RBS chief to get £900,000 bonus

Jennifer_Jane

tartanterra wrote: »

I think the bonus looks appalling in the current climate, but I also think it is wrong to withhold it, if it is enshrined in his contract.

What I would like to see however, is Mr Hester pay his fair share of tax on his bonus.

There is something fundamentally wrong with the taxation system when the well paid can use complex tax legislation to reduce their overall tax burden to a percentage below which the poorest paid employees in their organisation are being taxed at.

There isn't much point in trumpeting a headline rate of tax, if in reality, dozens of routes are in existence to avoid it.

I obviously agree with your post, but re your last paragraph, these routes are available to everyone: ie I was a wasn't a senior employee in my last Company, but we all had the opportunity to use part of our bonusses in shares, and part towards our pensions, thus getting the shares completely tax-free after 5 years, and deferring tax on the pension bit.

There were also share saving schemes which aimed to acquire shares tax-free after 5 years too. I'm unsure about Hestor's 2014 shares, as it seems too soon to be acquiring a tax advantage, but wondered if someone else would know.

wolvoman

Going4TheDream wrote: »

Footballers are paid for their skill and their market value will be dependant upon their performance. This is about the indignation that someone paid by the taxpayers, who essentially who has failed to meet targets etc and is paid a handsome salary to do so is then paid a bonus of nearly as much as his salary, when many ordinary taxpayers people are losing their jobs.

It doesn't really sweeten it much that he has agreed only £900000 instead of £1.5m.

Don't be so naive.
See the bit in bold above - how do you know what Stephen Hester's targets are? Have you seen his contract?

And as to footballers being paid on performance, is Mr Torres being paid less because he's performed badly in the last year? No, because he has a CONTRACT.

And ultimately who should earn more, the boss of the company employing several hundred thousand people, who works 70/80 hours a week, who studied hard at school and university for years or the 20-something lad who trains for 10 hours a week, plays a game of football and spends the rest of his time getting tattoos and avoiding rape charges from gold-digging women he's too stupid to avoid falling for?
One of those earns FIVE times as much.

atush

Originally Posted by Going4TheDream
Footballers are paid for their skill and their market value will be dependant upon their performance. This is about the indignation that someone paid by the taxpayers, who essentially who has failed to meet targets etc and is paid a handsome salary to do so is then paid a bonus of nearly as much as his salary, when many ordinary taxpayers people are losing their jobs.

It doesn't really sweeten it much that he has agreed only £900000 instead of £1.5m.

consult the link in post 140/141. See that he met his targets.

good thing you are not being held accountable as you missed yours ;-)

Graham_Devon

Labour are now going all out on this one. Political warfare!

They plan to force a commons vote to strip hester of his bonus. Or, rather, put the current government in a sticky situation.

Although I don't agree with the bonus, I certainly don't agree with this waste of time. Could implode in Labours face too as it's pretty obvious the bonus isn't something they are particularly narked about by the way they keep bringing up David Cameron constantly, it's just one (possible) way to win over public sentiment.

Labour says it will force a Commons vote calling for RBS chief executive Stephen Hester to be stripped of his near-£1m bonus.

It will hold a debate early next month to pressure the government over the £963,000 shares-only payment.

Although not binding, the vote could put the coalition under further pressure to intervene.

The government said it would have caused "chaos" if it had blocked the bonus at the part-publicly owned bank.

A Labour source told BBC political correspondent Vicky Young that David Cameron and the government had failed to act and it was right for Parliament to voice its opinion.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Labour are now going all out on this one. Political warfare!

They plan to force a commons vote to strip hester of his bonus. Or, rather, put the current government in a sticky situation.

Which should backfire spectacularly, given that it was Labour that agreed his contract with these incentives in it.

HAMISH_MCTAVISH

And I see Graham still hasn't responded to the below......

Graham_Devon wrote: »

Joe Public ARE angry. They can't quite understand 3 things.

Given that the average IQ is only 100, I'd suggest there are far more than just 3 things Joe Public can't quite understand....

But anyway.

1) Why a bonus has now become a "right" as part of the pay year after year, absolutely regardless of how profitable or non profitable the business is

Nonsense.

There will be specific performance measuring targets he has to hit for the different components of a bonus. It's how most large companies work, and how most senior managers are rewarded.

In the case of Hester, I'd be surprised if that didn't include significant rewards for shrinking the balance sheet and restructuring/downsizing the bank's operations, as well as just profit/share price.

If he hits none of his targets, he gets no bonus. He clearly has hit some, but not all, of his targets, and so will get some, but not all, of his bonus.

2) Why he, like all of us, is paid to carry out a job. In his case, he is paid on average £23,000 per week, yet this is simply pushed to the side, and he appears to get a bonus, which equates to around £20,000 per week, JUST for carrying out the job he is paid £23,000 a week to do.

You don't see brain surgeons expecting a bonus for every patient they save. You don't see MP's expecting a bonus for every decision they make, or being asked to speak. But you DO see bankers seemngly expecting a bonus SIMPLY for carrying out what they are paid hansomly to do.

It just doesn't work like that Graham.

The going rate for a bank CEO, as I've posted earlier, is many millions of pounds a year. Now if you're going to pay anyone millions of pounds a year, you'll want to make sure that there are performance related targets for them to hit, and that part of their pay is linked to hitting those targets.

It's that simple.

It's the disconnect between not only the ordinary folk earning what Hester earns in one single day in a whole year....but the disconnect even with what we would class as highly paid individuals.

Top bankers are on a whole new level of numeration, expectations and outright greed and contempt. Someone on the BBC comments section worked out that even if you worked at 35k each year for 45 years, you STILL wouldn't earn as much as Hester has in ONE single year. Hence the disconnect is simply massive. Somewhat distasteful in some ways, especially in light of the current conditions of the bank and the economy and whats expected from everyone else.

And that little rant just veered right into the politics of envy.

3) This bank caused massive financial losses for ordinary folk up and down the country.

Not under Hester.

this bloke makes some decisions, gets paid to make them and then EXPECTS a bonus.

If only it was that easy Graham......

There's an awful lot of bravado going on from some armchair CEO's in this thread, but the fact remains that only a dozen or so out of the 60 million people in the UK are qualified to run a bank of that size, and most of them would cost the taxpayer a whole lot more than we pay Hester.

It is patently absurd to suggest that performance related pay is a bad thing. In fact, I would like to see more people paid based on performance, not less.

What is clear however is that the average member of public, like you Graham, has absolutely no idea how it works.

So get rid of the word "bonus" entirely, and describe it in terms of "penalties" instead.

In the case of a bank CEO, that could look something like the following:

Total salary eligibility if you hit all your targets = £3,000,000.

Penalty for failing to achieve share price targets, £500,000.

Penalty for failing to achieve lending targets, £500,000.

Penalty for failing to achieve restructuring targets, £500,000.

Penalty for failing to achieve balance sheet targets, £500,000.

Which is already the case in reality, but clearly it's not explained very well as some folks just don't seem to get it....:cool:

atush

Graham_Devon wrote: »

Labour are now going all out on this one. Political warfare!

They plan to force a commons vote to strip hester of his bonus. Or, rather, put the current government in a sticky situation.

Although I don't agree with the bonus, I certainly don't agree with this waste of time. Could implode in Labours face too as it's pretty obvious the bonus isn't something they are particularly narked about by the way they keep bringing up David Cameron constantly, it's just one (possible) way to win over public sentiment.

Complete twaddle,

Who hired Hester? It was my impression from new accts it was labour. Who negotiated the contract. Which he has worked under. And done what was asked.

If you ask me are top CEOs paid too much, I might agree.

But if you agree to hire someone, and pay someone x, and x+ for bonus, make sure you remember that you have to pay them when they do? And no whinging???????????????????????///

Thrugelmir

HAMISH_MCTAVISH wrote: »

Which should backfire spectacularly, given that it was Labour that agreed his contract with these incentives in it.

Apparently not.

However Labour would look foolish if Hester walked. As there's plenty of other non UK banks who would happily employ him.

The media rants about the banks, however only 3 in the top 20 are UK based. The remainder are foreign owned.

So Hester will only have a short walk.

atush

Cutting off your Nose to Spite your face?

Rinoa

Hester gives up £1M bonus.

http://www.bbc.co.uk/news/uk-16783571