DaveO wrote:
And if you read Robert Peston on the BBC even though the government as majority shareholder could have vetoed it the treasury accepted the remuneration committees recommendation because they feared if they didn't Hester and the board of directors would have resigned.
What I want to know is did they threaten resignation or not?
If they did and basically blackmailed Cameron they should have been sacked not given a bonus.
If the treasury just thought it was a risk (i.e. there was no outright threat of resignation) and paid it because they thought they might resign then that is equally unacceptable and shows incredibly weak government from Cameron (as does succumbing to blackmail).
Either way this demonstrates even when the bank is state run bankers can ignore calls from the majority shareholder to curb bonuses and Cameron is weak or has no desire to deal with the bonus culture.
So what if they all resigned? The shares are worth little as it is and their bluff needs to be called at some point or nothing will change.
Put someone in charge who is salaried. There is no need for bonuses in the first place. If you do your job you take home your agreed wages. That is what the majority of us do. Bankers should be no different. The bonus culture of "if we don't pay it they will leave" is just self serving drivel.
That well known independent institution the BBC. Or "Buggers Broadcasting Communism" as it is known............................ What next? Citing Mein Kampf as evidence for social policy?
In terms of the bonus, I have to say I am not privy to the T&C's of his contract etc However, IF he has "turned the bank around" and saved the taxpayer say £50m and IF the terms were he would get 2% of it then good luck to him. That's a net £49m for the treasury (i.e. you and I), job done.
However, I agree that the banks should be split into two.
1- Retail banks - backed by the governement (i.e. you and I) - there to provide a place for savings/mortgages etc
2. Investment banks - backed by no-one - there to do whatever they like
The real issue I have over the bail out of the banks is that the employees of the banks were in a zero lose situation. Play around with money, if they "win" they generate massive profits and reap the associated bonuses. If they lose, well the country cannot afford to let them go bust as it's the "man on the street" who would suffer. There was no effective risk and reward.
Split them into two, guarantee #1, (this will inevitably lead to more modest profits/salaries etc)
If #2 goes bust, then it's their call. No state bail out. Equally good luck to them, pay as much money to their staff as they like. There is no reason for public outcry.
