Friday, 27 January 2012

They are a load of bankers

The new CEO Stephen Hester of the (83% owned by the public) Royal Bank of Scotland earns £1,200,000 a year. His bonus this year is £963,000 of bank shares. Down from a £2,000,000 in bank shares bonus from last year. His pension pot has not been disclosed. So that's a cool £40,348.61 per week.

However will Hestor be able to manage.

Stop Press.
Sir Philip Hampton, chairman of Royal Bank of Scotland, has turned down £1.4m in shares, in stark contrast to the position taken by his chief executive on bonuses. Sir Philip was awarded 5.17m shares on top of his salary. Sir Philip’s decision to sacrifice it comes at a difficult time for the bank, with its chief executive Stephen Hester awarded a near £1m bonus on top of his £1.2m salary.

Stop Press.
Stephen Hester has now turned down the award of a near £1m bonus.

Stop Press.
It was revealed yesterday that £35.54m and counting is the total remuneration package so far that Mr Hester has received since joining RBS in 2008.

Hesters previous experience was as CEO of British Land with a property portfolio including a large amount of property (£4.1 billion) which has been purchased from and leased back to major retailers such as Tesco, Sainsbury's, House of Fraser and Asda. British Land has also been involved in Broadgate, since 1984 which is one of the largest development projects in London and is still incomplete. In October 2011, the company was placed in the number one position on a list of FTSE 100 companies that use tax havens for their operations.

More than 100 senior bank executives at the Royal Bank of Scotland were paid more than £1 million each in late 2010. The CEO Stephen Hester got £8 million in payments for the year.  Total bonus payouts reached nearly £1 billion. The bailed-out bank reported losses of £1.1 billion for 2010. The bankers were getting their bonuses, because the 2010 figure was an improvement on the loss of £3.6 billion in 2009 and the record-breaking £24.1bn loss in 2008. The bonuses for all other staff in 2010 topped £950 million.

Are you feeling the pinch, could you do with a pay rise? Are you retired, and your pension pot is leaving life a bit on the frugal side? Been given the run around by your bank whilst the bankers enjoy another round of huge bonuses once again?

Feel that there is not much you can do about it - or is there?

Do you remember Nicholas "Nick" Leeson a former derivatives broker whose speculative trading caused the collapse of Barings Bank, the United Kingdom's oldest investment bank. Leeson made speculative trades that at first made large profits for Barings. Of around £10 million, which accounted for 10% of Barings' annual income. He earned a bonus of £130,000 on his salary of £50,000 for that year.

Nicholas "Nick" Leeson paid the price and was sent to prison.

Contrast that with Sir Frederick "Fred the Shred" Goodwin. In October 2008, Goodwin officially announced his resignation as Chief Executive of Royal Bank of Scotland and to go into early retirement, effective just a month before RBS announced that its 2008 loss alone totalled £24.1bn, the largest annual loss in UK corporate history. His image was not enhanced by the news that emerged in questioning by the Treasury Select Committee of the House of Commons in 2009, that Goodwin has no technical bank training, and has no formal banking qualifications.

Sir Fred the Shred was also paid a price, a £703,000 pension.

Goodwin's pension entitlement was a fund of £8. However it had been doubled, to a notional fund of £16m. Lord Myners revealed that the reason Goodwin's pension was so large was that RBS treated him as having joined the pension scheme from age 20 instead of 40, when he actually joined. 

Following negotiation an agreement was reached between RBS and Goodwin to reduce his pension to £342,500 a year after he took £2.7m tax-free lump sum. The agreement followed the completion of RBS' "internal inquiry" into Goodwin's conduct, which found no wrong-doing.

In 2010 Fred bought footballer Graeme Souness's former home. In 2011, Goodwin moved out of the home after being asked to leave by his wife. The move followed media revelations of an extra-marital affair with a colleague at the Royal Bank of Scotland.

So Fred was even sticking it to his colleagues so to speak!

An ePetition approved by No 10 to ensure that honours are awarded for "public services" only is available for signature here if you support the sentiments expressed in it.
It is of course right that persons who have given outstanding service to the nation and or their local communities, or charities, should be recognised for achievements and dedication. However the current system of honours seems rather antiquated. References to the "British Empire" may not still be relevant, or even appropriate, today. The same might apply to the creation of new hereditary titles, since the honour is bestowed for personal achievement, not that of one's ancestors. Finally the system of selection should show some transparency, and must not be open to abuse for political ends.
However, if you feel that Goodwin and others should be taken to task about their actions. An ePetition approved by No 10 is available for signature here if you support the sentiments expressed in it
An ePetition requesting the government to investigate all banks and bankers that caused this financial meltdown in the uk, and then to bring criminal charges against them, so they can then be tried by the courts with a jury of there peers and if they are found guilty then they should face at least 10 years jail time.
 There is a rich seam of ePetitions on the same subject here is a small selection.
An ePetition approved by No 10, Ban Bankers Bonuses here
An ePetition approved by No 10, Make Bankers Pay here
An ePetition approved by No 10, Tax The Bankers Bonuses here
An ePetition approved by No 10, Bankers Bonuses To Go To Charity here
An ePetition approved by No 10, Bring Bankers to Justice here
If I was to create an ePetition it would go something like this:

We the undersigned petition the government to arrest all bankers and British Waterways senior executives. After a "Mugabe in Harare" style show trial with level guilt being measured on the level of pay, pension and bonus compared to the statutory minimum wage. To resurrect the principals of Judge Jeffrey's. By re-introducing the penalty of transportation to to penal servitude on the Island of Rockall for those found guilty of minor offences. Those found guilty of more serious breaches of the law it will be transportation to penal servitude for life in the Falkland Islands working on penguin counting research.
Jeffreys' notoriety comes from his actions, after Monmouth's Rebellion. Jeffreys was sent to the West Country to conduct the trials of captured rebels. The trials, later known as the "Bloody Assizes", Jeffreys issued sentences to defendants. About 300 were executed, and between 800 and 900 were transported to the West Indies.
Rockall is an extremely small, uninhabited, remote rocky islet in the North Atlantic Ocean. The United Kingdom declared Rockall to be part of Inverness-shire, under the terms of the Island of Rockall Act 1972.
A story about how banking works.

Young Fred bought a donkey from a farmer for £100. The farmer agreed to deliver the donkey the next day. The next day he drove up and said, 'Sorry son, but I have some bad news. The donkey's died.' Fred replied, 'Well then just give me my money back.' The farmer said, 'Can't do that. I've already spent it.' Fred said, 'OK, then, just bring me the dead donkey.' The farmer asked, 'What are you going to do with him?' Fred said, 'I'm going to raffle him off.' The farmer said, 'You can't raffle a dead donkey!' Fred said, 'Sure I can. Watch me. I just won't tell anybody he's dead.'

A month later, the farmer met up with Fred and asked, 'What happened with that dead donkey?' Fred said, 'I raffled him off. I sold 500 tickets at £2 each and made a profit of £898' The farmer said, 'Didn't anyone complain?' Fred said, 'Just the woman who won. So I gave her the £2 back.

Sir Fred the Shred, has now  retired from the Royal Bank of Scotland .


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