Wednesday, February 18, 2009

Bank Bonuses Curtailed

The Royal Bank of Scotland are the first of the banks supported by public money to have their bonuses hemmed in. Following public outcry that the bank that was bailed out with public money was still paying out bonuses of astronomic proportions when making such a heavy loss it issued its new plan after discussions with UK Financial Investments (who oversee the Government's shareholding in banks). The new deal is (from the bank's full statement):

  • No Reward for Failure: No bonuses or pay increases will be made to staff associated with the major losses suffered in 2008.
  • Board Remuneration: As previously announced Board Executive Directors will receive no bonus for 2008 performance and no pay increase in 2009.
  • Pay 2009: Agreement has been reached with Unite in the UK for staff which they represent below managerial grades. Ongoing discussions with staff representatives are taking place in other regions. This will mean a pay freeze for Directors and Executives in the Group worldwide, and for most staff in the US and the Global Banking & Markets division. On average, other staff will receive below inflation pay rises.
  • Bonuses for 2008: No discretionary cash bonuses will be paid in 2009 for performance in 2008. Only legally binding guaranteed bonuses will be paid. Total cash bonus payments for 2009 will amount to £175 million. Therefore total cash spend overall will have been reduced by more than 90 per cent.
  • Protection for lower paid staff: The existing Profit Share "bonus" scheme worth 10% of salary will not be paid for 2008, and will be terminated for all future years. An equivalent payment will be made as part of the existing monthly award package to staff below managerial grade, beginning in 2009. The average salary for this group is £18,979.
  • Deferred awards: Staff who are essential to the bank's recovery and who might otherwise be at serious risk of leaving, and who remain with the Bank will receive a deferred award for 2008. The deferred award will be released in three equal annual instalments beginning June 2010 and payable in sub-ordinated debt of RBS i.e. not in
  • Claw back of deferred awards: In individual cases up to 100 per cent of these deferred awards will be subject to forfeiture at the discretion of the Remuneration Committee and if future losses arise in relation to their 2008 activities . Awards will therefore be based on sustained long-term performance, not on short-term revenue generation.
  • Deferred Amount: The total amount of deferred awards will be finalised following our forthcoming company announcement relating to the Group's Strategic Review. However, the total amount will represent a very significant reduction on the comparable prior year totals and the settlement overall will be as tough as that at any other comparable bank.
  • Future Policy: RBS is undertaking a fundamental review of its approach to future remuneration to ensure that incentives are well aligned to the interests of shareholders over the long-term. The intention for 2009 is to follow the same approach and deferral periods as outlined for 2008 while ensuring the Group pays competitively overall with other international banks. More details will be provided in the Group's forthcoming Annual Report and Accounts.

The net effect is that there is a 90% reduction in the bonuses that were to have been paid out for now. To counter the argument that key staff needed to get the bank back on its feet will be deferred (but they'd better see a turnaround or the claw back option will take effect). The counter staff, who obviously were not involved in the decision making will get their bonus as a performance related salary increase.

With the short term bonus culture employees have looked possibly to their own pockets rather than the health of the bank when making crucial decisions. So the move is to reward for longer term objectives rather than short term profiteering. Lloys who are seeking Government money have also submitted their bonus plans to UKFI for scrutiny.

Although with millions of others facing a salary freeze employees at RBS, who will be receiving below inflation pay increases, are still luckier than many other employees, and many of the unemployed, in the UK this morning after the year the bank has had.

2 comments:

PJ said...

Hope you don't mind a completely unconstructive contribution to your post....but it gives a slightly different insight into the banking crisis!

http://www.thedailymash.co.uk/news/business/hbos-risk-control-run-by-evel-kneivel-200902181587/

First time I've read anything about the banks and actually smiled!

will said...

A片,A片,A片,A片,A片,A片情趣商品,情趣用品,情趣用品,情趣,情趣,情趣用品,情趣商品,情趣用品,情趣,情趣,情趣用品,情趣商品,情趣用品,情趣,情趣,情趣用品,,情趣,情趣用品,情趣用品,情趣用品,情趣用品.情趣,情趣,情趣,情趣,視訊聊天室,情趣,情趣用品,情趣,情趣用品,情趣用品,情趣麻將,台灣彩卷,六合彩開獎號碼,運動彩卷,六合彩,遊戲,線上遊戲,cs online,搓麻將,矽谷麻將,明星三缺一, 橘子町,麻將大悶鍋,台客麻將,公博,game,,中華職棒,麗的線上小遊戲,國士無雙麻將,麻將館,賭博遊戲,威力彩,威力彩開獎號碼,龍龍運動網,史萊姆,史萊姆好玩遊戲,史萊姆第一個家,史萊姆好玩遊戲區,樂透彩開獎號碼,遊戲天堂,天堂,好玩遊戲,遊戲基地,無料遊戲王,好玩遊戲區,麻將遊戲,好玩遊戲區,小遊戲,電玩快打情趣用品,情趣,A片,AIO,AV,AV女優,A漫,免費A片,情色,情色貼圖,色情小說,情色文學,色情,寄情竹園小遊戲,色情遊戲,AIO交友愛情館,色情影片,情趣內衣,情趣睡衣,性感睡衣,情趣商品,微風成人,嘟嘟成人網,成人,18成人,成人影城,成人圖片,成人貼圖,成人圖片區,UT聊天室,聊天室,豆豆聊天室 ,哈啦聊天室,尋夢園聊天室,聊天室尋夢園,080苗栗人聊天室,080聊天室,視訊交友網,視訊借錢,黃金,黃金回收,黃金價格,黃金買賣,當舖,中古車,二手車A片,A片,成人網站,成人影片,色情,情色網,情色,AV,AV女優,成人影城,成人,色情A片,日本AV,免費成人影片,成人影片,SEX,免費A片,A片下載,免費A片下載,做愛,情色A片,色情影片,H漫,A漫,18成人,情色電影,自拍,成人電影a片,色情影片,情色電影,a片,色情,情色網,情色,av,av女優,成人影城,成人,色情a片,日本av,免費成人影片,成人影片,情色a片,sex,免費a片,a片下載,免費a片下載,成人網站,做愛,自拍A片,A片,A片下載,做愛,成人電影,18成人,日本A片,情色小說,情色電影,成人影城,自拍,情色論壇,成人論壇,情色貼圖,情色,免費A片,成人,成人光碟18成人,成人聊天室,成人電影,成人圖片,成人貼圖,成人圖片區,成人影片,成人文章,成人小說,微風成人區,成人交友,成人文學,成人漫畫,成人遊戲,免費成人影片 ,成人論壇,愛情公寓,情色,色情網站,情色A片,色情小說,情色文學

LinkWithin

Related Posts with Thumbnails