The Bankwatch

Tracking the consumer evolution of financial services

Posts Tagged ‘bonus

RBS pays out 10% of equity to investment bankers

In the banking business I think we all understand the point and motivational benefit of bonuses, however this story from a Bank that is almost a Government Department (70% government owned) takes insanity to a new level, if you are a taxpayer.

The sheer size of the bonus pool of £4 billion is astounding. That represents just under 10% of the banks equity!

I mention the government ownership because while we are used to investment bankers paying out such bonuses, one would have thought that their government overseers would have insisted on that £4 billion being used to boost capital, or repay Government assistance.

Nice work if you can get it.

Royal Bank of Scotland to give huge bonuses The Times

The average employee in its high-risk investment banking arm is likely to take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.

Relevance to Bankwatch:
On a slightly more serious note, when I predicted the arrival of financial utilities in financial services, I did not expect such a hands off approach from government. Surely it will be a matter of time only.

Written by Colin Henderson

October 18, 2009 at 02:37

Dear A.I.G., I Quit! | Jake DeSantis

It is very interesting and illuminating to read this resignation letter from Mr DeSantis of AIG.  He received $742K on march 16th and must either repay to keep and lose 90% to tax.  He intends to keep and donate residual to charity.

Question de jour:  Should Mr DeSantis, who was earning $1 per annum salary, be held responsible for the world economic crisis?  Is he more accountable than Joe Plumber in Florida who signed up for a sub-prime mortgage knowing full well he could not afford the interest reset.

These are difficult and emotional times.  Delivering bailouts without terms and conditions attached bordered on criminal and here is the outcome – a modern day lynching.

Dear A.I.G., I Quit! | Jake DeSantis

As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.

Written by Colin Henderson

March 29, 2009 at 23:31

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