davyboy

Leaders of large companies earn stacks, always have, always will.

My CEO earned about $17 million last year! Base salary about £2m.

This is a manufacturing company too, not finance.

Trout

iTrader: (1)

Stop that!!! Don't let some good facts get in the way of the Scoobynet Kangaroo Court!!!

Trout

iTrader: (1)

Lots of people work hard - I am sure Hester does too. He is also personally responsible for leading a hugely complex and troubled organisation to a profit. His total earnings are around 1/1000th of the profits he generates.

I am very, very, very confident that few CEOs of businesses any size would work for such a paltry share of the spoils!!!

f1_fan

iTrader: (9)

Only that governments especially Tory ones look after their own. Nothing new there.

A few people like Trout still think that the dog eat dog society created by Thatcher and Reagan's 'greed is good' mentality is a good thing despite the fact it has all come crashing down around us. I just bet his favourie movie is Wall St

Jamz3k

Trouts posts on this thread are the only ones to me that actually make sense, the rest are just trying to be as sensational as the news report.

You go to work to earn money that is that, this guy is at the top of his game and is making a company profitable so he is entitled to his bonus end of. Sure why not pay him less and strip him of his bonus then watch as himself and his team move to another bank were they will get rewarded properly for their work. Meanwhile RBS fails and the taxpayer can bail it out again, well done NSR.

Trout

iTrader: (1)

Keep going - I am both flattered by your dedication and amused by your total lack of insight in your worldview. Keep trying, I am sure that based on the infinite monkey theory, one of your thoughts might pop up with a hint of veracity.


But I'm not holding my breath*











*

Trout

iTrader: (1)

Surely it is in our interests as shareholders to have a CEO who is highly motivated to make decisions that are in the medium to long term interest of the bank. Having a deferred, share based bonus creates that longer term view.

This avoids the kind of short-termism that corporate culture has suffered for years.

Leslie

Only because people are stupid enough to pay them that much money!

Les

Jamz3k

or wise enough to know that if they don't someone else will.

hodgy0_2

i am sure there are good reasons for paying that kind of money

but simply saying he gets less than others, does not seem to be a very well reasoned reason

I thought "markets" were supposed to drive competition and hence reduced prices

it seems the "market"in CEO pay does the opposite (not that I am surprised) but interesting nonetheless

David Lock

I note that Phillip Hampton, RBS's chairman, has rejected his bonus and has previously stated that he felt that bankers were overpaid.

But what the hell does he know? He really should have had a word with Trout first

dl

Jamz3k

Trout doesn't have to combat political pressure whilst giving his opinions on SN.

hodgy0_2

the point is Dave

what does anynone know

Fred Goodwin was awarded a gong in 2005 (approx) for, wait for it
















"services to banking"

Lee247

I guess it's because I work hard and cannot imagine ever earning those type of figures. Hence why I will never be a millionaire Am I bothered, no. I am happy with my lot

David Lock

Just you wait - it'll be Lord Trout soon for services in advising all us stupid people on SN



Agree completely - we don't. My thoughts are just that in 40 years of business in several countries I have met all sorts of people at all levels including bank chairman and some UK Treasury heavyweights. Generally speaking they have been very good indeed at their jobs but they aren't super gods by any means, just regular human beings like you and me. The high base salary is a con in my view. It may be the norm but that doesn't make it right. Did you happen to see that British Gas chap with Paxman recently? What a *****. Paid £1.8m basic to con his customers - although he has done a good job at that

I'm fine with paying a bonus against genuine performance.

dl

Trout

iTrader: (1)

So, with your 40 years experience of business and meeting all and sundry from Treasury Mandarins to a bank Chairman, how would you measure genuine performance for Mr Hester?

Please enlighten us with your wisdom?

Could it be a simple profit and loss improvement (-£24bn to +£2bn)?

Maybe it could be cost/income ratio?

Or reduction in risk weighted assets?

Or improvement in liquidity ratios?

Or return on equity?

Or profitable divestment of non-core businesses?

Perhaps preparation for compliance with Basel III?

What does Mr Hester have to do to demonstrate to you that he has done an appropriate job?

Trout

iTrader: (1)

So how much it reasonable?

Trout

iTrader: (1)

The same is true for other 'talent' markets. Look at the wages and transfer fees of top sportsmen.

Trout

iTrader: (1)

You said it


Lord Trout

David Lock

I don't know enough about banking to tell you. Happy to leave it to the people that do.

And stop showing off - it doesn't suit you

dl

Trout

iTrader: (1)

jef

iTrader: (13)

but hes one man?

he didnt do all this work himself,
as ceo you sit at your desk playing games on your nintendo, in the 80's lol

while everyone rushes around organising things, doing the actual work and you attend publicity functions. stressed meber of staff may inconvience you occassionaly with stupid questions ofcourse

all ceo's are just the face people need to have for imagless companies. i reckon they could all run without one man at the top,

JTaylor

If one is wired-up to operate in our current system and is able to be successul, one will support it. If one isn't, one will criticise it. There'll be no agreement where both participants in an argument have vastly different starting points. Neither is more correct than the other when both hold a subjective truth. One can be objectively closer to the truth when its context is the here and now, but that hasn't been established in this exchange.

The terms of this discussion need to distinguish between the player and the game, dispassionate and ethical business and, on a deeper level, socialism v capitalism. I'm going to stick my neck out and state that, broadly speaking, Trout supports the principles of laissez-faire capitalism and f1 is essentially (ideologically and ethically, if not pragmatically) a socialist. Fundamental, irreconcilable differences. Hester's bonus is incidental, its just the latest fault-line of the perpetual battle between the haves and the have nots and the question of why some have and why some do not. There, I think that's settled.

GlesgaKiss

It's a sad state of affairs that this is even the subject of a discussion, to be honest. The source of the problem is the fact that these banks were allowed to become state-owned in the first place.

They were having a debate on Radio 2 the other day about it. It's very worrying hearing members of the general public phoning in to say that Hester shouldn't receive this bonus; just as it's equally worrying hearing a professor suggesting that it's necessary for the role and that he knows better. It shouldn't have anything to with either of them, but both feel entitled to have their say in the running of the bank merely by virtue of existing under the same government.

JTaylor

Yes, this is the antecedent, and I'd challenge you to reduce that back further and outline the consequences of a failure to intervene. If the answer is that we'd have faced an economic apocalypse, then it rather brings in to question the efficacy of the free-market. And you can't go back in time and regulate effectively, we're staring at 2008. So, no intervention, what would have happened to simple men like me and you and our mums and f1 and even superficially wealthy nouveau-riche river fish?

Trout

iTrader: (1)

This is the nub of it. Hesters remuneration is between him and his employer.

I am sure most of Scoobynet would be up in arms if we started openly discussing and critiquing their remuneration with the general comment that it is nobody's business but their own. And they would be right!

Trout

iTrader: (1)

So what you are really saying is that OSX is better than Windows?

Trout

iTrader: (1)

You are right - some of his team earn a shed load more than he does as they do all the work

hodgy0_2

yes -- I understand that, but as I said in my previous post, just because its the "same" as wada wada wada, is not a very good reasoned argument

and just props up the status quo -- which historically, gets humanity nowhere

GlesgaKiss

What about going even further back than that and asking what would have happened had politicians not intervened with the intention of 'improving' the market (i.e. using their control to promote growth and stave off the natural effects of the market). The whole 'failure of regulation' issue is something that appears on the surface; but what about the political decisions that led up to the situation we have now, where, over the course of the last 30 or 40 years, the developed western economies have become deindustrialised consumer economies reliant on unsustainable credit? No one ever talks about that. It's not a failure of the market mechanism as such, which always does what it's meant to do, albeit not always in a way that's politically favourable. It's a failure of the policies of governments, of their state-run pseudo 'free market'. They did things (like spent when they shouldn't have - changing the monetary and fiscal policies to suit) that drastically altered the workings of the market.

So you have to go back further than '08 if you want to 'question the efficacy of the free-market'. We wouldn't be sitting on this ledge overhanging an abyss (of greatly reduced economic activity and general living standards, in answer to your question) if it had been left up to the free market. It was government policies which led us here, so why should we question a legal framework which logically does exactly as it's supposed to do.

Now, you might say from a practical perspective that when people cry out for something to be done... for some extra spending, that the government has a duty to do it. That's an ethical question - it might be right or wrong, I don't know, it depends on your view of the situation at the time, and your view of life in general and what it should be about.

But ask yourself this: if the free market is no good (if it can't be permitted to exist in its pure form for ethical reasons), and if the government operated version doesn't work (with aspects of central planning that we have today) and leads to our current situation; if the mix of free-market and state intervention doesn't work for us; then what does work? Would a government be able to do a better job with their own design of an economy, working in a totally different manner from that of the market? Would that be any more sustainable? Would it be a moral improvement?

This reminds me of a part of "The Theory of Moral Sentiments" addressing happiness: IV.I.8 http://www.econlib.org/library/Smith/smMS4.html

Almost everyone agrees that the happiness or contentment of its people should be a government's goal. You do have to wonder, at this stage, whether a government mortgaging away a future to make people happier right now is morally acceptable - if it ever should be morally acceptable (like in the case of the decisions that led up to this point), even when it seems harmless at the time. We have this image that the state can grant all wishes and just make things better. But there is a reality that we can't cheat: the fact that what you put off now, you have to deal with later.

What makes our present situation so tricky is another reality of life and human nature: the way people have become accustomed to our quality of life. If this had happened post war we wouldn't have a problem; people would just get on with life, expecting very little. But take the same animal now and there's a very different attitude among the general populace. Attempt to withdraw some of their rights to sit about earning a living doing nothing but churning out kids (e.g. the proposed new ceiling on benefits of £26k!), or to free or subsidised further education, and you'll have riots on your hands. And that, in my opinion, is where it has all failed: because there is genuinely no way out of this mess with out reducing the amount of money we spend (or, to be truthful, borrow), and that can't be done without appearing to be unfair and making some people unhappy. But what we're destined for if we aren't 'unfair' to certain groups will ultimately be much worse for them, and there will be nothing anyone can do about it.

So, in hindsight, should the initial decisions (which corrupted the system) have been made to give them momentary happiness, or to be 'fair'? That's the question politicians should be think about before they enact new legislation or change the monetary system in order to make some people in society a few percent better off every year. Politicians very rarely think about the - sometimes far-off - unintended consequences of what they're about to do, and very few people ever pick up on them when they occur. It's much easier to find a convenient scapegoat.

Edited to say - sorry for the length (an apology I have to make often). It seemed much less rambling/droning as I typed.