My top staff aren’t worth their extravagant pay extraordinary confession from boss of RBS
The boss of bailed-out Royal Bank of Scotland revealed that many of his top staff ‘aren’t worth’ their extravagant pay and bonus deals.
In an extraordinary admission, the chairman said legions of traders and financiers at RBS’s investment bank were not generating enough profits to justify their lavish rewards.
He told a conference on restoring trust in the banking industry: “I’m sure that we’re paying many people who aren’t worth it – maybe that’s the issue.”
The declaration by the RBS boss is also likely to inflame public anger over the pay deals on offer at the bank, which has received more than £45b in government cash since its implosion.
More than 100 bankers at the group’s investment banking wing were paid a bonus of at least £1million last year – even though the Edinburgh based giant racked up losses in excess of £28billion.
But, defending the practice of handing fat bonuses to staff at its so-called “casino” division – even if it meant that some bankers were paid too much for their efforts he said: “We see people who are worth a lot of money (to us), who when they leave take a lot of business with them,”
He further claimed that RBS, which is 84 per cent owned by the taxpayer, was powerless to rein in rewards as this would trigger a walk-out of top staff. He said: “If you are the bank that decides to cut bonuses for the most important people, you’ll be the first with a franchise-destroying defection.”
So the UK electorate is forced to stand back and witness a rapid, public funded banking recovery from a financial crisis created through the greed of those who stand to benefit most.
Seizing the opportunity and with embarrassing haste, banks embarked on a virtually unprecedented hiring spree, driving up wages across the London Square Mile.
RBS, which employs 160,000 staff across the globe, last night maintained that very few of its staff enjoy bumper bonuses and salaries.
But the bank handed out a gigantic £1.3billion to its 16,800 investment bankers last year. On average, this is equal to a bonus of around £77,400 each.
But, in mitigation the Chairman offered that RBS had “virtually” eliminated cash bonuses, with most rewards paid out in shares and other stock, and staggered over a number of years so that they can be clawed back.
His comments were echoed by Barclays chairman, who added that “unilateral action by any single bank (would) not provide a practical solution” to the problem of ever-rising pay for “star” performers.
The revelations lift the lid on the bonus arms race that is currently sweeping through the Square Mile. Goldman Sachs recently handed tens of millions in bonuses to its 80 London-based partners to prevent more senior staff defecting to rivals.
The headline is incomplete, should it not have read “My top staff aren’t worth their extravagant pay”, but “what the hell, we are being subsidised by the taxpayer so lets make hay while the sun shines”.
They and all of the banking industry know that those in government have not the guts or the brains to stop one of the massive injustices of all time. Instead they hit the soft target, the Taxpayer. (Daily Mail)
A Boom in Hedonistic “Greed is Good” Spending is Sweeping Through London
The return to “flaunting it” mirrors the conduct of the cinematic symbol of eighties excess, (Michael Douglas’s amoral trader Gordon Gekko.) West End stores, clubs and restaurants have been astounded by the sustained growth in guilt-free spending.
A spokesman for Selfridges said: “The range and style is more obvious’ or ostentatious than ever. Stuff is just flying off our shelves. There are a lot of £1,000-plus shoes being sold.”
Particularly popular are Alexander McQueen Loki’ankle boots at £2,195 a pair and Christian Louboutin Margot platform shoes costing £1,575.
fashion and luxury goods groups report that sales of their £1000 Prada bags had exceeded expectations. The ‘Neverfull’ handbag from Louis Vuitton at £900 is very popular
Bollinger UK, imports £140 a bottle Special Cuvée into Britain because demand is so strong. A spokesman said: there was a time when people certainly didn’t want to be seen with an expensive bottle of champagne — but we’re past that phase now.”
Bugatti and Ferrari have sold out of their latest models
The spending boom is being fuelled by the prospect of yet another year of bumper bonuses in the City — an estimated £10billion will be handed out this winter
And there is the influx of rich high spending Arabs influx of high-spending
The opening of a number of rejuvenated nightclubs and hotels after sumptuous makeovers is also being seen as a sign that it is acceptable to be rich.
Tottenham Court Road lap dancing hangout Spearmint Rhino, which fell heavily out of favour during the credit crunch years, is booming. A club spokesman said: “We sold out of £395 a bottle champagne last night.
He went on: six City guys came in and dropped £5,000 to take the VIP area for the evening.
A few nights ago we had four guys from the Middle East who bought £20,000 in chips for dances and drinks. After service charges they spent £24,000.
It’s great to be back to the days of five or six years ago. Those sort of customers are starting to come back, there’s been a huge increase just in the past five or six weeks.”
London is also being assisted by France’s burka ban with many wealthy Arabs boycotting Paris. Saudis who divert to London spend an average of £40,000 each.
They will easily spend £5,000 or £10,000 a night on the casino tables at Les Ambassadeurs (in Park Lane) or treat their friends with the best champagne as Scott’s.
The Arabs absolutely love the British. They must have the best of everything and do their shopping in Mayfair.