RBS Boss to get £1m share bonus?
Discussion
ninja-lewis said:
paddyhasneeds said:
Presumably the bonus criteria were agreed contractually in advance? I'd be interested to know what they are.
It's easy to yell thieving bankers, but surely a bonus is separate from salary, and by definition is a reward for achieving something specific and measurable?
All in last year's Annual Report.It's easy to yell thieving bankers, but surely a bonus is separate from salary, and by definition is a reward for achieving something specific and measurable?
Bonus to be paid in shares, not share options. Shares will be set aside at end of performance year and will be subject to clawback until 50% shares vest after 12 months and 50% after 24 months. All shares to be held for 6 months post vesting.
Maximum bonus to be 375% of salary. Salary is £1,219,000.
Performance measured on a scale of 0-100%. 4 areas assessed:
RBS Annual Report said:
• Relative Total Shareholder Return (“TSR”) (25%);
Relative TSR provides a direct link between the rewards received by executives and the returns achieved for our shareholders. For this reason this metric has been retained unaltered from previous years.
• Core Bank Economic Profit (25%);
Economic Profit measure will focus on the
Core bank. Economic Profit, being a risk-adjusted financial measure, is consistent with adherence to the FSA Code, and also provides a balance between measuring growth, and the cost of capital employed in delivering that growth. At the end of the performance period for these awards, the value of the Group will be largely determined by the ability of the Core bank to generate enduring value for shareholders. For this reason, Economic Profit is based on the core bank.
• Balance Sheet & Risk (25%)
Resolution of Non-Core and development of the Group’s risk profile consistent with being a highly rated standalone bank are fundamental to our strategy. These are therefore measured under a separate Balance Sheet and Risk measure under the LTIP.
• Strategic Scorecard (25%)
To ensure that the Group is positioned to deliver sustainable value for shareholders beyond the initial turnaround timeframe, the balanced scorecard rewards management for delivering a robust basis for future growth in terms of the strength of our franchise, efficiency, reputation, and the strength and engagement of our employees.
Finally, there is an underpin whereby awards will only vest if the Committee is satisfied that risk management during the performance period has been effective and that financial and non-financial
performance has been satisfactory in line with the Group’s Strategic Plan. In assessing this, the Committee will be advised independently by the Board Risk Committee.
By my calculations, I think the Board awarded Hester 21/100 for 2011.Relative TSR provides a direct link between the rewards received by executives and the returns achieved for our shareholders. For this reason this metric has been retained unaltered from previous years.
• Core Bank Economic Profit (25%);
Economic Profit measure will focus on the
Core bank. Economic Profit, being a risk-adjusted financial measure, is consistent with adherence to the FSA Code, and also provides a balance between measuring growth, and the cost of capital employed in delivering that growth. At the end of the performance period for these awards, the value of the Group will be largely determined by the ability of the Core bank to generate enduring value for shareholders. For this reason, Economic Profit is based on the core bank.
• Balance Sheet & Risk (25%)
Resolution of Non-Core and development of the Group’s risk profile consistent with being a highly rated standalone bank are fundamental to our strategy. These are therefore measured under a separate Balance Sheet and Risk measure under the LTIP.
• Strategic Scorecard (25%)
To ensure that the Group is positioned to deliver sustainable value for shareholders beyond the initial turnaround timeframe, the balanced scorecard rewards management for delivering a robust basis for future growth in terms of the strength of our franchise, efficiency, reputation, and the strength and engagement of our employees.
Finally, there is an underpin whereby awards will only vest if the Committee is satisfied that risk management during the performance period has been effective and that financial and non-financial
performance has been satisfactory in line with the Group’s Strategic Plan. In assessing this, the Committee will be advised independently by the Board Risk Committee.
RBS said:
The maximum potential allocation of shares in respect of the 2011 financial year under Share Bank will be 6.0 million shares for the Group Chief Executive and 3.75 million shares for the Group Finance Director. These allocations were agreed following consultation with shareholders at the beginning of 2011. The potential allocations represent normal maximum annual incentive levels for executive directors based on the share price prevailing at the start of the consultation period and will be assessed for final allocation in 2012 on that basis. Depending on share price movement during the performance period, the value of the final allocation could further increase or decrease.
Between 0% and 100% of the maximum potential allocation will be formally allocated into Share Bank in March 2012 based on 2011 performance across five performance categories: strategic direction;
business delivery and financial performance; stakeholders including delivery against UK government lending commitments; risk and control; and capability and development. Fixing the number of shares
in this way avoids unintended consequences arising from share price volatility around award dates and provides a clear alignment with shareholder interests through the year
Between 0% and 100% of the maximum potential allocation will be formally allocated into Share Bank in March 2012 based on 2011 performance across five performance categories: strategic direction;
business delivery and financial performance; stakeholders including delivery against UK government lending commitments; risk and control; and capability and development. Fixing the number of shares
in this way avoids unintended consequences arising from share price volatility around award dates and provides a clear alignment with shareholder interests through the year
Edited by ninja-lewis on Thursday 26th January 23:05
ukwill said:
The first 3 points sound like you really can't be arsed. Meaning you must be somewhat comfortable with their shyte. If they were that shyte, you'd have moved by now.
They're s
te now because he's in the hole to them for a couple of bar and they won't extend but they weren't shote when the same people in the same branches were lending the money on better terms than elsewhere. 
crankedup said:
He was entitled to 2 million bonus for 2011 performance achievement. He has been gracious and accepted just less than half of that. A pittance when compared to other bank bosses.
Several times what the CEO of the Bank of China gets in total.Who would of been shot if he ran his bank as badly as Western bankers did.
The trouble is with the government owning RBS is that it is in the public interest now, just like the money spent on Lambeth Council's diversity coordinators and Birmingham's Coast Guard. One of the many reasons nationalised industries don't work. With banks, just as with coal mines, ship builders or car makers. That's exactly why it should never have been nationalised in the first place.
Get it back in private hands and they can pay people as much as they like. Sure you still might get the odd bitter whinge from the Daily Mirror, but I could put up with that for £2 million a year.
As for selling it now at a loss, it's better than keeping it at an ever accumulating loss that will eventually bankrupt the whole country.
Get it back in private hands and they can pay people as much as they like. Sure you still might get the odd bitter whinge from the Daily Mirror, but I could put up with that for £2 million a year.
As for selling it now at a loss, it's better than keeping it at an ever accumulating loss that will eventually bankrupt the whole country.
thinfourth2 said:
I know the solution
Fire the current boss and replace him with Gordon Brown
Then the left can't complain about him being paid too much
He saved the world so th RBS will be easy
And it will be a great giggle when it goes tits up
No thanks, I quite like my job....Fire the current boss and replace him with Gordon Brown
Then the left can't complain about him being paid too much
He saved the world so th RBS will be easy
And it will be a great giggle when it goes tits up
As for a quarter mil for middle managers - really? What sort of middle manager - can you give an example, or the salary grade you mean? Cause I personally know global department managers that are on nowhere near that, although the benefit account is nice. They've also been there years, so should be on more than a new starter coming in at the same level (which I've never seen happen in the divisions I spend my working week in)
What does the fat prat actually do for his money? Swan around his expensive offices or in his chauffeur driven car, rubber stamping plans his underlings have put together. Any idiot with half a brain could do it. It is not only not worth the money but yet another example of the gross waste and skewed bureaucratic reasoning which is endemic in our public sector, now including the banks.
cardigankid said:
What does the fat prat actually do for his money? Swan around his expensive offices or in his chauffeur driven car, rubber stamping plans his underlings have put together. Any idiot with half a brain could do it. It is not only not worth the money but yet another example of the gross waste and skewed bureaucratic reasoning which is endemic in our public sector, now including the banks.
If you have no idea what the bloke does, how can you possibly begin to know whether what he is doing is worth the money or not?Or couldn't you help yourself?
The problem here isn't so much Hester as the "bonus" structure throughout all of the banks and some other aspects of the financial industry. Bonuses are always going to rise because the people setting them are the same people getting them. There's no defense in saying that these people are global bosses and we need to compete with the rest of the world as that will ultimately end in disaster.
There is nothing wrong with good people who perform getting genuine bonuses. Sadly, the bonus now is seen as a entitled right. A few years ago when the 50% tax and more restrictive bonus measures came in salaries got hiked massively - in some cases doubled. Now we are back in the same old bonus culture, only now with inflated basics too.
You only have to look at Goldman's as a prime example. This year their share price comes off something like 40% over the year and their profits were down 40%. Their bonus pool was down 21%!! So they made less, the share price got smashed and they reward themselves by paying out a higher bonus/revenue ratio! If I was a shareholder i would be furious.
You can't blame the bankers; I'd be doing exactly the same thing and milking it for all it's worth but there does need to be guidance from all governments acting together.
You can talk about needing to pay the most to attract the best talent, but that's mostly crap. There is no way that people like Stan O'Neal should be able to steer a company into $8bn of losses and then walk away with $160m in parachute payments, let alone the $150+m he'd earned before that. Dick Fuld? Led Lehman's to bankruptcy and walked away with $250m+ These are people who didn't start anything from scratch and ultimately bear no risk. They take an established business and use the money to leverage up on massively one sided bets.
Don't even get me started on Jon Corzine!!!!!
There is nothing wrong with good people who perform getting genuine bonuses. Sadly, the bonus now is seen as a entitled right. A few years ago when the 50% tax and more restrictive bonus measures came in salaries got hiked massively - in some cases doubled. Now we are back in the same old bonus culture, only now with inflated basics too.
You only have to look at Goldman's as a prime example. This year their share price comes off something like 40% over the year and their profits were down 40%. Their bonus pool was down 21%!! So they made less, the share price got smashed and they reward themselves by paying out a higher bonus/revenue ratio! If I was a shareholder i would be furious.
You can't blame the bankers; I'd be doing exactly the same thing and milking it for all it's worth but there does need to be guidance from all governments acting together.
You can talk about needing to pay the most to attract the best talent, but that's mostly crap. There is no way that people like Stan O'Neal should be able to steer a company into $8bn of losses and then walk away with $160m in parachute payments, let alone the $150+m he'd earned before that. Dick Fuld? Led Lehman's to bankruptcy and walked away with $250m+ These are people who didn't start anything from scratch and ultimately bear no risk. They take an established business and use the money to leverage up on massively one sided bets.
Don't even get me started on Jon Corzine!!!!!
thinfourth2 said:
I know the solution
Fire the current boss and replace him with Gordon Brown
Then the left can't complain about him being paid too much
He saved the world so th RBS will be easy
And it will be a great giggle when it goes tits up
Would be amusing. Fire the current boss and replace him with Gordon Brown
Then the left can't complain about him being paid too much
He saved the world so th RBS will be easy
And it will be a great giggle when it goes tits up
In fairness to Hestor he has taken a high profile job that could well be his last for well below market rates.
Maybe he was crap and wasnt going to get any other job. I don't know.
What I do know is that it must be a shot job. RBS lent to every single debt monkey in the UK, most of whom are under water. They have a shocking UK customer base which they must try and reduce. Add to that the junk that is ABN and the fact that I reckon they still haven't been able to fully work out just what the f
k they bought. It's a turd of a job and the only way to come out a hero is to make the bank worth ten times what it is and that just isn't possible.
They should have chopped all these banks up into bite sized units and given them to other banks or entities to run on a 10 year buyout and 50% revenue share.
As for someone mentioning paying middle managers quarter of a bar. Well this is what happens when you cant offer bonuses to keep your wage bill and risk down.
groak said:
Shinobi said:
Probably has to much debt to move and blames the bank. I no wait we are all managing directors.
I think Haymarket should make them pass some kind of basic English test before they're given PH member status. Does anyone know what this one's second sentence means?shauniebabes said:
anonymous said:
[redacted]
Very few people in other jobs demand to be paid so much they never have to work again if they turn out to be useless.shauniebabes said:
crankedup said:
He was entitled to 2 million bonus for 2011 performance achievement. He has been gracious and accepted just less than half of that. A pittance when compared to other bank bosses.
Several times what the CEO of the Bank of China gets in total.Who would of been shot if he ran his bank as badly as Western bankers did.
Interesting use of the word. Not my business but I would normally assume a bonus is something you get for doing a good job, or in fact doing a better job than was expected. I dont really see why a bonus should be a given seemingly no matter what.
But then if the basic salary isnt that big then a performance based top up, with some element of entitlement to that top up, is surely an OK way of only paying a very large salary if the man does his job. Obviously paying him a lesser salary for doing a duff job.
Otispunkmeyer said:
shauniebabes said:
crankedup said:
He was entitled to 2 million bonus for 2011 performance achievement. He has been gracious and accepted just less than half of that. A pittance when compared to other bank bosses.
Several times what the CEO of the Bank of China gets in total.Who would of been shot if he ran his bank as badly as Western bankers did.
Interesting use of the word. Not my business but I would normally assume a bonus is something you get for doing a good job, or in fact doing a better job than was expected. I dont really see why a bonus should be a given seemingly no matter what.
But then if the basic salary isnt that big then a performance based top up, with some element of entitlement to that top up, is surely an OK way of only paying a very large salary if the man does his job. Obviously paying him a lesser salary for doing a duff job.
They got bonuses for bothering to turn up. Then tried to strike at the idea they might be taken away.
Otispunkmeyer said:
Entitled?
Interesting use of the word. Not my business but I would normally assume a bonus is something you get for doing a good job, or in fact doing a better job than was expected. I dont really see why a bonus should be a given seemingly no matter what.
But then if the basic salary isnt that big then a performance based top up, with some element of entitlement to that top up, is surely an OK way of only paying a very large salary if the man does his job. Obviously paying him a lesser salary for doing a duff job.
They're usually awarded on a fixed scale proportional to performance against certain pre-defined objectives, rather than the kind of bonus given out by a shop owner at Christmas who slips an extra £20 in his staff's pay cheque.Interesting use of the word. Not my business but I would normally assume a bonus is something you get for doing a good job, or in fact doing a better job than was expected. I dont really see why a bonus should be a given seemingly no matter what.
But then if the basic salary isnt that big then a performance based top up, with some element of entitlement to that top up, is surely an OK way of only paying a very large salary if the man does his job. Obviously paying him a lesser salary for doing a duff job.
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