So RBS lose £8billion and still handout bonuses.

2»

Comments

  • mseven1mseven1 Posts: 995
    Forum Member
    ✭✭
    i4u wrote: »
    Re bonuses: the argument is they are required to attract the best people, but if all banks are offering bonuses they are back at square one in terms of pay?

    And weren't the people who took decisions leading to the economic crash on bonuses, indicating bonuses may attract the wrong people rather than the best?

    Just because RBS made a loss doesn't mean they performed bad. If they had other people it mightn't have performed as well as it has.

    It comes back to the issue that they got a fair share. The economic crash was caused by there being a run on the banks. Taking in to account that over the years the people managing before the run on the banks made the bands hundreds of billions of pounds and so Fred Goodwin's bonus was a pittance compared to what he made for the bank. For the amount he made for RBS his bonus would have been the equivalent of less than a minimum wage worker. Had RBS been a food company and Fred Goodwin been a farm owner people and the fair trade organisation would would be demanding he get paid a fair amount but due to the "banker bashing" and misunderstanding of how much RBS' assets are worth they don't. RBS' 2011 assets were almost £600 billion and they had almost £85.5 billion in cash so bankers getting million pound bonuses is barely anything and is an unfair amount not for being too high but for being very low taking in to account they are managing and earning RBS all that money
  • Trsvis_BickleTrsvis_Bickle Posts: 9,202
    Forum Member
    But as my company made a loss last year, guess what? I didn't get a bonus and neither did anyone else even though I and the department I work in met or exceeded our targets for the year. That is how it should work.

    Well, I would say that is rare. I've never worked anywhere where everyone's bonus was conditional on making a profit. Also, when you say 'profit' are you talking about the Group as a whole, where profits in some business units are sufficient to offset losses on others or does every business unit have to be profitable?

    Say you're a salesman, have worked your arse off and exceeded all your targets. If Purchasing have screwed up on a forward contract for, say power, and driven the company into a loss as a result, you'd be pretty pissed off at not getting a bonus. What created the loss was entirely outside your control. Any business that operates like that is not going to attract quality salesmen.

    This is clearly the sort of thing that's happening at RBS. The investment banking arm seems to be doing OK; that's why about half the bonus provision relates to those guys. About half of the Group loss is due to provisons for past cock-ups like mis-selling. If you weren't there at the time and had no part in the mis-selling, you'd again be pretty miffed at being penalised for it.
  • Glawster2002Glawster2002 Posts: 15,189
    Forum Member
    ✭✭
    mseven1 wrote: »
    Just because RBS made a loss doesn't mean they performed bad. If they had other people it mightn't have performed as well as it has.

    It comes back to the issue that they got a fair share. The economic crash was caused by there being a run on the banks. Taking in to account that over the years the people managing before the run on the banks made the bands hundreds of billions of pounds and so Fred Goodwin's bonus was a pittance compared to what he made for the bank. For the amount he made for RBS his bonus would have been the equivalent of less than a minimum wage worker. Had RBS been a food company and Fred Goodwin been a farm owner people and the fair trade organisation would would be demanding he get paid a fair amount but due to the "banker bashing" and misunderstanding of how much RBS' assets are worth they don't. RBS' 2011 assets were almost £600 billion and they had almost £85.5 billion in cash so bankers getting million pound bonuses is barely anything and is an unfair amount not for being too high but for being very low taking in to account they are managing and earning RBS all that money

    The economic crash wasn't caused by "a run on the banks" at all, the problems at the banks were caused by the massive financial mis-management of people like Fred goodwin. although you obviously hold him in high regard I would suggest you do a search on why he was stripped of his peerage.
  • Glawster2002Glawster2002 Posts: 15,189
    Forum Member
    ✭✭
    Well, I would say that is rare. I've never worked anywhere where everyone's bonus was conditional on making a profit. Also, when you say 'profit' are you talking about the Group as a whole, where profits in some business units are sufficient to offset losses on others or does every business unit have to be profitable?

    Say you're a salesman, have worked your arse off and exceeded all your targets. If Purchasing have screwed up on a forward contract for, say power, and driven the company into a loss as a result, you'd be pretty pissed off at not getting a bonus. What created the loss was entirely outside your control. Any business that operates like that is not going to attract quality salesmen.

    This is clearly the sort of thing that's happening at RBS. The investment banking arm seems to be doing OK; that's why about half the bonus provision relates to those guys. About half of the Group loss is due to provisons for past cock-ups like mis-selling. If you weren't there at the time and had no part in the mis-selling, you'd again be pretty miffed at being penalised for it.

    And yet the company I work for is the largest telecoms equipment manufacturer in the world and is ranked in the top three in terms of sales and installed base in every sector it operates in, so obviously it does attract "quality salesmen".
  • mseven1mseven1 Posts: 995
    Forum Member
    ✭✭
    The economic crash wasn't caused by "a run on the banks" at all, the problems at the banks were caused by the massive financial mis-management of people like Fred goodwin. although you obviously hold him in high regard I would suggest you do a search on why he was stripped of his peerage.

    I am not holding Fred Goodwin in high regard. That is like me saying you don't support fair trade. He was doing his job and if you take in to account he left RBS probably in a better way in terms of assets and value of RBS than when he came in then it's understandable he would get a bonus but that bonus was very low if you take in to account that when UKFI invested in RBS the assets and money owed to RBS in loans was at around £950 billion.

    The run on the bank caused money to leave all banks. RBS was the biggest bank in the UK so it was understandable they would be effected more than others. If it was just down to the RBS management then it would have effected only companies in the RBS group but instead it was all banks that were effected and as the run on the banks happened in other countries this caused losses other banks in other countries too.
  • Trsvis_BickleTrsvis_Bickle Posts: 9,202
    Forum Member
    And yet the company I work for is the largest telecoms equipment manufacturer in the world and is ranked in the top three in terms of sales and installed base in every sector it operates in, so obviously it does attract "quality salesmen".

    You're missing the point.

    People expect to be judged and rewarded on what they do to influence factors that they can control. There's no point in setting somebody objectives about things over which they have no influence. Indeed, you're better off not setting objectives at all if you're intending to do that.
  • mseven1mseven1 Posts: 995
    Forum Member
    ✭✭
    You're missing the point.

    People expect to be judged and rewarded on what they do to influence factors that they can control. There's no point in setting somebody objectives about things over which they have no influence. Indeed, you're better off not setting objectives at all if you're intending to do that.

    Taking I account the amount they are making for the company the bonuses are actually very little.
Sign In or Register to comment.