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Thursday, 4 February 2010

RBS attacked for bonuses via the back door

Stephen Hester, the Chief Executive of the Royal Bank of Scotland does not seem to learn, the RBS is effectively a state owned bank, backed by us, the mere taxpayers, of which millions have lost their jobs in recent times.

Now we are told that the RBS bankers are receiving bonuses as shares, which they can convert a large percentage of into cash within a twelve week period.


Now Stephen Hester has defended this outrageous back door bonus culture to investors by sticking to the bankers standard line that they need to be able to attract and retain the top talent.

Crap.

All we have heard from the banks across the World, not just here in the UK, in recent months is how many talented staff they are sorry to have laid off. So they cannot have it both ways.

I gather from friends of mine lucky enough to still have a job in the lucrative side of banking in London that there is a limited amount of recruitment and a small amount of people moving around but nothing on the scale the banks try to portray for their own benefits.

It really is time that people like Stephen Hester and others in the banks that are now state funded realise that they can no longer just play loose with the funds of the bank in the way they have been used to.  If other businesses ran their operations as the banks were seen to do before this near collapse at the start of the recession they would just go under.

They would never receive the levels of funding that RBS and others did, so why are the banks still acting with such arrogance?

Stephen Hester has pointed out that no one earning over £39,000 would receive bonuses, BUT, those who do get one will be paid in shares or debt, deferred for up to three years and subject to clawback.

The debt bonus, or subordinated debt is actually a form of bond that can be sold for cash.

So, bonuses are being paid to people despite their attempt to be clever with the language.

I have no problem with staff getting the bonuses they are entitled to, however, when a bank is now effectively state owned, the ball game is a little different and the public mood must be taken into account.

Large bonuses paid to staff that total more than a combined household income when people are being made redundant all over the country is nothing more than greed and we have seen what greed has done in this recession.

It is time for change.

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