Comments on: CEO’s Report to UK shareholders

By: mad tony

mad tony — Thu, 26 Feb 2009 19:48:14 +0000

Half of my submisson has gone missing! C’est la vie.

By: alan jutson

alan jutson — Tue, 24 Feb 2009 10:27:29 +0000

Andy
Just to be clear I am not against bonuses at all.

Of course what you say all makes sense, its just the scale of the bonuses which is out of squew.

The Client or Bank take all of the risk with Millions of pounds invested in the expectation of profit, for which (in the case of a client) it pays the Bank a significant fee, even if it looses.

In contrast the Trader has no financial risk at all, he even gets paid a good salary (until he looses his job through poor performance), even if he looses the Client/Bank millions.

Surely a Trader is paid a salary in the expectation that he will make his Bank a profit no one should be employed in the expectation of a loss.
Sure motivation in the form of a bonus encourages some people to work harder, but your example suggested 10 TIMES salary was Ok.
Sorry but I simply do not agree, I think it encourages recklessness, and I think the market (Banking Industry) as a whole will eventually stop paying such large bonuses in the future.
If this is the case then his opportunity to go elsewhere will be limited.

The poor percentage performance of many Insurance Companies Investments and Pension Funds can be contrasted to the money which the Traders and Banks have up until now made out of the trading of those same Investments.

No I do not have any Political connections.

By: brian kelly

brian kelly — Tue, 24 Feb 2009 10:05:39 +0000

I do not do, nor ever have done, anything at all remotely incredibly political. I am an engineer working in industrial automation on the computerisation of machines and processes. I have done this for 50 years up to my retirement working both for large companies in this area throughout Europe and then running my own small company. You are right, though, I know little about the more arcane areas of banking. What I do know is that 10′s or even 100′s of thousands of people are being put out of work and companies being made bankrupt through no fault of their own by the climate of collective recklessness of many banks of which RBS is one of the main culprits. Where are the bonuses for these recently unemployed people, many of whom have also unique skills but enjoyed no grotesque bonuses even whilst in work? The banks were, of course, not the only culprits to the sad fate of our country – it goes much higher than them. We, the ordinary taxpayer, are now propping up RBS and others because of their grotesque losses and I say no bonuses even at the cost of X moving on.

By: Andy Strang

Andy Strang — Tue, 24 Feb 2009 09:11:50 +0000

Adam. No, bonuses aren’t a form of tax avoidance – they are taxed and have national insurance paid on them like any other salary element.
I’m sure there would be lots of potential employees lining up at the door but firstly, they may not be good enough, and secondly there may not be a door.

I will try and break this down one more time to make this easier:

Pension Funds and Insurance Firms and suchlike all have millions to invest, not to be greedy but to enable them to cover their long term liabilities. Companies also have money to invest in order to hedge risks – of currency exchanges or oil price increases or prices of orange juice. Many things.
Banks conduct this trading on behalf of their clients and make money from this. If you don’t enable state owned banks to pay decent bonuses then traders and sales staff who deliver profitability to the bank by servicing these clients will take the relationships elsewhere. Even if they don’t take the clients with them at first, clients like to work with trading teams who have experience and understand how best to trade on their behalf.
These clients will therefore leave RBS or any other state owned bank and direct their business through other banks – it is really easy – just the flick of a switch to change your broker nowadays – and RBS and co would now be even less profitable than they are now.
I don’t work in a bank and I don’t get a fat bonus but I appreciate why they do and why you need to reward staff who are delivering value for your business. Banks aren’t fools – if this work could be done by any 15 year old off the New Deal scheme then they would hire these kids and not pay our huge amounts to traders.
Does this make sense?

By: mike stallard

mike stallard — Tue, 24 Feb 2009 07:20:09 +0000

Crisis?
What crisis?

By: mike stallard

mike stallard — Tue, 24 Feb 2009 07:17:47 +0000

The problem here, as adumbrated above, is that the government has absolutely no intention of stabilizing the currency! On the contrary, it wants to borrow more and to mint money so that it can meet some of its bills as cheaply as possible.
We are well into IOU and pawnbroker territory. Our income is falling fast and our earning capacity even faster.
The gold standard would mean – horror on horror’s head! - that the government would not be able to borrow and would fall prey to a cash flow crisis.
That comes a couple of years down the line when the Zimababwe/Weimar catastrophe has happened.

By: jim

jim — Tue, 24 Feb 2009 06:19:51 +0000

These traders have been destabalising the world for too long. Giving traders the opportunity to gamble with depositors funds is irresponsible. To determine if someone is a good trader might take 30 years or more, the simple fact is they could be lucky for a few years then lose more than they ever made. But previous bonuses are never repaid, so gambling pays off.
What we are seeing today is that money is being transferred from the productive and prudent to the black holes on the banks balance sheets, with bonuses paid. At this rate capital in Britain will soon disappear, leaving nothing with which to rebuild.

By: Steve Tierney

Steve Tierney — Tue, 24 Feb 2009 01:49:39 +0000

How does the song lyric go:-
“I started a joke that started the whole world crying.”

It isn’t funny. We should all feel like crying.

What the government is going is nothing short of economic suicide. Although I agree with your principle point, I don’t think even you are painting this picture its proper shade of black.

I’d love to say: “This is all going to end in tears,” but in good conscience I can’t. That would be the optimistic ending, and we’re long past that already.

By: adam

adam — Tue, 24 Feb 2009 00:19:14 +0000

isnt the reason they are paid in bonuses to avoid taxation.
The bonus is effectively a salary.
Im sure there would be plenty of potential employees lining up at the door when the markets turn around again. Until then the bank has to cut costs.

By: bill

bill — Tue, 24 Feb 2009 00:00:03 +0000

You’re often been portrayed in the press as humourless – but I think that this is brilliant satire.

Thanks