Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:01 pm  

Diavolo Rosso wrote:

Well the news has knocked nearly 5% off RBS's share price today. For the slow ones at the back (Labour supporters) that is a lot more than the £1m you were going to pay Hester.

And since Hester has been in charge, how much has he managed to knock off the share price?

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:13 pm  

Diavolo Rosso wrote:

Yes, very nice passage of text there but the reality is somewhat different.

The pricing of RBS shares will contain a larger element of "political risk" than completely public companies. Political risk is almost universally seen as a negative thing when it comes to investing, because politicians tend to be a fairly thick bunch who are prone to being swept away by populist bowlacks, rather than acting out of cold, hard, logic. Therefore the more influence politicans are deemed to have over the running of a company (generally) the more depressed the share price will become. It has been shown that politicans have more influence over RBS than was previously generally accepted and so the share price has taken a hit. It was the perception of political risk which caused the previous Government to set up UKFI as an arms-length representative of the Government when they invested in RBS.

The same mechanism is at play when pricing sovereign debt - Italy being the shining example. Why do you think they installed a technocratic Government?

The irony of all this of course is that the biggest complaint to come out 2008 was that you had a guy running RBS who knew nothing about banking (supposedly). Now you're all complaining about the Board of Directors and Remuneration Committee being made up of bankers, and of course we now effectively have politicans setting the agenda for the bank (hi George). So all in all I'd say you lot need to make your mind up exactly what it is you want.

What has changed between the opening and closing of the stock market today ?

Very little in terms of Government influence, they already had a huge influence over what happened at the bank with or without the UKFI firewall.

Very little in terms of trade,

Day's Range: 26.37 - 27.45
Last Trade: 26.76 (@ 16.35)
Change: 0.98 (3.53%)
Prev Close: 27.74
Open: 27.45
52wk Range: 17.28 - 49.47

Nothing that won't regain within days when the frightened sellers are outnumbered by the bullshitting buyers.

Its almost a non-story except for the fact that there is a growing resentment towards all financial institutions and their method of remuneration which for all their bravado and apparent indifference can only do them harm.

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:25 pm  

cod'ead wrote:

And since Hester has been in charge, how much has he managed to knock off the share price?

Well its dropped 37% in the past year alone.

I understand Diavalo Rosso is a Salford fan so I guess we can make this argument in Salford terms.

Salford had a coach with a proven track record in Shaun McRae and some people at Salford understood that if you want to compete with the best that means getting the top coaches in and paying them the going rate. Had Salford not paid a good salary for McRae what would be to stop him from simply going elsewhere and finding another club in Super League or the NRL who would.

Now there were some Salford fans that didn't "get it" and were constantly complaining that McRae had done nothing, had taken them backwards and they should get rid of him, they didn't realise that you need the top coaches like McRae to compete.

In the end they succeeded in hounding him out and look at the mess Salford are in now.

Do we want this to happen with RBS?

If Salford had paid McRae a £1 million bonus then perhaps they would be going into the 2012 season with a former Super League winning coach in charge instead of losing him to Hull...

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:35 pm  

When the top bods from RBS are poached by other banks, they will prove that to keep said top bod you need to pay crazy amounts of bonuses. Or will they poach just so they can continue to somehow try to con us into justifying their own crazy bonuses.

I would hope that now RBS and its top guys have done the right thing, Barclays etc... will follow suit and not almost automatically award bonuses. What was it something like 95% get their bonus. In that case it isn't really a bonus and just an extension to salary. Call it that and pay all the correct taxes etc...

Limit pay/bonus/expenses as a multiple of the pay/bonus/expenses of others in the organisation.

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:37 pm  

sally cinnamon wrote:

I understand Diavalo Rosso is a Salford fan so I guess we can make this argument in Salford terms.

Some of us remember himbefore his Gordon Gecko transformation

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:47 pm  

Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: http://www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus....

Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: http://www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus....

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:50 pm  

Matt01 wrote:

Limit pay/bonus/expenses as a multiple of the pay/bonus/expenses of others in the organisation.

I don't see the need to limit pay/bonuses etc, just put a tax on it.

If there is a sufficient tax on it then there is no problem. The private company has the right to pay whatever they want to their employee, if they want to pay a high bonus then lets cream a significant part of it off for the taxpayer.

Of course this might make them decide that they will go elsewhere and take their track record in loss making to damage the Swiss, US or some Far Eastern economy.

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 5:55 pm  

Love the way the Labour supporters are criticising Hester's performance at RBS during a time of massive economic uncertainy in the Eurozone but won't hear a bad word spoken about Brown's performance as Chancellor because 'it woz a global crisis'.

In essence. It's ok to use external factors as an excuse when it suits.

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 6:10 pm  

Ajw71 wrote:

Love the way the Labour supporters are criticising Hester's performance at RBS during a time of massive economic uncertainy in the Eurozone but won't hear a bad word spoken about Brown's performance as Chancellor because 'it woz a global crisis'.

In essence. It's ok to use external factors as an excuse when it suits.

I think a lot of Labour supporters would have concerns over Gordon Brown being paid a £1 million bonus by the taxpayer.

But yes you are right both sides use external factors as an excuse when it suits. The Conservative Party policy in their 2007 conference was to commit to matching Labour's public spending figures for the next three years. Then when there was a global recession and the deficit shot up, they complained about Labour's massive borrowing. Now George Osborne's borrowing plans for the rest of the parliament are HIGHER than Alastair Darling's plans were at the time of the election, when Osborne said that it was reckless borrowing that would destroy the economy.

The Tories are now using exactly the same argument "this is a GLOBAL crisis and we are facing UNPARALLELED uncertainty" that Labour did, but it smacks of hypocrisy from them as they were the ones that whilst in opposition used the argument "it happened on Labour's watch so is Labour's fault".

To be honest though exactly the same happened the other way around in the early 1990s over the pound falling out of the Exchange Rate Mechanism. Neil Kinnock had been calling for the UK to join the ERM for years, Britain finally joined in 1989 and Labour claimed this as a victory that the Tories had finally seen sense, and both parties fought the 1992 election on a platform of committing the UK's economic policy around being in that semi pegged exchange rate system. But when in September 1992, the pound fell out of it, the ERM disaster got painted by Labour for the rest of John Major's parliament as "proof of the Tories' economic incompetence"....

Re: RBS bonuses - "Labour stitched us up" : Mon Jan 30, 2012 6:37 pm  

sally cinnamon wrote: Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: http://www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus.... The political risk theory still holds though - of the other four, Barclays and Lloyds are the two which are most likely to be affected by political risk as they are much more UK / London centric than either SC or HSBC, which whilst having their HQ in London are both more or less Asian banks. RBS are down 37% yoy but then Lloyds are down 50%, Barclays 28%, HSBC 23%. Lloyds are the closest competitor from the perspective of being state owned and so RBS have out performed them, and given the relative difference in strength arguably Barclays as well. Of course this all assumes that share price is the only metric worth following - which it isn't - and the real concern here is that we now have politicians holding what I'd consider to be an unacceptable level of influence over a £1.608bn balance sheet which we all have a stake in. What's even worse is it seems to be Labour which have the most power, a party who won't be coming to power any time soon and who don't seem to have any credible ideas beyond saying the opposite of whatever it is the Government says. May as well let the BNP have a crack as well. There can be no positive outcome out of this for RBS no matter how you look at it, and all it does is reduce the chance of us seeing our money back. But hey, as long as a bunch of northern socialists have satisfied themselves that one person isn't getting his bonus, who needs £45bn?

sally cinnamon wrote: Those using the argument that "RBS share price went down today.....so it must be because Hester turned down his bonus" don't understand that markets are driven by many factors. Look at the market data for the banking sector today: http://www.bbc.co.uk/news/business/mark ... efault.stm At the time I make this post, the share price changes are: -4.17% Barclays -4.13% Lloyds -3.53% RBS -2.83% Standard Chartered -2.51% HSBC So todays share prices have been on a downward direction for the major banks and RBS has not lost as much as Barclays or Lloyds. So how can you make the claim that the RBS share price fell today in response to Hester turning down his bonus.... The political risk theory still holds though - of the other four, Barclays and Lloyds are the two which are most likely to be affected by political risk as they are much more UK / London centric than either SC or HSBC, which whilst having their HQ in London are both more or less Asian banks. RBS are down 37% yoy but then Lloyds are down 50%, Barclays 28%, HSBC 23%. Lloyds are the closest competitor from the perspective of being state owned and so RBS have out performed them, and given the relative difference in strength arguably Barclays as well. Of course this all assumes that share price is the only metric worth following - which it isn't - and the real concern here is that we now have politicians holding what I'd consider to be an unacceptable level of influence over a £1.608bn balance sheet which we all have a stake in. What's even worse is it seems to be Labour which have the most power, a party who won't be coming to power any time soon and who don't seem to have any credible ideas beyond saying the opposite of whatever it is the Government says. May as well let the BNP have a crack as well. There can be no positive outcome out of this for RBS no matter how you look at it, and all it does is reduce the chance of us seeing our money back. But hey, as long as a bunch of northern socialists have satisfied themselves that one person isn't getting his bonus, who needs £45bn?