this is nonsense, the notion that no one who is capable of doing a good job will do it for less than n millions per year is a fallacy.

But do you think there is out there a selection of potential candidates who are (a) capable of doing "a good job" of running a bank like RBS and (b) are prepared to do it for a great deal less than the market rate for running a bank like that?

I think there are lots of people who think they fulfil these criteria. I doubt there are many who really do.

For some context, RBS's 2011 annual group accounts shows a turnover of £32.6 billion and total assets £1.45 trillion.


As to Rick's point, according to wiki, in 2010 "more than 100 senior bank executives [who] were paid in excess of £1 million each in Christmas bonuses".

rolf_f

Are these talents really that rare? In my organisation, I see plenty of management types who are clearly from the same mould as the Cleggs, Camerons and Millibands of this world. They are nothing special; they often have little actual ability beyond a burning desire to get to the top and an ability to tick the right boxes and that is what the system wants (for some reason). I suspect the top bankers are the same. I'm not saying that I could do it or would want to do it but there is a presumption that they offer some incredible rare ability yet there is never any evidence that what they have actually is rare.

Ultimately, its the same argument that is used for supposed TV talent - and that is just as freely available and in the same way doesn't justify year on year massive percentage pay increases.

I do think though that if you get employed by a company under certain terms and conditions, then you should have the right to be paid accordingly. If those conditions seem innappropriate to others, the fault lies with the employer for agreeing them in the first place.

W1

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

rick_chasey

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Doubt it's related.

Barclays are down 2.3% as I write this, with HSBC down 1.7%.

By and large, for the last 5 months, when EU meet up and discuss Greece, bank share prices tumble.

Just because there's correlation doesn't mean there's cause .

W1

Rick Chasey wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Doubt it's related.

Barclays are down 2.3% as I write this, with HSBC down 1.7%.

By and large, for the last 5 months, when EU meet up and discuss Greece, bank share prices tumble.

Just because there's correlation doesn't mean there's cause .

I doubt it's insignificant. If I were an investor, I'd be concerned about the left-wing press potentially making a senior role at my business vacant, or not in the sights of the top talent going forward.

Oh hang on, I am.

bigmat

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Agree on this. Is this really a left / right issue though? If the guy is doing a good job and his contractual entitlement has been appropriately set, people shouldn't complain when he gets what he is due. Perhaps the "man on the street" can't get his head around the fact that somebody would warrant, or need, a £1m bonus (although they would no doubt find the concept of paying £35m for Andy Carroll a lot easier to deal with).

hmbadger

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

rick_chasey

W1 wrote:

Rick Chasey wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Doubt it's related.

Barclays are down 2.3% as I write this, with HSBC down 1.7%.

By and large, for the last 5 months, when EU meet up and discuss Greece, bank share prices tumble.

Just because there's correlation doesn't mean there's cause .

I doubt it's insignificant. If I were an investor, I'd be concerned about the left-wing press potentially making a senior role at my business vacant, or not in the sights of the top talent going forward.

Oh hang on, I am.

All this stuff is nothing new for investors. They know it's gov't run, they know there's anger, and will be every January when bonuses get paid.

This Greece exposure worries investors.

Big whoop, the big boss didn't take his bonus.

He obviously wasn't in it for the money anyway, else he wouldn't be at RBS!

hmbadger

BigMat wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Agree on this. Is this really a left / right issue though? If the guy is doing a good job and his contractual entitlement has been appropriately set, people shouldn't complain when he gets what he is due. Perhaps the "man on the street" can't get his head around the fact that somebody would warrant, or need, a £1m bonus (although they would no doubt find the concept of paying £35m for Andy Carroll a lot easier to deal with).

People aren't interested in the nuances of contractual entitlement, who awarded the contract, and why. They just think that these people aren't worth the vast amounts that they are paid. In other words they don;t believe that it has been 'appropriately set'. And they're right.

And once again the football analogy is nonsense. You'd be hard pushed to find anybody who believes that Andy Carroll was worth £35M.

W1

hmbadger wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

What's ironic?

It is insane to actively want to ensure that people who are best placed to sort out a state owned bank are not going to want to do it, because they will not be remunerated properly.

"Back in the day" the public woulnd't have had a say in how private businesses pay their staff, so I'm not sure of your point. Now we own 83%, there is a war-cry sent up by Labour idiots ensuring that RBS will not have the best staff. That is plain stupid envy politics.

bigmat

hmbadger wrote:

BigMat wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Agree on this. Is this really a left / right issue though? If the guy is doing a good job and his contractual entitlement has been appropriately set, people shouldn't complain when he gets what he is due. Perhaps the "man on the street" can't get his head around the fact that somebody would warrant, or need, a £1m bonus (although they would no doubt find the concept of paying £35m for Andy Carroll a lot easier to deal with).

People aren't interested in the nuances of contractual entitlement, who awarded the contract, and why. They just think that these people aren't worth the vast amounts that they are paid. In other words they don;t believe that it has been 'appropriately set'. And they're right.

And once again the football analogy is nonsense. You'd be hard pushed to find anybody who believes that Andy Carroll was worth £35M.

OK, Carroll was a bad example. But, take pretty much any struggling club up and down the land and the majority of fans will be berating the board for not spending enough. Its fine to pay a footballer £100k a week apparently (what's that a year? especially as these figures tend to be after tax?!) and yet somebody running a bank and potentially making an impact to the nation's finances of almost imponderable amounts doesn't deserve to be paid what is probably significantly below market rate? I get that a lot of bankers have been getting completely disproportionate discretionary bonuses even when performing badly, but if this guy is doing his job and doing it well I don't see why he shouldn't be paid what he was agreed to be paid.

W1

hmbadger wrote:

BigMat wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

Agree on this. Is this really a left / right issue though? If the guy is doing a good job and his contractual entitlement has been appropriately set, people shouldn't complain when he gets what he is due. Perhaps the "man on the street" can't get his head around the fact that somebody would warrant, or need, a £1m bonus (although they would no doubt find the concept of paying £35m for Andy Carroll a lot easier to deal with).

People aren't interested in the nuances of contractual entitlement, who awarded the contract, and why. They just think that these people aren't worth the vast amounts that they are paid. In other words they don;t believe that it has been 'appropriately set'. And they're right.

And once again the football analogy is nonsense. You'd be hard pushed to find anybody who believes that Andy Carroll was worth £35M.

No, they are wrong because they are jealous and have no concept of the bigger picture.

I presume you would employ some plodder who will save you a few £k per year, compared to investing in someone who is best (or at least better) for the job at a higher cost, if it were your own business?

Honestly, do you not see the stupidity?

Footballers are employed by the private sector - their wages are set in the market. What they are paid is irrelevant, and those who disagree with it are welcome not to patronise those companies.

jds_1981

DonDaddyD wrote:

Even if the Bank was 100% owned by the Government. It would still operate in the private sector and need to be competitive in the private sector

It's a political win for Labour that he has turned it down. Not one I'd be very proud of.

Exactly.

rick_chasey

Re the RBS share price - I feel the need to bury the fallacy properly - it's sh!t like the below that makes investors pull out of bank stocks

: There's a great line running on the Wall Street Journal this morning – apparently the French government is reluctant for countries to be penalised if they breach the maximum debt/GDP ratio allowed under the new fiscal compact.

From the WSJ:

EU leaders will discuss on Monday two final unresolved questions on the fiscal compact.

The first is whether non-eurozone countries that have signed the pact will be allowed to participate in meetings where euro-area issues are discussed.

Another issue is whether sanctions will be imposed when countries fail to meet the pact's requirements on debt-to-gross domestic product ratios.

"The Italians and the French are not keen on the debt rules being up for sanctions," an EU official told Dow Jones Newswires on Monday.

DonDaddyD

I think the footballer example is invalid as a comparison. But completely valid as an example of what the public are and aren't willing to accept.

mudcow007

I don't really know that much about politics an all that jazz, as to be honest it bores the "thripny bits" off me. its not like i will have a say in what's happening any ways but....

He was brought in to do a job, he is paid quite a lot of money, but if you advertised his job with a salary of say £100,000 who would do it? as the people who are capable of doing the job are more than likely already earning waaaaay more than that

as someone mentioned earlier - "pay peanuts, get a monkey"

notsoblue

jds_1981 wrote:

DonDaddyD wrote:

Even if the Bank was 100% owned by the Government. It would still operate in the private sector and need to be competitive in the private sector

It's a political win for Labour that he has turned it down. Not one I'd be very proud of.

Exactly.

I agree. This was an easy win for Labour, but only because most people don't really understand whats going on. They just see people in suits making more than them. Its not uncommon in politics though. Parties tend to try to get popular support by convincing the "squeezed middle" that its people who have much less or much more that are the source of their problems and don't deserve what they have.

DonDaddyD

mudcow007 wrote:

"pay peanuts, get a monkey"

Actually no, it's not always the "pay peanuts" rule.

I don't subscribe to the notion that 'the more you pay the higher calibre of candidate' always is the rule. I'm considering taking upto a £5k pay cut to be nearer my son. Ms DDD could earn a ton lot more (an annoying amount more) but that work isn't her calling and like me we place value in the quality of our lives outside work. I'm sure there are those who consider a range of things when deciding to take a job over and above being the 'best and getting paid the most'. A company throwing in a free nursery would be it's weight in gold right now.

Also, mokeys can enjoy saffron and gold seasoned bananas if they get a taste for it. So more money doesn't always = best person.

You pay a competitive salary in line with the rest of the market. You incentivise the job to keep the employee motivated. You train and develop to keep his skills current and polished. End of.

greg66_tri_v2.0

http://www.bbc.co.uk/news/uk-politics-16788678

To give him his due, he got under my skin much more quickly on this occasion than normal. Even the interviewer appears somewhat incredulous at his "performance".

rjsterry

W1 wrote:

hmbadger wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

What's ironic?

It is insane to actively want to ensure that people who are best placed to sort out a state owned bank are not going to want to do it, because they will not be remunerated properly.

"Back in the day" the public woulnd't have had a say in how private businesses pay their staff, so I'm not sure of your point. Now we own 83%, there is a war-cry sent up by Labour idiots ensuring that RBS will not have the best staff. That is plain stupid envy politics.

How is his basic salary without bonus not proper remuneration? No-one (with any sense) is suggesting that he should be on £20K: but there is a big gulf between even, for argument's sake, £300K and £1.2M. The argument (at least from me) is not that a particular rate of pay is too high, but that the rate of increase compared with just a few years ago seems to have detached itself from the general rise and fall of the economy and become self-justifying.

The argument that you need to pay that much to get the right person is circular - CEO A is the best in his field and is offered X to make sure his services are retained; CEO B says I do the same job (?) so I should be paid something similar, and soon all the CEOs have had a big jump in earnings - and round it goes. Because the figures, as large as they are, are dwarfed by corporate profits and share values, no-one notices at first.

As posted before, there has been significant research into the mechanisms at work that have driven the rate of increase so far beyond the norm. In short it is a malfunctioning market.

rick_chasey

He looks like an English Bjarne Riis.



Read somewhere he's picking up £8m in a different deferred payment scheme (the simplification of pay is a key pillar in the pay reforms suggested by the coalition) over the next few years, so he'll be alright.

Surprised this picture hasn't surfaced today.

Jez mon

I can't make my mind up on this.

On the one hand, those at the top, get paid too much, in comparison to the "squeezed middle". The gap between rich and poor is increasingly obvious, and creates social tension.

On the other hand, if he successfully turns the fortunes of RBS around, than he's worth his weight in gold to the tax payer. Giving him £x amount of shares today, with the proviso that he can't sell them until 3/4/5 years from now, seems a good way of promoting him to do so.

DonDaddyD

Greg66 wrote:

http://www.bbc.co.uk/news/uk-politics-16788678

To give him his due, he got under my skin much more quickly on this occasion than normal. Even the interviewer appears somewhat incredulous at his "performance".

It was almost arrogance. He didn't answer the question.

All he had to say was:

"Yes, Labour agreed the bonus as part of the original contract and if Labour were still in power we wouldn't have sanctioned payment of this bonus. Because that would be the right thing to do".

"He could have gone into detail explaining that at the time of agreeing the bonus there wasn't a huge focus on bankers pay, realignment of public finances, spending and benefits. With all these factors in place, the fact that the Country, the majority of people are in debt, house prices, mortgages, lending blah blah it wouldn't be right to pay what is a competitive bonus."

But we all know that while Ed lacks the savvy and charm of a future Leader. If anything he just comes across as more confrontational and argumentative.

rick_chasey

What does irritate me is the inconsistency.

Either you have the model we have now, where execs will get serious pay inflation and enormous amounts of money, or you change it.

Don't just have a go at one guy in one bank - even if it is state owned. Like I said, there are people being paid more than he is working at RBS who aren't getting sh!t.

Either you sort it out across the board or live with it.

---

You can see where labour are coming from. They gave the banks & the city the best years they've ever had, to the point where they f*cked it for everyone, even agreeing to bail out RBS and in return the City goes and fund the Torie party.

They want payback.

W1

rjsterry wrote:

W1 wrote:

hmbadger wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

What's ironic?

It is insane to actively want to ensure that people who are best placed to sort out a state owned bank are not going to want to do it, because they will not be remunerated properly.

"Back in the day" the public woulnd't have had a say in how private businesses pay their staff, so I'm not sure of your point. Now we own 83%, there is a war-cry sent up by Labour idiots ensuring that RBS will not have the best staff. That is plain stupid envy politics.

How is his basic salary without bonus not proper remuneration? No-one (with any sense) is suggesting that he should be on £20K: but there is a big gulf between even, for argument's sake, £300K and £1.2M. The argument (at least from me) is not that a particular rate of pay is too high, but that the rate of increase compared with just a few years ago seems to have detached itself from the general rise and fall of the economy and become self-justifying.

The argument that you need to pay that much to get the right person is circular - CEO A is the best in his field and is offered X to make sure his services are retained; CEO B says I do the same job (?) so I should be paid something similar, and soon all the CEOs have had a big jump in earnings - and round it goes. Because the figures, as large as they are, are dwarfed by corporate profits and share values, no-one notices at first.

As posted before, there has been significant research into the mechanisms at work that have driven the rate of increase so far beyond the norm. In short it is a malfunctioning market.

I can't answer this any more eloquently than Rick has below:

Rick Chasey wrote:

What does irritate me is the inconsistency.

Either you have the model we have now, where execs will get serious pay inflation and enormous amounts of money, or you change it.

Don't just have a go at one guy in one bank - even if it is state owned. Like I said, there are people being paid more than he is working at RBS who aren't getting sh!t.

Either you sort it out across the board or live with it.

At the end of the day, this guy should not be scapegoated.

And god forbid anyone wants to dictate what you earn! What if someone earning less than you thinks it's too much - would you be happy to be paid less on the whim of well-spun populism?

W1

Rick Chasey wrote:

Re the RBS share price - I feel the need to bury the fallacy properly - it's sh!t like the below that makes investors pull out of bank stocks

: There's a great line running on the Wall Street Journal this morning – apparently the French government is reluctant for countries to be penalised if they breach the maximum debt/GDP ratio allowed under the new fiscal compact.

From the WSJ:

EU leaders will discuss on Monday two final unresolved questions on the fiscal compact.

The first is whether non-eurozone countries that have signed the pact will be allowed to participate in meetings where euro-area issues are discussed.

Another issue is whether sanctions will be imposed when countries fail to meet the pact's requirements on debt-to-gross domestic product ratios.

"The Italians and the French are not keen on the debt rules being up for sanctions," an EU official told Dow Jones Newswires on Monday.

I'm not sure it's a fallacy, and I'm not sure you've buried it "properly".

sketchley

There was an interesting point at the weekend, that a failure to pay a bonus could be seen from the outside as failure and a lack of confidence in the chief exec, and would therefore affect the share price of RBS or their ability to borrow or cost of borrowing or the price of the various investment arms they are trying to sell etc etc etc. The net result being that the tax payer actually could lose money by not paying the bonus, weird I know but kind of makes sense when so much of banking depends on confidence.

hmbadger

W1 wrote:

hmbadger wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

What's ironic?

It is insane to actively want to ensure that people who are best placed to sort out a state owned bank are not going to want to do it, because they will not be remunerated properly.

"Back in the day" the public woulnd't have had a say in how private businesses pay their staff, so I'm not sure of your point. Now we own 83%, there is a war-cry sent up by Labour idiots ensuring that RBS will not have the best staff. That is plain stupid envy politics.

The irony is you complaining that not paying someone a huge bonus is knocking a piffling few per cent off the share price. Because paying top whack and huge bonuses is going to attract the best person right? Someone who can perform great things with the company. Maybe even a European Banker of the Year, or someone like that. Someone like Fred Goodwin. He was paid a lot wasn't he? He must have been good.

Eh? Oh.

hmbadger

Sketchley wrote:

There was an interesting point at the weekend, that a failure to pay a bonus could be seen from the outside as failure and a lack of confidence in the chief exec, and would therefore affect the share price of RBS or their ability to borrow or cost of borrowing or the price of the various investment arms they are trying to sell etc etc etc. The net result being that the tax payer actually could lose money by not paying the bonus, weird I know but kind of makes sense when so much of banking depends on confidence.

Pfft. Sounds like the sort of scaremongering crap from the 'you've got to pay them huge bonuses or they'll all move abroad' contingent.

W1

hmbadger wrote:

W1 wrote:

hmbadger wrote:

W1 wrote:

RBS share price down 2.5%, or in other words, a loss (on paper) of many thousands of percent greater than the cost of the "bonus".

So well done envy politics, you've cost the taxpayer many millions, by bleating about £900k.

Typically stupid and short sighted.

The irony of it.

All the arguments that you are using to justify the absurdly high salaries/bonuses would apply to the banking executives who where in charge when the bank went bust would they not? Tell me, were they worth the money? Did they have these rarified skills that you speak of?

What's ironic?

It is insane to actively want to ensure that people who are best placed to sort out a state owned bank are not going to want to do it, because they will not be remunerated properly.

"Back in the day" the public woulnd't have had a say in how private businesses pay their staff, so I'm not sure of your point. Now we own 83%, there is a war-cry sent up by Labour idiots ensuring that RBS will not have the best staff. That is plain stupid envy politics.

The irony is you complaining that not paying someone a huge bonus is knocking a piffling few per cent off the share price. Because paying top whack and huge bonuses is going to attract the best person right? Someone who can perform great things with the company. Maybe even a European Banker of the Year, or someone like that. Someone like Fred Goodwin. He was paid a lot wasn't he? He must have been good.

Eh? Oh.

Ah, I see. So no banker can ever be paid more than 2p an hour because some weren't very good once?

He unquestionably was very good for a long time - but his arrogance overtook his talent.

That "piffling few percent" is much larger than the bonus - ironic?