do you think they will quit?
- Thread starter mattheman
- Start date
It's an odd situation.
As majority shareholders, we should really be expecting the board to do their best to maximise profits - eg keeping the best investment bankers. Lets face it, even though it's irritating to see people who have caused joe public so much misery getting millions in bonuses - at the end of the day we will only ever get the money we put in back if they start to make obscene profits again.
As majority shareholders, we should really be expecting the board to do their best to maximise profits - eg keeping the best investment bankers. Lets face it, even though it's irritating to see people who have caused joe public so much misery getting millions in bonuses - at the end of the day we will only ever get the money we put in back if they start to make obscene profits again.
Didn't RBS make a loss last year, following on from record losses for a British corporation in 2007? Meanwhile all their competitors made a profit. On what basis is this increase in bonuses justified?
I don't think they'll quit - they'll work out a compromise with the government, maybe only pay £1bn in bonuses instead of £1.5bn.
I don't think they'll quit - they'll work out a compromise with the government, maybe only pay £1bn in bonuses instead of £1.5bn.
Man of Honour
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Precisely, and these profits will have to be made by people who take a gamble or two..
It's amazing then whilst the economy was strong, growing and prosperous; everyone was quite happy to reap the benefits of their work. People were quite happy to borrow money to fund their second home investment or 42” plasma TVs, for example. So when things don't go so well, we then expect blood. I understand the anger that these banks have been bailed out, but without them, were pretty much doomed. Every business needs to make a profit. The banking sector is no different apart from the fact that it has a direct impact on all of us.
I don’t agree that the top fat cats receiving big bonuses However, I do agree that those that strive to make our economy stronger is of a benefit to us all and they do deserve a share in the profits that they make. To punish them would be like biting the hand that feeds us.
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Even if the company as a whole made a loss it would be pretty unfair to not pay bonuses to workers who have hit the criteria they need to. I've never in my life seen a bonus scheme where the bonuses are hit x target but if the company isn't profitable you get nothing.
I don't understand why people are so unhappy with these bonuses, yes the bank lost money, yes they got bailed out. At the end of the day though it's a company with normal people working for it who go to work 9-5, do their job and aim for the targets the company sets forth for them.
If anyone here went to work, hit all their targets and didn't get their promised bonuses for doing so there would be a thread on here with everyone telling them to ring the CAB. It can't go both ways, either the bank exists, has targets and pays bonuses when the workers hit those targets or it folds completely.
The company as a whole made a loss, but the investment arm was quite profitable. Why shouldn't those who make money for the tax payer be rewarded...
Who Cares. They have massed theor own fortunes over the welfare of the bank that they dont need to work..
To support the areas that didn't make a profit, at least for a little while until the company they royally screwed up is completely back on it's feet ..
These are discretionary bonuses - at no point has anyone in the government argued that people shouldn't get what they are contractually entitled to. I guess you must work in the financial services industry, because in the real economy I've never heard of a discretionary bonus being paid out if the overall group isn't profitable. For whose benefit is the company being run - the employees or the shareholders?
Just a thought, maybe the best way of increasing shareholder value is to sell the investment banking arm of RBS?
Selling the bit of the business that makes money is the best way to increase shareholder value? How exactly will RBS shares be valuable after that?
Can see both sides: At a basic level it sticks in the throat that a public funded, massively in debt institution should pay any bonuses until they sort themselves out as whole. On the other hand, contrary to some of the views on here, many of the potential bonus recipients will not 'have created the problem in the first place' and should have some incentive to turn things around by doing their jobs well.
Caporegime
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People are stupid, its not cut and dry, the guys making the big bonus's could have, for all you know, saved this country billions of pounds by preventing the bank collapsing.
If one guy gets 1million in bonus's, but made the bank 15million, does he not deserve it? If he quits, gets a job and makes another bank 15million next year, the bank hasn't saved 1million, its lost 14 million and a good worker.
No, people who haven't met their targets shouldn't get bonus's, but people who have, should.
what if the 1.5billion is all going to the guys who brought in 20billion, and they all leave, next year the only guys left are the other ones who made a 40billion loss, you've got guys who won't get bonus's, but will also bankrupt the bank and lose us, the taxpayer, a lot of money in the process.
Stop being naive, just because a bank itself losses billions, doesn't mean there aren't those within the bank that didn't make a profit and prevent the losses being even bigger. Loss those guys, and it just gets worse. There will even be guys who lost 20million, but in a area of the market where 99% of other bankers lost 50million, he still did good work, he still prevented the losses being as bad as they were, you still want that guy working there and you don't want him to leave over a bonus he's earned and lose out on his future earnings for the bank.
THe problem is absolutely stupid politicians won't explain that, they'll whip everyone up into a frenzy to save a cheap billion now, at the expense of losing every good worker at the bank. Long term is incredibly bad for the bank, but right now, the PR victory for politicians is saving the money.
THe problem is, with the press and politicians not giving out any useful information we don't know who the bonus's are for, great workers or idiots, we don't know what targets were met and what we should be doing.
Bonus culture in general is awful, there were too many handouts of big bonuses when not deserved, but cutting ones that are deserved, hurts the bank more.
The single worst thing that can happen to RBS is all the best people leave because they aren't being paid fairly, crap people walking is fine, but lose the people making money and they, and we are screwed.
If one guy gets 1million in bonus's, but made the bank 15million, does he not deserve it? If he quits, gets a job and makes another bank 15million next year, the bank hasn't saved 1million, its lost 14 million and a good worker.
No, people who haven't met their targets shouldn't get bonus's, but people who have, should.
what if the 1.5billion is all going to the guys who brought in 20billion, and they all leave, next year the only guys left are the other ones who made a 40billion loss, you've got guys who won't get bonus's, but will also bankrupt the bank and lose us, the taxpayer, a lot of money in the process.
Stop being naive, just because a bank itself losses billions, doesn't mean there aren't those within the bank that didn't make a profit and prevent the losses being even bigger. Loss those guys, and it just gets worse. There will even be guys who lost 20million, but in a area of the market where 99% of other bankers lost 50million, he still did good work, he still prevented the losses being as bad as they were, you still want that guy working there and you don't want him to leave over a bonus he's earned and lose out on his future earnings for the bank.
THe problem is absolutely stupid politicians won't explain that, they'll whip everyone up into a frenzy to save a cheap billion now, at the expense of losing every good worker at the bank. Long term is incredibly bad for the bank, but right now, the PR victory for politicians is saving the money.
THe problem is, with the press and politicians not giving out any useful information we don't know who the bonus's are for, great workers or idiots, we don't know what targets were met and what we should be doing.
Bonus culture in general is awful, there were too many handouts of big bonuses when not deserved, but cutting ones that are deserved, hurts the bank more.
The single worst thing that can happen to RBS is all the best people leave because they aren't being paid fairly, crap people walking is fine, but lose the people making money and they, and we are screwed.
Caporegime
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If someone has been told, make us 10 million and you get a 1million bonus, you don't pay it, that guy leaves for somewhere that WILL pay him what he's owed and the banks lost 9million, not saved 1 million.
You don't support area's that did badly, by absolutely throwing away any chance of future earnings.
Remember that guys 10 million, 9 million can already subsidise the other parts of the business, and next year, another 9 million can help pay off debts. If the guy leaves, you get one extra million to pay off debt, but lose 9 million every year for the forseeable future.
Lets say 1000 guys all made 1million, and get a 100k bonus, you can save 10million by not paying them, but if they all leave thats 1 billion in profit you throw away the next year. Its the fastest way to make RBS completely bankrupt and well, not only lose them government and share holders all their money, but also add another 50k people onto the dole.
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You just don't get it, do you?
Allows them to concentrate on the core business - safe and easy banking like retail. Leave the risky stuff to companies that we can afford to let fail. With the cash they get from selling their investment banking arm they could use as capital to cover their bad debts or buy back some shares from the government.
I'm not saying this is the best option, because I don't have enough information to know either way. I just hope it's being considered as an option and the executives aren't letting their egos get in the way.
It might be the core business but it generates very little profit.