Stephen Hestor renders to the lynch mob

HAMISH_MCTAVISH

Graham_Devon wrote: »

You appear to be linking the non receiving of a bonus as underperforming.

I perceive a bonus as recognition of great performance. For going the extra length, something extra to that of which I'm actually paid to do.

I don't expect to receive a bonus just for carrying out the duties I receive a salary to carry out..

10 years, and many pay grades ago, I would have agreed with you. A bonus at those low levels was something optional, an extra, a minor thing in the grand scheme of renumeration. Which is no doubt why you still think of it that way.

However today, in a position a fair bit more senior, my "bonus" entitlement is nearly the same again as my base salary.

As companies have become more driven to extract every last drop of sweat, blood and tears from their employees in the name of profit and efficiency, more and more of our pay has become dependent on performance.

Now technically, my "bonus" is discretionary, and has to be signed off by the board. However in practice, this is nothing more than a 'get-out-of-jail free card' for the company in the event I screw up royally yet still somehow manage to meet the KPI's required to hit bonus. A sort of "don't knock up the chairmans daughter" clause. They know and I know that the moment they withhold bonus if I've hit my targets, I'll put my CV out and find another employer willing to pay the going rate, and cost them a lot of money via transitional disruption in the process.

At the start of the year our company lists a set of criteria to achieve "bonus" that year.

What it really means is that half of your pay is dependent on performance.... It's performance related pay.

If I didn't hit at least 50% of my KPI's, and therefore get paid bonus on them, I would be performance managed out of the business in a heartbeat. I would have failed to do my job, and failed to deliver the minimum standard required to keep my job.

In this day and age, getting the component of your pay that is performance related is expected.... Not getting "bonus" is simply being punished for under performing. It's a pay cut for not doing your job properly that year.

The term "bonus" should be banned.... It's no longer any such thing.



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Graham_Devon

HAMISH_MCTAVISH wrote: »

10 years, and many pay grades ago, I would have agreed with you. A bonus at those low levels was something optional, an extra, a minor thing in the grand scheme of renumeration. Which is no doubt why you still think of it that way.

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LOL. I like it Hamish. I like it!

HAMISH_MCTAVISH

Graham_Devon wrote: »

LOL. I like it Hamish. I like it!

So care to debate the issues, or are you going to run away again, which you've been doing a lot of lately.;)

gailey_2

Just wanted to say im kind of shocked and disgusted how poor mans been treated by the media and the labour party.

I think in some industries mainly sales and retail bonses exist as an incentive for them to meet their sales target.

My husbands retail store manager and has to meet all his kpis so basically turn over a profit, boost profits and minimise loss.

Its not just dependant on retail sales.
other things taken into considration is store controllable costs
mystery shop scores.

unless he hits all these things then no bonus.

its paid quarterly but top bonus is
£1200 -100 after tax
middle £600-£400after tax
bottom-£400-300 after tax.

It did used to eb more generous when he joined the company there was 3bonuses running alongside each other

showroom
annual
quarterly

in 2010 they changed the bonus but on the old scheme and the targets he trashed that year as moved to harder bigger turnover store -he lost £18,000!
The company is doing well and he does feel theres no incentive for success
no promotional opportunities.

But retails tough in uk few opportunities out there.

Banking is basically selling products.
so therefore a bonus related to meeting sales targets is hardly unreasonable.

In a commercial business it should be up to the company to decide.

I do agree bonuses have got too big.
welcome bonuses mad
would support long term incentives.
if hubby leaves before bous time he does not recieve his bonus or his share save.

I do wish labour and the public would take senisble step back and realise what they doing.

Anyone know what the rate of tax would be on hester bonus to the treasury?

labour were the ones who bailed out the banks and set no conditions then continually whinged.
What a fab job they did with fred goodwin eh! would say hes far more cuplrible than hester.
They were ones who set ukfi to manage arms reach away from governement.
Said on newsnight tehy should have sorted this ages ago and not let it blow up like this.

Ed milliband is just political opportunism. his side kick chukka and rachel reeve are young, naive and lack experience and just plain embaressing to hear them argue well these people are poor so everyone should be like being in stalins russia! Expect kept unions happy who themselves get huge salaries and bonus!

The way I see it is its labours mess and now they trying to take the credits.

Us the tax payer brought the bank at 50p a share.
its lost more than half its value and dropped 3% to 23p per share

yes there were external factors eurozone, poor growth figures. thay played apart but so did this battle over bonuses.

Would like to point out that im sure peococks are in administration because rbs wont support them much longer.

Basically they have to hold more capital-so less lending and reduction of assets.

They were too big so scaling down sadly means job losses just like public sector.

I think if people could just get thier head out or armageddon mode and outraged socialism and thourght about meduim to long term we have a real chance here to recover

Londons very important financial hun world world wide with latest news that it maybe international hub to deal in chinese yuen currency.

If the muppets in europe introduce financial transaction tax that may drive more companies to london therefore be good for uk.

Lot of european banks exposed to european sovereign debt we have recapitilised our assets and taken the steps needed paying very low bond rates.

We could be slowly on the up. we could sell rbs at a profit if we dont wreck it!

Rochdale_Pioneers

Yes bless him. He's done such a good job getting his bank lending to small businesses as directed by the shareholders, and he's so poorly paid.....

As for the politics, Cameron has to ask why he set such a bear trap for himself. He has realised that the "responsible capitalism" being raise by Labour resonates, so he matched the rhetoric. Then here comes the RBS bonus, which he doesn't dare turn down because his party fundees in the city won't like it.

So plan one is say Labour signed the contract and he has to be paid it. That lasted about half an hour as Myners et al pointed out that the contract stated the bonus was discretionary. So out comes plan two - we tried to veto it and the board said they'd quit, so its not our fault. Then the Chairman turns down his bonus which kind of makes that position an obvious lie quickly exposed.

Only at that point do Labour roll out the plan for a vote. Remember that the previous week Cameron had called for more shareholder power to intervene with the running of companies and remuneration packages. Well in this case he has 81% of the shares and the public whom he hold the shares for aren't happy. To say one thing and do the opposite isn't credible, hence the call for a vote. As it is Hestor has got Cameron off the hook - you have to wonder at which point the phone call from HQ went in to his office.

Lets assume for a moment that Hestor had gotten anywhere near the KPIs for the business - and he hasn't. Is it OK for him to be on multi-millions when the ordinary workers of the company are on low wages and get no bonus and a minimal pay rise if they are lucky? The differential between salaries of the company execs and the rest has grown far far too large. We need to be pulling down pay at the top globally, not letting them pay themselves any sum they like then insist that they pay no tax or they will quit or relocate the company. Cameron says that public sector managers shouldn't be paid more than he does. Yet he seems perfectly happy letting the city pay itself lottery win annual packages.

That his party is almost completely funded by hedge funds and other spivs doesn't have anything to do with his stance does it?

IronWolf

Graham_Devon wrote: »

You appear to be linking the non receiving of a bonus as underperforming.

I perceive a bonus as recognition of great performance. For going the extra length, something extra to that of which I'm actually paid to do.

I don't expect to receive a bonus just for carrying out the duties I receive a salary to carry out.

If it's target based, then its slightly different. I.e. "if you sell 100 loans, you will get £10". But that's not how this bonus is put across. You yourself put it across as expectance just for doing the job, and relate not getting a bonus to underperforming.

But it's far more than this. This is politics. And Hester is in, and knowingly entered a very VERY political bank. Until the taxpayer gets their stake sold off, it will remain political.

You can't just expect a bonus simply for carrying out what you are paid to do. Or at least, hopefully, going forward, this is what will change. You don't see police officers expecting bonuses for going a little further than their contract states. You don't see shop workers expecting bonuses for helping out a customer when their contract states they are actually a checkout operator. Bin men didn't get a bonus for going out of their way in the severe winter conditons last year. Divers didn't get a bonus for diving through the mines in Wales earlier this year. It's the job. You receive renumeration for it.

The expectations of a bonus simply for carrying out ones duty is half the problem. People cannot relate to this. You obviously can. But the majority would find it difficult to relate to the expectance of a bonus just for carrying out your job role.

But what about conversely, if he had royally screwed up? If a "bonus" worked as you wanted it to work, he would receive full pay even though he performed badly, however under this system he would only get a basic salary.

The point of performance related pay is not only to reward good work, its to punish poor performance. Thats why basic salaries are low and the "bonus" or performance related part are so high.

These bonuses work on a sliding scale, they have a max bonus say and depending on earnings growth from 0-20% you get a percentage of that max bonus.

Let's say you earn £20k a year, and tomorrow your boss comes in and says "ok we're changing your pay, from now on your salary is £12k and we will give you an extra £12k bonus if your area performs as well as it did last year". Would you prefer that "easily meetable" bonus, or the salary version?

macaque_2

IronWolf wrote: »

But what about conversely, if he had royally screwed up? If a "bonus" worked as you wanted it to work, he would receive full pay even though he performed badly, however under this system he would only get a basic salary.

The point of performance related pay is not only to reward good work, its to punish poor performance. Thats why basic salaries are low and the "bonus" or performance related part are so high.

These bonuses work on a sliding scale, they have a max bonus say and depending on earnings growth from 0-20% you get a percentage of that max bonus.

Let's say you earn £20k a year, and tomorrow your boss comes in and says "ok we're changing your pay, from now on your salary is £12k and we will give you an extra £12k bonus if your area performs as well as it did last year". Would you prefer that "easily meetable" bonus, or the salary version?

The banks have served:

• Shareholders badly
• Account holders disgracefully (I won't list the number of misselling scandals)
• Small businesses dreadfully
• The economy disastrously

If it does require outstanding capabilities to run a large bank well, it is evident that very few if any of the incumbent management of British Banks are up to the job. Mr Hestor might appear to be 'hard done by' in comparison with his colleagues but that is only because the other rogues who run banks are vastly over paid.

2010

Give up your bonus and get a knighthood (eventually) seems the most likely outcome of all this.

Pennywise

gailey wrote: »

Anyone know what the rate of tax would be on hester bonus to the treasury?

And that's another example of the banker's greed. I think we can safely say it wouldn't have been going through the payroll on his payslip subject to normal tax and NIC! For a couple of decades, the Treasury has been ducking and diving trying to close the loopholes exploited by the banks to avoid paying tax and/or NIC on these massive bonuses. They were paid in gold bullion to avoid NIC, until Treasury stopped it, then they were paid in wine, until the Treasury stopped in, then some kind of foreign currency or derivative, etc. The Treasury were trying to hit a moving target for years and the bankers were putting their all into finding new schemes to avoid having to pay tax/nic. There is absolutely no way that the bankers have willingly and voluntarily paid the same tax/NIC that any normal worker would have paid on their bonuses. They've been dragged kicking and screaming into paying the "right" amount of tax/NIC! If it isn't bad enough that the bankers have been getting huge bonuses, it's a disgrace that they tried so hard to avoid paying the right tax/nic on their bonuses.

gailey_2

Some of the rhetoric I agree with however this should have been sorted out ages ago and not been blown up by media and used as political football.

The words fairness are banded about too much for my liking.

If i was an mp I would class my generous expenses and 2nd home as a bonus!
Not to mention subsidided meals at westminister
Also their allowed to work on other jobs at same time!

We the uk decided that it wasent in tax payers interest to nationalise the banks!
The idea is we invest it recovers and tax payer makes huge profits and we share in rbs sucess through dividends and taxation.

Red ed taking on this issue and making it seem simple and demonising rbs is just decreasing the share value brought at 50 nopw worth less than hallf!
Cant remember the exact amount we put in but take that figure half it thats a scary loss for tax payer to be accountable for because ed wanted to try and gain popularity and destroyed teh bank yet they were the ones who set it all up in the 1st place they were not bothered about no lending to small businesses when they were in power darling just used to say they morally wrong but cant do nothing.

I mean what kidn of idiots bails banks out twice yet sets no conditions.
seems they caught between rock and hard place.

We nationalised northern rock and I belive sold to virgin money at a loss!
We dont really want to nationalise rbs.

we need hester to do everything he can to get the business profitable again.

I would maybe once share price recovers back to 50p sell back private but stipulate a annual bonus of 5/10years after and ensure bankers pay appropriate tax on bonues.

I think bonus subject to corporation tax.
maybe salaries should be increased and bonus less then 50%income tax on salaries.
they not self employed wonmder how they could fiddle their taxes?

we already have higher taxes than usa so we need to ensure we get fair share but remain competative.

In sales environment its hardly share price that enables bonus so think labour banging on about that quite stupid!

Normally all kpis need to be met in retail its make profits minimise losses., customer service scores lots of things are benchmark for getting bonus.

have read hester has saved rbs money.

think the additional loending always going to be thorney issue.

just wish this bash the bankers game woulkd stop as could hurt the uk.

I dont think should be party political issue we need reasonble concensus on thsi as get this wrong we screwed as we invested a lot.

yes private hedge funds fund torys.

But are unions any better.
they forever greedy demanding more , probably better pensions and union bosses have huge salaries.
Unions also expect something in return!

They ironically were calling for bankers like fred goodwin to be sacked no disiplinary yet the champion employment law when it suits them.

I sometimes wonder if labour cabinet really understand employment law.

At end of day we really cant commnet as dont know what criteria was for current bonuses and if they met it then it should be paid. Then next year restructured as less generous scheme.