Mr Cameron's argument

tek-monkey

wanna see my snake?
But, as said earlier, my pension contract was drawn up under Labour too and has been shredded without the slightest concern from our new leaders.
 

henryscat

Well-Known Forumite
Hester has no contractual entitlement to a bonus... and it could have been blocked by UK Financial Investments if the government wanted the bonus not to be paid.
 

Mikinton

Well-Known Forumite
henryscat said:
Hester has no contractual entitlement to a bonus... and it could have been blocked by UK Financial Investments if the government wanted the bonus not to be paid.
I'm assuming it's performance related. Do we know what level of performance the last government were expecting for the bonus to be given the OK to be paid (or was it a case of "Yes, the post qualifies you for bonus in line with the industry standard [whisper] but there's no chance of us ever paying it [/whisper]")?
 

Withnail

Well-Known Forumite
Hester succumbs to "enormous political and media pressure" - no doubt Cameron will bask in undeserved reflective glory.

Mikinton said:
henryscat said:
Hester has no contractual entitlement to a bonus...
I'm assuming it's performance related. Do we know what level of performance the last government were expecting...
Huw Kyffin said:
As a shareholder in RBS (like the rest of us), I would like to see how the CEO's £1m bonus is justified, given the consequences of his actions on the profitability of the parent company, UK plc.

He has made redundant 33,000 members of staff. Suppose half of these stay unemployed for a year (an optimistic estimate) – 16,500 people. Then UK plc foots the bill for their benefits and for the lost tax revenue. Suppose the average salary of those made redundant is £25,000 – with a typical tax loss of £3,400 each. This equals £56m. To which we must add jobseeker's allowance payments of on average £67 a week for six months and any other possible benefits – maybe an average of another £3,000 a year, which equals another £54m.

So Mr Hester's actions for the RBS branch of UK plc have cost the parent company about £110m...
 

dangerousdave

Well-Known Forumite
Mikinton said:
I'm assuming it's performance related. Do we know what level of performance the last government were expecting for the bonus to be given the OK to be paid (or was it a case of "Yes, the post qualifies you for bonus in line with the industry standard [whisper] but there's no chance of us ever paying it [/whisper]")?
given that heads of service who work in local government are still able to to get their bonus after going over their budget by getting on for 2 million pounds this wouldn't surprise me in the slightest...
 

Jenksie

Well-Known Forumite
Miss Red said:
I think you will find its one of brown labours boo boos..........they drew up the contract with him for this eye watering sum...............as its a contract we now have to honour it, but he decided not to take the full amount.
Why then are not the Public Sector Pensions not being Honored?
 

Jenksie

Well-Known Forumite
dangerousdave said:
Mikinton said:
I'm assuming it's performance related. Do we know what level of performance the last government were expecting for the bonus to be given the OK to be paid (or was it a case of "Yes, the post qualifies you for bonus in line with the industry standard [whisper] but there's no chance of us ever paying it [/whisper]")?
given that heads of service who work in local government are still able to to get their bonus after going over their budget by getting on for 2 million pounds this wouldn't surprise me in the slightest...
I'm not aware of any bonus being paid in the Local Services - can anyone clarify?
Plenty of redundancies this last 12 months.
 

Gramaisc

Forum O. G.
Jenksie said:
I'm not aware of any bonus being paid in the Local Services - can anyone clarify?
From the Daily Mail - I not that it's not really relevant, but it might cause people to believe something else - please don't blame me..
 

phildo

Well-Known Forumite
Jenksie said:
Miss Red said:
I think you will find its one of brown labours boo boos..........they drew up the contract with him for this eye watering sum...............as its a contract we now have to honour it, but he decided not to take the full amount.
Why then are not the Public Sector Pensions not being Honored?
They are aren't they? I thought that all existing accruals were protected and the changes only affected future accruals.
 

Jenksie

Well-Known Forumite
phildo said:
Jenksie said:
Miss Red said:
I think you will find its one of brown labours boo boos..........they drew up the contract with him for this eye watering sum...............as its a contract we now have to honour it, but he decided not to take the full amount.
Why then are not the Public Sector Pensions not being Honored?
They are aren't they? I thought that all existing accruals were protected and the changes only affected future accruals.
Absolutely not. Why do you think 300,000 went on strike?
We will all be paying more from April 1st for less. Plus third year of a pay freeze and a recruitment ban.
 

phildo

Well-Known Forumite
Jenksie said:
phildo said:
Jenksie said:
Why then are not the Public Sector Pensions not being Honored?
They are aren't they? I thought that all existing accruals were protected and the changes only affected future accruals.
Absolutely not. Why do you think 300,000 went on strike?
Errmmm... you sure. Public sector will pay more from 1st April 2012 and the accrual rate will be lower BUT that pension that has already been earned is not being changed. ie. If you have 20 years service under the current rules then your pension will reflect that, It's the future pension that is being changed.

What was being proposed with Hester is to force a change of contract AFTER the event. They wanted to change the terms of his pay for last year, which is very different to what is being done to the public sector where the pension changes are being negotiated before being implemented.

Jenksie said:
We will all be paying more from April 1st for less. Plus third year of a pay freeze and a recruitment ban.
how about this for an alternative view "we will all be paying a more appropriate amount based on the expected future pensions that we will receive as we are living longer and it isn't right that everyone should make up the shortfall through general taxation. Plus, there is a pay freeze and a recruitment ban to help keep costs down so we will all need to knuckle down and work longer and smarter to ensure the business survives".....(that's what I've faced for 4 years in the private sector, it may not be fair but you get on with it, especially when 40% of your colleagues have lost their jobs over that 4 year period)
 

phildo

Well-Known Forumite
I should also point out that I am not having a go at the public sector. I just get very, very frustrated by the way the media chooses to ignore facts and the Great British public then runs around being 'outraged' or 'disgusted'.............. if people just bothered to read the details!

Take Hesters bonus - Hester had terms attached to his bonus, he had to achieve a variety of objectives in order to earn the full amount, he achieved some objectives and missed others thus earning 60% of his maximum bonus. In senior positions a proportion of the remuneration package should be linked to performance so that pay is linked to performance. Would the public rather that Hester just had a flat £2m per year rather than £1.2m basic + up to £1.5m in bonus? In a poor year if he fails to deliver he gets no bonus, so his earnings are low but if he achieves his objectives then he should be paid for them.
The problem with the public and the media is that they have taken banker bashing too far, RBS was going bust, it was a basket case, the Govt had to invest funds to keep it alive but they also appointed Hester to sort out the mess and to bring RBS back from the brink, he has rationalised the business and taken non core activities out, he has made progress..............would the public rather he hadn't bothered and that RBS had either gone bust or needed more bailout money? Either way, it is in OUR interests as taxpayers that Hester is motivated and continues to drive the massive changes needed at RBS so why does a large chunk of society want to rip a strip off at every last opportunity?

rant over, sos.
 

Jenksie

Well-Known Forumite
phildo said:
Jenksie said:
phildo said:
They are aren't they? I thought that all existing accruals were protected and the changes only affected future accruals.
Absolutely not. Why do you think 300,000 went on strike?
Errmmm... you sure. Public sector will pay more from 1st April 2012 and the accrual rate will be lower BUT that pension that has already been earned is not being changed. ie. If you have 20 years service under the current rules then your pension will reflect that, It's the future pension that is being changed.

What was being proposed with Hester is to force a change of contract AFTER the event. They wanted to change the terms of his pay for last year, which is very different to what is being done to the public sector where the pension changes are being negotiated before being implemented.

Jenksie said:
We will all be paying more from April 1st for less. Plus third year of a pay freeze and a recruitment ban.
how about this for an alternative view "we will all be paying a more appropriate amount based on the expected future pensions that we will receive as we are living longer and it isn't right that everyone should make up the shortfall through general taxation. Plus, there is a pay freeze and a recruitment ban to help keep costs down so we will all need to knuckle down and work longer and smarter to ensure the business survives".....(that's what I've faced for 4 years in the private sector, it may not be fair but you get on with it, especially when 40% of your colleagues have lost their jobs over that 4 year period)
The future Pension? Well I and a few million others intend to be part of the future.

There was massive reform in the late nineties - we all voted to stay in one of the three schemes offered.

That is now rejected as waste of time. If your salary was cut - not new starters but yours, would you accept the argument that you advance?

"We are only cutting your future salary - not your present one" is what the Govt are saying. "We are not asking for a piece of the salary you have thus far received - just some of your entire future salary".

The Public Sector employees pay VAT - you might be surprised to learn this. And income TAX and Fuel duty.

Keeping costs down by not recruiting will inevitibly mean a poorer service.

We are seeing this with the Post Offices now.

I don't buy the 'living longer' argument either. This will come back and bite when 72 year old employees have to attend medical appointments or care for elderly relatives - they will be castigated, discriminated against or just moaned at.

Childcare is a huge issue now with peoples working patterns as if that is not hard enough.

Plus it doesn't free up the jobs for youngsters.
 

henryscat

Well-Known Forumite
phildo said:
I should also point out that I am not having a go at the public sector. I just get very, very frustrated by the way the media chooses to ignore facts and the Great British public then runs around being 'outraged' or 'disgusted'.............. if people just bothered to read the details!

Take Hesters bonus - Hester had terms attached to his bonus, he had to achieve a variety of objectives in order to earn the full amount, he achieved some objectives and missed others thus earning 60% of his maximum bonus. In senior positions a proportion of the remuneration package should be linked to performance so that pay is linked to performance. Would the public rather that Hester just had a flat £2m per year rather than £1.2m basic + up to £1.5m in bonus? In a poor year if he fails to deliver he gets no bonus, so his earnings are low but if he achieves his objectives then he should be paid for them.
Hester did not have a contractual entitlement to a bonus and it could have been refused.

The plot has been completely lost with executive pay.

Mervyn King is paid just over £300k as Governer of the Bank of England. So what makes Hester worth 4 times that before any bonus?


The problem with the public and the media is that they have taken banker bashing too far,
Too far? Their excesses are to blame for utter mess we're in along with governments who failed to regulate. I've no sympathy with the banks whatsoever.


RBS was going bust, it was a basket case, the Govt had to invest funds to keep it alive but they also appointed Hester to sort out the mess and to bring RBS back from the brink, he has rationalised the business and taken non core activities out, he has made progress..............would the public rather he hadn't bothered and that RBS had either gone bust or needed more bailout money? Either way, it is in OUR interests as taxpayers that Hester is motivated and continues to drive the massive changes needed at RBS so why does a large chunk of society want to rip a strip off at every last opportunity?
That still doesn't justify his pay and bonuses. Daresay Fred Goodwin had a nice remuneration package.... it is no guarantee at all of motivation or competence.

Why does society want "to rip a strip off"? That might be to do with everyone now having to pay the consequences arising from the utter greediness of bankers and others.
 

phildo

Well-Known Forumite
Jenksie said:
If your salary was cut - not new starters but yours, would you accept the argument that you advance?

"We are only cutting your future salary - not your present one" is what the Govt are saying. "We are not asking for a piece of the salary you have thus far received - just some of your entire future salary"
We were talking pensions, not pay. They are not cutting pay, they are amending the terms of the pension scheme in the future for all current and future members.

Jenksie said:
The Public Sector employees pay VAT - you might be surprised to learn this. And income TAX and Fuel duty.
No, I am fully aware that public sector employees pay tax. I am not quite so aware what relevance this has?

Jenksie said:
Keeping costs down by not recruiting will inevitibly mean a poorer service.
If a poorer service is all the Country can afford then it will just have to do. This obsession with protecting services is another media fave, why not have a balanced and truthful view of the situation that explains that we have overspent both as a Nation and as individuals over a 10-15 year period and that we need to take a look at where we spend money and make difficult choices.
The media is so two faced as it will happily have programmes that try to help individuals spend wisely and to offer advice on budgeting but when the Govt trys to do the same it is shouted down!

Jenksie said:
I don't buy the 'living longer' argument either. This will come back and bite when 72 year old employees have to attend medical appointments or care for elderly relatives - they will be castigated, discriminated against or just moaned at.
Plus it doesn't free up the jobs for youngsters.
Agree with you on this, I think the retirement age should have been left alone in most cases but that would have meant an even bigger increase in contributions and that wouldn't have gone down well!
 

Withnail

Well-Known Forumite
phildo said:
... why not have a balanced and truthful view of the situation ...
Quite.

I, for one, won't get out of bed for less than £1.3m, and even then you'll have to 'incentivise' me with the promise of the same again before i'll actually do anything.

Don't you know who i am?

cartoon-character-he-man.jpeg
 

phildo

Well-Known Forumite
henryscat said:
Mervyn King is paid just over £300k as Governer of the Bank of England. So what makes Hester worth 4 times that before any bonus?
Market forces and the fact that Merv's job is way more secure.

phildo said:
The problem with the public and the media is that they have taken banker bashing too far,
henryscat said:
Too far? Their excesses are to blame for utter mess we're in along with governments who failed to regulate. I've no sympathy with the banks whatsoever.
It wasn't just the bankers though was it? What about all the people who borrowed all the money? What about the lie to get mortgages? What about the regulators? What about the Govts? What about the courts that have made walking away from debt too easy? What about the ratings agencies that AAA rated all the CDO's in the first place? What about the pension funds that allow their stock to be loaned out to the short side institutions?

I am not for one minute saying that the banks were blameless as they clearly played a part but ultimately the banks greed for new business was fuelled by the demand for cheap credit from consumers and governments. People bought tellys, cars and holidays and the Government spent more than they were generating in taxes to keep the electorate happy with new schools, hospitals and lots of those lovely services.

Yes, the banks caused the credit crunch by creating complex financial instruments made up of 'dodgy' assets and selling them as sound investments and when this unravelled there was a problem. However this was a credit market problem not an economic problem, the reason that this spilled over into the real economy is due to the fact that Governments were in debt and consumers were in debt, they were too reliant on the credit markets. You really can't blame the bankers for the debts built up by Govts across Europe and the personal debt mountain in the UK - society overspent when the times were good and now have no fiscal tools to fight the recession.
 
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