George Osborne defends Stephen Hester's bonus

[JuliaScurr]

Yes, he defended that £1 million bonus on top of the £1 million salary. Remember RBS is mainly State owned after the bail out, so Hester is a public sector worker.
Thanks, George. That clarifies things.
Make sure you tighten up on those 'disabled' benefit scroungers.

edam great post re private sector pensions, pension holidays etc. But wait - that would mean that crap private sector pensions weren't the fault of public sector greed

I really don't get this objection to Hester's bonus, I really don't.

There is no public servant in the land who could even begin to do a job of that magnitude. Hester could command three times as much money elsewhere, he's done a fantastic job of derisking the bank, he's met his targets, and he's contractually entitled to the money.

What next? Are you going to suggest that a mandarin should go out and play for Man Utd to cut down on the rewards earned by Premiership Footballers? A group of mandarins together winning the X-Factor?

Suck it up. Some people are worth gargantuan sums of money. Unfortunately. That's the free market economy.

Yes Essential, that's exactly how workers are seen.

It was Labour who agreed Stephen Hester's remuneration. There isn't really much the current gov can do, without seriously undermining the free market. If they interfered it would have serious consequences.

Quattro - there is a public servant doing that job, actually, he's called Stephen Hester. He IS a public servant.

Julia - yeah, it's a great con trick the government has pulled, persuading people with private sector pensions to turn their ire onto public sector workers, rather than asking where the hell all the money has gone. Much as the great con trick being pulled over benefits capping - so we won't demand wholesale reforms after the crash. Oh no, let the money men get back to their old tricks, while we bash the unemployed. In the middle of an effing recession when there aren't enough jobs to go round and many of those who do have jobs can only get part-time work when they need and want full-time...

Quattro in a free market economy with no State intervention, there would be no RBS bank now
Try using your argument on the next heart surgeon you meet

MrsJ - what free market? The whole point is 'the market' isn't working. It isn't 'free', it's reliant on government funding. Companies aren't making money for shareholders, they are acting as if they have no owners.

Edam - Most banks would have survived just fine.

Funny you use the word 'worth' Quattro. Countless communities and marginalised parts of society are worth that money, one man is not.

Heart surgeons don't earn bonuses...

Sorry but that's simply rubbish. This wasn't a little local difficulty confined to one or two minor banks. This was the collapse of the developed world economies. The collapse of RBS would have brought others down too. The country came within minutes of the cash machines running out of money and electronic payment systems collapsing. None of the banks would have survived. They are all underpinned by the taxpayer guarantee.

edam I agree it's fantasy to suggest that you can't get someone to do a competent job in banking for less than say £200k. This is just trite propaganda to maintain the stautus quo of the fat cats.

Everyone knows that wages at the top are super inflated, not reflective of the skills and abilities required to do the work and that this serves nobody but the few recipients as indeed illustrated by the statistical inabilities of fund managers to outperform the market. Our pensions pay for theoutrageous lifestyles of these traders

So where's the "free market"? Why aren't salaries and bonuses driven down by competition just like they are in any other market? The highly-skilled CEO of my (medium sized, very successful) company makes around £300K with a 30% bonus that's based strictly on his performance and the company's profitability. If we do badly then he gets no bonus at all. We couldn't pay any more because we wouldn't be profitable in our market. Why doesn't the same apply to banks?

Edam- don't you understand that stepping in to rescue the insolvent banks was for the wider good? Iit was the least worst outcome and I though Alistair Darling handled it remarkably well.

Lloyds were perfectly solvent and required help only as a result of being talked ino taking on HBOS.

"of course we are paying their wages, we are the owners of the sodding company!"

That's not how it works. RBS has a profit and loss account that records, on the one side all the revenue coming into the bank and on the other other side, the costs of doing business. Wages are a cost of doing business, same as renting premises, replacing the IT system or paying the electricity bill. The taxpayer may own the majority share in the business and may expect a dividend on that investment but we are not standing there every month, writing out cheques to pay for current expenses.

"We couldn't pay any more because we wouldn't be profitable in our market. Why doesn't the same apply to banks?"

I understand that RBS is declaring a profit of £2bn for the last quarter.

Posie they don't get bonuses. They don't ge £1.3 million salary before bonus either

"I understand that RBS is declaring a profit of £2bn for the last quarter."

My point exactly. So why doesn't some other bank come along that gives its customers way better value, by declaring lower profits and incurring lower costs? It's not like there's no room for manoeuvre in the market...

Unfortunately, there are probably many better people to run RBS than Stephen Hester, but none of them chose to become bankers in the first place. And the more you reward bankers, the more pushy, greedy, nasty, selfish people will be attracted to the sector and the more everyone else will be turned off by it. Does anyone know a banker who chose that profession because he wanted to do something good for society and if so, do you know what happened to him?

It's such a shame Hester is a comprehensive boy and not an Old Etonian as that would have dovetailed so much better.

rabbitstew Sun 29-Jan-12 12:37:57
Unfortunately, there are probably many better people to run RBS than Stephen Hester, but none of them chose to become bankers in the first place. And the more you reward bankers, the more pushy, greedy, nasty, selfish people will be attracted to the sector and the more everyone else will be turned off by it. Does anyone know a banker who chose that profession because he wanted to do something good for society and if so, do you know what happened to him?

I wish there was a 'like' button sometimes!!

Do you do your job for the good of society rabbitstew or do you do your job for the money? Personally, I work for the money and suspect the vast majority of people do the same. Good works I can do in my own time.

Money to live and enjoy life are very different to £35million.

I'm afraid I just wouldn't go into banking, because I could think of no reason for doing so besides the money and I would rather work for something a little bit more inspiring than JUST the money. That is, after all, one of the arguments for not paying teachers much money - they are supposed to be in it for the joy of teaching, not just for the money. So no, personally, I would never do a job just for the money, unless I had no other option - which would mean I would be right at the bottom of the salary scale, not right at the top where my qualifications would open an awful lot more inspiring choices to me.

cogito, lots of people choose jobs that will give them a sense of satisfaction. Jobs they enjoy, where they can contribute to society and best use their skills. I know bankers are just greedy but it's odd that it doesn't occur to them that other people might have very different values. I don't want to exploit people for a living, for instance.

A cleaner has some value - they do an important job and it would matter if they stopped. Someone who runs a business that manages to avoid exploiting suppliers, workers and customers has some value. Someone who gambles with other people's money has a fairly limited value, especially when they lost all of it and had to go begging to the government.

... and of course the costs of doing business are borne by the owners, fgs.