Hundreds of thousands of pounds in bonuses are to be paid to Home Office staff amid a public sector pay freeze.

Immigration minister Damien Green told the Commons home affairs select committee that the payments to senior officials would total £773,000.

But he said it was in effect a pay cut because the amount set aside for bonuses last year was £1.4m.

The Home Office said that, like others in the department, the staff would not be getting a pay rise.

Some 141 senior civil servants have been awarded the bonuses, fewer than the 219 eligible. The payments will be made in July.

BBC home affairs correspondent June Kelly said Prime Minister David Cameron had reiterated that when it came to public sector pay those at the top had to set an example.

BBC NEWS  21 July 2010

Stephen Hester's bonus is a sideshow; the real issue is what's become of our £45bn

The von Mises Institute got it right: the RBS should have been allowed to fail

If we accept that for the forseeable future the taxpayer's equity cannot be sold at anything other than a thumping great loss, what should be done?

One approach, which is the one that would be adopted in the private sector, is simply to admit the money is lost, salvage what little is left – no more than £10bn realistically – and move on.

That's the way capitalism is meant to work. Sitting on an unrealised loss just prolongs the agony and gets in the way of efficient capital allocation.

But of course it is politically unacceptable to admit the money has gone ...

The Government must either find ways of realising its capital, or it must nationalise outright and set RBS on a different path.

Tel  30 Jan 2012

RBS top bankers set to share £30m bonus pot

They are in line to take a big share of the bank's controversial £500m bonus pot.

The five are Michael Lyublinsky, head of investment bank's US arm; Scott Eichel, who runs securitised products and US credit; Peter Rading, co-head of fixed income, currencies and commodities (FICC); Peter Nielson, who leads markets globally; and Brian Reid, who runs research and strategy ...

Over the past three years, Mr Lyublinsky, Mr Eichel, Mr Rading, Mr Nielson and Mr Reid have consistently ranked among the top five paid people at RBS – earning much more than Stephen Hester, the bank's chief executive.

Tel  30 Jan 2012    A Free Market Train Wreck    Bankocracy Log    Corporate State Log

About Wall Street jobs, wealth, and the cultural distortion of America

Alternatives to FRB    Neoliberal Financial Terrorism

Europe’s Transition ... to Oligarchy

Fractional Reserve Banking

Fiat Money Systems

Hester's RBS pay deals worth over £11m since 2008

Shareholder interest is a thing of the past

Urgent Appeal for a
Global Glass-Steagall System

We used to have debt-free money

RBS chief Stephen Hester to get £963,000 bonus

While Nick Clegg hides behind the previous government, the bonus reflects the essential nature of corporate state Britain, and the banks' place at the top table. The threat of resignations was apparently sufficient to ensure the Coalition's subservience to corporate interests, while at the same time denying single parents free access to the services of the Child Support Agency, the latest in a long line of actions by the coalition in punishing the marginalised, who - btw -played no part in the creation of the financial bubble which collapsed in 2008, leading to the current crisis. The fact that the anomolous UKFI supports such bonuses is a further confirmation of the coalition's subservience to banking finance.

RBS announced on Thursday that Mr Hester is to get £963,000 in shares based on the bank's closing share price on Wednesday 25 January 2012 ...

RBS is 82% owned by the taxpayer.

BBC business editor Robert Peston has learnt that the bonus came due to fear about resignations on the RBS board.

"I am reliably told that they feared Mr Hester and much of the board would have quit, if the payment had been vetoed by the government as the majority shareholder," said our business editor ...

For the past two years, part-nationalised RBS and Lloyds Banking Group have paid no cash bonuses of more than £2,000.

The firm has announced thousands of job cuts, although it recorded a £2bn profit in its most recent trading period compared with a £1.6bn loss in the same period in 2010.

Deputy Prime Minister Nick Clegg has said ministers are "constrained" by contractual arrangements agreed by the last government at the time of Mr Hester's appointment regarding his bonus ...

BBC NEWS  25 Jan 2012

RBS chief Stephen Hester in line for £7m payout despite bonus cut

In a statement on Thursday night, RBS said Mr Hester would get a bonus of £963,000 as the taxpayer-backed lender bowed to political and public pressure to ensure its chief executive was not handed more than £1m.

However, the bank admitted Mr Hester was still potentially eligible for an award under a long-term incentive plan (LTIP) worth as much as £4.8m.

This means his total pay package for last year including his £1.2m salary and £420,000 pension could reach £7.38m.

If Mr Hester were to receive his maximum LTIP grant it would take the total value of the awards made to him since he took over as chief executive in October 2008 to about £27.5m.

The actual value of these awards is likely to be substantially lower than this due to the collapse in RBS's share price over the last 12 months.

Tel  26 Jan 2012    Bankocracy Log    Coalition Log    Corporate State Log

Hester's £35.5m pay deal fuels renewed anger

RBS chairman waives share award

Treasury feared Hester and board would quit

RBS boss bonus 'capped below £1m'

RBS risks row over 'unacceptable' Stephen Hester £1m bonus

RBS axes 3,500 jobs at investment arm

The move at Global Banking and Markets (GBM), which has employees in Stoke, Manchester, Edinburgh and London, follows Government pressure for the 83% state-owned bank to pull back from its ambitions to be a global investment player ...

The job losses come amid reports that John Hourican, the head of GBM who will continue to oversee the restructuring of the business, is in line to pick up £4 million in long-term incentive shares that he was awarded in 2009.

The latest round of job cuts come on top of 2,000 losses announced by the bank last summer.

The new losses will mean nearly 11,000 posts have been cut at GBM from the pre-banking crisis headcount of 24,000 ...

Ind  12 Jan 2012    A 'Greed is Good' Wealth Log    Bankocracy Log    Economic Democracy

RBS chief in line to pick up more bonus millions

Bankers ready to sue if bonuses too small

British banks should brace themselves for claims from "disgruntled" bankers who will not roll over and accept lower bonuses than usual despite the huge public and shareholder backlash against out-of-control pay ...

City lawyers said an increasing number of bankers were building cases in preparation of lower bonus payouts and were prepared to fight it out at court ...

Richard Fox, employment partner at law firm Kingsley Napley, said ... Bankers who did not "trust" the reward they received could work out what they thought they should have got based on a calculation of the bank's profits and their share in the type of bonus pool available ...

Tel  02 Jan 2012    Bankocracy Log    "I'll do as I like"    Wealth Log

Are banks heeding King's bonus call?

By the end of September 2011, the big three banks had amassed a bill of around £9bn to pay their investment banking staff.

Using figures provided by Barclays, HSBC and bailed-out Royal Bank of Scotland, it can be estimated that the three were expecting to pay £3.9bn, £3.1bn and £2bn respectively on employment costs for the first nine months of the year ...

How does the £9bn total compare with the same time a year ago? Then the number was a little over £10.5bn so it represents a fall of around 15% ...

The Bank's Financial Policy Committee – the body set up to look for systemic risk – is also preparing to look at the way the performance of top bankers is measured.

One influential FPC member – Andy Haldane – has already produced figures showing that bankers' pay at the seven biggest US banks would have risen from $2.8m to $3.4m on average between 1989 and 2007 if it had been based on return on assets (risks) rather than return on equity (shareholders), which had sparked a tenfold rise to $26m on average by 2007 ...

Gdn  05 Dec 2011

Welcome to the living dead economy

Hayek would say that the zombie-like state of affairs has been due to the refusal to allow banks that lent irresponsibly to go bust ...

Gdn  04 Dec 2011    A 'Greed is Good' Wealth Log    Bankocracy Log    What caused the credit crunch?

Shareholder interest is a thing of the past

Is narcissism the new capitalism?

What is it about high corporate pay that so enrages us?

We discovered last week, through an Incomes Data Services survey, that FTSE 100 chiefs earned an average of £3.8m last year.

Some of the highest paid, such as Sir Martin Sorrell of the advertising giant WPP, received £4.2m, while Xstrata's Mick Davis took home £18m.

Both have been highly successful ... But are they worth a 40 per cent – after stripping out inflation – increase year on year? ...

Executives defend themselves by claiming that they operate in a competitive, international free market for talent.

That's patently not true. It's a distorted market fed by this closed shop. It's become too easy for directors to make fortunes because of these incentives, which are the corporate equivalent of MPs' expenses and bankers' bonuses ...

All this is giving rise to a rather uncomfortable narcissism which is infecting the corporate world and giving capitalism a bad name.

That's why it was disappointing that Sir Martin sounded so petulant when he was interviewed on the radio last week to comment on his bumper package.

It was a great chance for him to explain to the public, and to show that he really was "worth it".

Instead, he came across as pompous by claiming his base £1m salary was "very low" – not the sort of remark to make when for most people real incomes are declining ...

Ind  30 Oct 2011    A 'Greed is Good' Wealth log    Is capitalism the only game in town?    Pawns or Players?

Gordon Gekko    Inequality    'No such thing as society'

Cover-up at St Paul's

Bosses' bonuses up by 187% since 2002

Average bonuses for directors of FTSE 350 companies have risen by 187% since 2002, without a corresponding rise in share prices, new research suggests.

The High Pay Commission said on Monday that average annual bonuses were worth 48% of salary in 2002, but are now 90%.

Commission chairman Deborah Hargreaves said it was a "myth" that big bonuses meant companies performed better ...

During the time bosses' salaries rose by 63%, said the report, which is due to publish its full findings in November ...

The study also found that total pay packages for company executives in the wider FTSE 350 had gone up by 700% since 2002 ...

Pay levels for the average worker in Britain have risen by 27% over the past decade ...

BBC NEWS  05 Sept 2011    Corporate Sociopathy    'Greed is good' Wealth Log    Inequality

City pays £14bn bonuses despite Project Merlin

Banks and other financial companies paid out an unchanged £14bn in bonuses last year despite the Government's Project Merlin deal with the big banks to show restraint on the payouts.

Financial and insurance bonuses made up 40 per cent of the total £35bn paid in UK bonuses in 2010-11, Office for National Statistics figures showed.

The average financial-sector bonus was £12,500, compared with £1,670 for the whole private sector and just £180 for public-sector workers.

The financial-sector total is more than the £12bn paid at the height of the crisis in 2008-09 but below the £19bn at the market peak in 2007-08.

Financial-sector bonuses remained 58 per cent higher than a decade ago and double the total paid out in 2002-03 as the market moved from the dot.com crash to the debt boom.

Bonuses in the financial industry have held up even as the Government has announced public-sector job cuts and ordinary workers in the private sector have seen their living standards eroded by rising prices and static wages ...

Ind  20 July 2011    Coalition Log    Barriers ... Green Economy Log    Falling Living Standards    Inequality    

Graduate gloom as 83 apply for every vacancy

BSkyB deal delay to cost City advisers millions

The bankers are estimated to be heading for a total payout of £85m, with the lawyers securing just under £70m, according to data drawn up by Thomson Reuters/Freeman.

Yet the lion's share of fees in merger and acquisitions are dependent on whether the deal is completed.

"Advisers are paid a base fee but that is only a few thousand pounds," the banker said. "The real payment comes on completion."

There could be even more at stake, he added, depending on how the advisers were incentivised.

He said the industry average for fees was set at about 4 per cent of the estimated value of the target at the close.

If News Corp is forced to bid 850p per share, valuing the whole group close to £9bn as estimated by analysts, the fees could go as high as £360m ...

It emerged this week that investment banking fees are booming once again. The total sum paid for advisory work – which includes raising money as well as takeovers – in the first half hit $48.8bn worldwide, up 22 per cent on a year ago. It was the highest level since before the credit crunch.

Ind  08 July 2011    Bankocracy Log    'Greed is Good' Wealth Log    Merger Mania

Rupert Murdoch

RBS bankers get £950m in bonuses despite £1.1bn loss

Len McCluskey, the general secretary of Unite, said:

"Taxpayers will today be baffled as to how it is possible that while we own 84% of this bank it continues to so handsomely reward its investment bankers.

"This is an institution in which over 21,000 front-line and support staff have been sacked, RBS still refuses to lend enough to small businesses and bonuses are free flowing.

"Because of our taxpayer funding RBS is gradually recovering from the mess caused by its greedy bankers. Yet the chancellor continues to tolerate the award of some £950m in bonuses to the culprits, instead of ensuring our taxes do not become worthless."

Stephen Hester, who was parachuted in as chief executive during the bailout in October 2003, said: "RBS's recovery is ahead of schedule." ...

Guardian  24 Feb 2011

Royal Bank of Scotland loss narrows as bad loans fall

Slap corporation tax on bank bonuses

Unions will call on the government today to wring more tax revenue out of the banks after Vince Cable conceded it had failed to prevent big bonuses and that the payouts to be announced in the coming days would be "offensive" to most people.

The business secretary said most people could not comprehend the scale of the "extraordinarily large bonuses" and added:

"The banks are ultimately underwritten by the state, they effectively have a state guarantee. That's what makes the enormous payments so offensive." ...

Guardian  14 Feb 2011     The Bonus Culture & the Destruction of Society

The economics of turning people into things

Lib Dem Treasury chief attacks 'unacceptable' secrecy as £7bn bank bonuses near

As campaigners for a "Robin Hood" transaction tax stepped up their campaign to raise £20bn from banks, the coalition was also under fire from opposition MPs for not doing more to end the bonus culture, which has been under scrutiny since the 2008 banking crisis.

Lord Oakeshott, a Liberal Democrat treasury spokesman, said this was a moment for the coalition to act, particularly on forcing more disclosure from banks on the amount they pay ...

The government has backed down from Labour plans to force banks to reveal how many employees earn more than £500,000.

Labour wanted banks to publish the details in bands beginning at £500,000 to £1m and increasing in £1m bands thereafter.

[Lord] Oakeshott said: "We now know 172 civil servants earned more than the prime minister, but thousands of public sector bankers at Lloyds and Royal Bank of Scotland earn far more. It is utterly unacceptable to hide what we pay them."

He called for action from UK Financial Investments, set up in the crisis to manage government stakes in bailed-out banks:

"The Treasury abdicated responsibility for control of bonuses to UKFI under Labour and can't go on turning a blind eye." ...

Guardian  07 Jan 2011    Fiat Currency Banking

Bankers' bonuses: the great government climbdown begins

Bank bonuses 'to run to billions in 2011'

FSA banking code will not cover many City bonuses

Many financial firms will be exempt from the most onerous requirements of the Financial Services Authority's new code on bonuses, it emerged today – just as David Cameron stepped up his rhetoric against City pay ...

The City regulator's new code on bonuses follows last week's announcement from the Committee of European Banking Supervisors (CEBS) of new guidelines intended to limit cash bonuses to 20-30%, with the rest paid in shares and deferred by up to five years.

Although Cameron and Clegg talked tough, behind the scenes Tory and Liberal Democrat MEPs had been trying to water down the new pay code – so that up to 40% of a bonuses could be paid in cash – before it was passed by the European parliament last week ...

Guardian  17 Dec 2010    Alternatives to FRB    The Achiles' Heel of Recovery        

Banks to blame for lack of lending

RBS admits that more than 100 bankers awarded over £1m each

Innocent Frauds Meet Goodhart’s Law in Monetary Policy

George Osborne plans to cut levy on banks' balance sheets

Treasury considers cutting proposed levy after learning it could raise an unexpectedly high £3.9bn a year ...

Richard Murphy, director of Tax Research UK and an advisor to the TUC, concurred.

"It is designed to be modest ... £2.5bn is a modest charge especially if set against bank bonuses of £7bn."

The Centre for Economic and Business Research has forecast that £7bn will be paid out in bonuses this year, with about half of that being paid in personal taxes.

In last month's comprehensive spending review, Osborne said that the bank levy needed to be set in such way to extract the "maximum sustainable" tax revenue.

City sources said the move was recognition that if the levy was set too high banks might be driven offshore ...

Observer  14 Nov 2010

Bleating bankers need to find a new tone to persuade us of their value

The banks' moans fall into three categories: bonuses, tax and immigration. Fiercest of the bugbears, as ever, is pay – particularly European Union stipulations that 80% of bankers' bonuses must be paid in shares, deferred for three or four years.

Investment banks claim this makes it hard to persuade their staff to move to London – and that it does little to discourage risky behaviour.

Finance hardliners still feel that the entire debate is rooted in envy.

One insisted: "We can live in a world where 'if I can't have it, you can't have it'. Or we can live in a world where we try to make the cake as big as possible."

marukun
14 November 2010 12:56AM

Neither the bankers nor the Tory party seem to understand that they have pretty much destroyed the UK economy and meanwhile the rest of the world has moved on (to China, India and Brazil).

UK financial services is a laughing stock outside the UK. Their only business these days is skimming of profits from the foreign exchange transactions required by global trade, bidding up commodity prices (including our food) by speculation, tricking pension funds into buying complex, rigged derivatives and helping companies avoid taxes (a Barclays speciality).

Any yet we are meant to embrace this activity as a great British business?

Paying bankers more bonuses is nothing but throwing good money after bad.

They have nothing constructive to offer the economies of Europe or the US - they have proved that by misdirecting our savings by the trillions into dud investments like American mortgages. For God's sake, in the US they cant even get the basic paperwork right as the US foreclosure crisis shows.

The government should be working to get these parasites off our backs and putting the little money the country has left to something useful.

Lets not just leave it to the students to show this country what they think of the present government.

gothicform
14 November 2010 2:50AM

It seems that the banks like HSBC, Barclays et al seem to forget they are PLCs.

They exist not to funnel bonuses to their staff but to funnel dividends to their shareholders.

It feels increasingly like shareholders of banks are the ones stumping up capital for what are effectively partnerships - just no one ever bought us out.

ALL the banks could cut their bonuses by half, still pay people obscene sums and shareholder dividends would be able to go through the roof.

Of course, that would mean banks actually following through their obligations as PLCs... fat chance there.

It seems apparent to me, as a shareholder, they are out to screw everyone be it the taxpayer or the investor simply to help enrich their staff even more.

Observer  14 Nov 2010    Cutting the Deficit    'We're all in it together'

Bleating bankers

Cable rows with bank bosses during China mission

Business secretary Vince Cable today appeared to undermine efforts to promote British companies in China after he became embroiled in a row with UK bank chiefs on a trade mission to Beijing.

Cable dismissed concerns voiced by the bosses of Royal Bank of Scotland and Standard Chartered that a crackdown on bonuses could trigger an exodus of talented staff to Asia.

Cable said warnings that banks may quit London were "a familiar negotiating technique" and should be set against the interests of taxpayers to make them safe ...

Guardian  09 Nov 2010    Corporate Sociopathy    

RBS falls back into the red

Spare a thought for the 'star traders' p155ed-off with RBS's bonuses

The bank's lending to large and small businesses has reached £30.9 billion since March and RBS confirmed it was on track to meet the Government-set target for £50 billion gross lending in the year to March 2011.

The bank's investment banking business had a tougher quarter, with more difficult conditions leaving revenues in Global Banking and Markets down by a fifth.

But in a move likely to stoke further anger over pay and bonuses within state-backed players, RBS revealed it increased its compensation ratio - staff costs as a percentage of revenues - in the GBM division to 40% in the third quarter.

This was higher than the 32% in the previous quarter and the 35% a year earlier.

RBS defended its decision to set aside more in investment banking pay in the face of falling revenues at GBM.

The group said it needed to pay competitive rates to retain staff as it continues to see departures of star traders at an "uncomfortable" pace ...

Independent  05 Nov 2010    Banking Commission    Fractional Reserve Banking

RBS recovery on track despite £1.4bn loss

Anger over 'life bonuses' for NHS consultants

In a scheme which is now being reviewed, the top doctors in England are given the awards on top of their basic pay of £89,400, the BBC said, with a loophole in the system meaning they receive the bonuses for life ...

Independent  13 Oct 2010    

CBI leader calls for bank bonuses 'ceasefire' as cutbacks bite

Richard Lambert, the director-general of the Confederation of British Industry (CBI), called on banks yesterday to agree a "global ceasefire" on bonuses, warning that the impact of a string of multimillion-dollar "transfers" of star traders could be "toxic in the extreme" ...

Mr Lambert said:

"The political costs of failing to agree a global ceasefire are likely to be substantial.

"It won't be enough to say that without a level playing field around the world, nothing can be done.

"Carrying on with business as normal would seem arrogant and out of touch, and further erode public trust."

Mr Lambert's remarks came just days after a report by the Centre for Economics and Business Research (CEBR) forecast that City institutions planned to spend £7bn on bonuses this year, which helped to reignite the furore over the issue and led to fresh accusations of banks indulging in "casino capitalism" ...

Independent  12 Oct 2010    Commission on Banking    Fractional Reserve Banking    We're all in it together

Boris Johnson warns banks on bonuses

The bonus season is coming – and Ed Balls is right to foresee a train crash

Banks need to do more this Christmas than hand out bumper cheques to their staff, says Boris Johnson ...

Whether Balls is right or wrong to prophesy a new slump, the banks have got to understand that this year public feeling may be even more inflamed than last and politicians will be facing colossal pressure to appease public indignation – and the risk is that this year they may take steps of a fiscal or regulatory kind that would do long-term damage to London as a financial centre and as a tax generator for the rest of the economy.

We need two things to happen. We need the Government to be vigilant about the risks of a double-dip recession. And we need the bankers to break the habit of a lifetime and anticipate this problem.

We still have time.

There are months to go before we see this combustible contrast, between public sector lay-offs and vast bankers' bonuses.

The executive jet and the passenger-laden jumbo have entered the same airspace, at the same height; but there is still time to change course.

The banks have three months to get together and work out a way of showing restraint and a real commitment to the poorest and the neediest in our capital city and the country as a whole ...

If they fail, there will be many who find an unbearable contrast between the fortunes of the bankers and those of the wider public ...

Telegraph  06 Sept 2010    

Boris Johnson raises doubts over government's deficit reduction plan

Ed Balls has the power to make or break Labour

Ed Balls: a new slump looms

Bank bosses' bonuses will not be deserved

All thanks to 'Keynes Lite'

Bankers are starting to feel good again. Anyone who attended the last round of results presentations could see that for themselves ...

Profits have returned. It's bonus time again! ...

If January shows a continuation of the banking sector's recovery, S&P's analysts say it won't be down to managements ...

In the view of S&P, "the more important contributory factors [to the improvement in performance] were the developments beyond the control of the banks' management".

These were government stimulus packages, the partial recovery of property markets, and the relatively resilient employment market ...

In other words, this time they got lucky ... S&P's report is worth filing away for when bank bosses start talking about how they deserve the multimillion-pound bonuses they will be paying themselves at the end of the year.

Independent  27 Aug 2010    Fractional Reserve Banking

Reports of £150m police pay-outs spark row over bonuses

Requests under the Freedom of Information Act uncovered the £150m figure, according to the Daily Telegraph which said some individual officers were receiving tens of thousands of pounds per year in "incentive" payments.

The bonus system, devised by former Home Secretary David Blunkett, was designed to reward officers undertaking the most demanding jobs such as recovering bodies or those who show consistent high standards ...

BBC NEWS  14 Aug 2010    

Police receive bonuses just for doing their daily job

Sir Paul Stephenson calls for end to police bonuses

Police bonus programme slammed

Big earners are still safe in their glass towers

The FSA may talk as if it's getting tough on the City, but it seems it has already run out of steam ...

In a detailed report, the FSA shows that of the 27 firms netted by its first regulatory trawl, 2,800 bankers got more than £1m, almost 90% of the total in bonuses.

Thousands more lower down the food chain also benefited from bonuses, usually worth at least 80% of their total income ...

Safe from the protests of ignorant consumers and from intervention by a government fearful of killing the golden goose, banks feel secure.

A little heat could be applied by the agents whom consumers pay to handle their money. Fund managers, pension trustees and independent financial advisers could exercise some control to the benefit of ordinary savers.

It does not happen and is unlikely to happen when this small and shadowy group are under instruction to maximise short-term profit for their customers.

They also benefit from fees and commissions that oil the industry's wheels.

The FSA chairman Lord Turner famously said that much banking activity was socially useless.

It's a pity the debate he sparked last year already seems to have run out of steam.

Guardian  29 July 2010    Commission on Banking    Fractional Reserve Banking

Fresh bonus fears as bank profits rise

Banks ignore pleas and cut loans to the real economy again

Almost 3,000 City staff took home more than £1m last year

Bankers' earnings surge towards pre-crash levels

Pay and bonuses totalled £20.5bn in four months to April, compared with £24bn at height of boom in 2007 ...

The steep rise in earnings is likely to put pressure on the coalition government to impose a clampdown on City pay practices, which the Liberal Democrats in particular attacked while in opposition.

Guardian analysis of data from the Office for National Statistics shows that bankers were paid £8.5bn in bonuses in the four months to April, compared with £7bn during the same period last year.

There was also a jump in pay across the industry of £1bn to £12bn as bankers shifted some of their earnings away from bonuses to avoid the former Labour government's bonus tax ...

Guardian  13 May 2010    Corporate Sociopathy    Economic Democracy

Barclays Capital's bonus and pay set at £1.4bn after strong first quarter

Good to know the recession's over at Barclays, isn't it?

• Barclays first-quarter profits at £1.8bn, 47% up on 2009
• BarCap profits up 62%, with 38% of income set for bonuses

Chief executive John Varley highlighted a fall in impairments to £1.5bn, down 35%, for helping to fuel the group's total profits.

"I am pleased with the strong growth in profits which we have delivered this quarter. Diversification of our business and risk, and good underlying performance, have combined to produce this result. The improvement that we have seen in impairment reflects the signs of economic recovery now evident in many of the markets in which we operate," Varley said ...

Guardian  30 April 2010    

NHS boss earned £68,000 in bonuses - on top of six-figure salary

"Dr Patrick Geoghegan ... who earns £170,000-180,000 received
 £20,573 in the same year for helping it do well against NHS targets."

Notice Dr Geoghegan received bonuses for hitting targets, not for patient care.

Anna Walker, who was chief executive of the Healthcare Commission until it was disbanded last year, earned the largest combined amount in the past three years – £68,150 on top of her six-figure salary.

She received £22,375 in 2006-07, £23,000 in 2007-08 and £22,775 in 2008-09 for running the then NHS watchdog in England ...

This is the first time both the number of bonuses and their size has been disclosed. The Lib Dems sought information from every hospital trust, primary care trust (PCT), mental health trust and ambulance service in England, as well as other NHS bodies such as strategic health authorities. While some pay no bonuses, many do.

However, the figures do not reveal the full picture because some refused to disclose theirs and a few simply gave their chief executive's salary band.

The £32,000 one-off bonus and the £68,150 over three years are large but not atypical.

Laura Roberts, chief executive of the Manchester PCT, received £25,732 extra in 2008-09, while Dr Patrick Geoghegan, her counterpart at South Essex Partnership mental health trust – who earns £170,000-180,000 – received £20,573 in the same year for helping it do well against NHS targets ...

Observer  25 Apr 2010    

How 'high quality' service helped four Royal Mail bosses earn £310,000 in bonuses

Those bonuses are now likely to be called into question after it emerged that the company’s market research is being manipulated by staff ...

The latest directors’ remuneration report by Royal Mail Holdings plc states that 30 per cent of the bonus paid to the company’s top executives is based on “service quality” which includes the delivery times of letters and parcels. The remainder of the bonuses are based on the company’s profits.

In 2008-09 Adam Crozier, the chief executive of Royal Mail Group, was entitled to a performance-related bonus of £453,000 on top of his basic salary of £633,000. A total of £135,900 of the bonus was based on “service quality”. He opted to put £314,000 of his bonus into a Long Term Incentive Plan, meaning he will only get the money if Royal Mail hits future targets, leaving him with a total pay package of £995,000, the second-highest of any public sector boss.

During his seven years at Royal Mail Mr Crozier, 46, controversially ended twice-daily deliveries and moved delivery times to later in the day, meaning many households do not get their mail until lunchtime at the earliest. He has also axed 45,000 jobs.

Telegraph  13 Mar 2010    Wealth Log

Royal Mail delivery tests 'rigged'

Public sector faces pay cuts

“In some quangos, local authorities and other organisations, the level of pay, especially at the top end, and bonuses have reached the stage where they don’t pass what I call the next-door neighbour test. If you can’t justify them to your neighbour, you’ve probably got it wrong,” Darling said ...

Darling is also concerned by “special performance” awards in Whitehall. He admitted the payments were not always a reward for exceptional work.

Embarrassingly, the practice is rife in the Treasury. Figures in a parliamentary answer show 73% of Treasury staff had “special performance” awards, averaging £8,030, last year ...

Times  24 Jan 2010

Top

Bonus time as banks pay out £40bn

The world's biggest investment banks are expected to pay out more than $65bn (£40bn) in salaries and bonuses in the next two weeks, reinforcing the view that it is business as usual on Wall Street and in the City barely a year since the taxpayer bailout of the banking system.

Despite efforts by Alistair Darling to deter banks from handing out multi-million pound bonuses through the introduction of a 50% windfall tax, City sources believe that the biggest employers will absorb the cost of the tax rather than cut the size of the bonus pools they amass throughout the year.

This will mean that ... government will have failed to alter the traditional bonus culture in the City.

Lord Oakeshott, the Liberal Democrat Treasury spokesman, described the size of the potential bonuses as "global greed by banks when global governance has failed".

He added: "Britain's bonus tax only toys with the symptoms of the sickness, not its cause. These last few investment banks left standing have state-backed licences to print money so they must pay supertax on their superprofits, not hold taxpayers to ransom."

Guardian  08 Jan 2010

Analysis of parliamentary questions and departmental accounts found the Whitehall bonus pot for 2008/09 added up to £129,393,139 - around £2 for every man, woman and child in the UK.

The figure was made up of end-of-year payments and rewards for performance on projects throughout the year.

The performance-related pay in Whitehall has spiralled despite assurances that senior civil servants were willing to show restraint during the recession when many in the private sector are having to take pay cuts or accept a wage freeze ...

Telegraph  23 Dec 2009

Nearly £5m has been paid in bonuses to staff at a funding body criticised for the "catastrophic mismanagement" of a college re-building scheme in England.

Figures released to the Conservatives show the money was shared by 3,106 staff at the Learning and Skills Council for the year to March.

The LSC was also criticised last year over delays in learning grants ...

In 2009, £4,868,463 was paid in bonuses to LSC staff - £200,000 more than in the previous year.

The funding body's chief executive Mark Haysom resigned in March, shortly before publication of the damning independent report on the building programme.

Mr Haysom did not receive a bonus payment for the year to March but took six months salary in lieu of notice.

The LSC's annual report shows he did receive a bonus for the previous year (up to March 2008) amounting to £36,000 ...

The LSC was criticised in the independent inquiry into the handling of a £2.3bn budget for 2008-11 for the rebuilding of colleges in England.

In short, the body had promised colleges funds for rebuilding projects after it had used up its budget.

Colleges had invested money in preparing their bids for the cash.

Report author Sir Andrew Foster said "the crisis was predictable and probably avoidable" and blamed poor management.

He said the crisis could have been mitigated if action had been taken earlier and that as early as February 2008, the LSC had been warned of a likely overspend, but this was not acted upon.

MPs on the Commons Innovation, Universities, Science and Skills Committee later complained of the "catastrophic mis-management" of the scheme ...

BBC NEWS  19 Dec 2009

College building scheme 'flawed'

Colleges face £170m projects loss

Colleges in building funds limbo

Inquiry into college renovations

Private equity firms using company debt to enrich themselves

Private equity firms are increasingly saddling companies with debt to pay themselves hefty bonuses, according to an industry-sponsored study.

A group of 47 private equity-owned businesses – including United Biscuits, sports chain Fitness First and casino operator Gala Coral – now have an accumulated debt of £71bn, up £13bn from their combined debt before they were taken over, said a report by BVCA, the British Private Equity and Venture Capital Association.

Of that £13bn, new owners directed £11bn towards acquisitions and capital expenditure programmes while £2bn went to pay shareholders of the private equity funds through measures such as special dividends.

Apart from the private equity companies themselves, fund investors also include pension schemes and other institutional shareholders.

Paying cash dividends out of debt – instead of profits – has been widely criticised by ratings agencies, which warned about the high levels of debt used by private equity firms at the peak of the credit bonanza.

"Using debt to pay dividends to shareholders in an excessive manner will ultimately damage the company when the cycle turns," said Pablo Mazzini, senior director at the Leverage Finance unit at Fitch Ratings in London.

Many private equity firms raised debt by convincing lenders that profits were rising when the growth was mostly attributable to general economic conditions.

Some buyout businesses are now suffering as they cannot sustain their high debt.

The study said that the quality of debt also falls after a private equity buyout.

The highest-ranked "A" debt accounted for 65% of total debt before a buyout, but only 54% after.

Lower quality debt is more expensive for the company as investors demand higher interest in exchange for the risk of ranking below senior creditors for repayment if a company goes bust.

According to the report, private equity companies are better at generating pre-tax profits than other firms, although they lag far behind in terms of job creation: while employment grew at 0.1% at private-equity-owned businesses, it increased 5.2% at other firms.

Average company revenues rose by 9.6%, more than the 9.1% growth among private-equity-owned firms, but earnings before interest, taxes, depreciation and amortisation rose by 11% at private equity-owned companies, compared with a fall of 0.7% for other firms.

Guardian  10 Dec 2009        

Staff at the Student Loans Company received almost £2m in bonuses last year, figures revealed.

The payouts, some of them five figure sums, were made while a system that has left thousands of students waiting for grants and loans was being developed.

The Liberal Democrats, who uncovered the bonuses under Freedom of Information laws, said rewarding failure was unacceptable.

The SLC said it operated a bonus scheme structure to reward hard-working staff.

SLC admitted that some £1,893,500 was paid in bonuses during 2008-09. Three bosses received £21,000 bonuses, while two got payouts of £15,000 and five were given £10,000.

Some 1,603 of the SLC's 1,876 staff picked up rewards.

The figures also showed senior executives racked up an expenses bill of £110,596.31 - £28,000 more than the previous year.

In total staff claimed more than £1.2m in expenses, up from £793,000 in 2007-08.

Ministers ordered an inquiry after tens of thousands of students who had applications approved were left without funding at the start of the new academic term.

This year was the first time first year students applied directly to the SLC for grants and loans.

The new arrangement has been beset by problems as the Glasgow-based firm struggled to cope with a higher number of undergraduates and deal with technical problems ...

BBC NEWS  16 November 2009

Thousands wait for student money

New students still without funds

Student finance 'shambles' anger

Civil servants at the Ministry of Defence have been paid £47 million in performance bonuses this year ...

The figure, which covers just the first seven months of the current financial year, has been revealed as the Government faces charges of failing to provide British troops with adequate support and equipment on the front line in Afghanistan.

Additional bonus payments for the rest of year could take the total above the £53 million paid out to MoD officials in 2008/09.

There are 85,000 civil servants at the MoD, one for every two active troops. Around 50,000 of them will get a performance bonus this year.

The MoD has claimed that the bonuses would average less than £1,000, but some officials will get much bigger payments.

Last year, the department had senior 95 employees who were paid salaries of more than £100,000; and the average bonus for a senior civil servant in the department was £8,000.

An Army private can be paid as little as £16,681, with a £2,380 bonus for serving in Afghanistan ...

Telegraph  11 November 2009

The Royal Bank of Scotland, which was bailed out with government money 12 months ago, has set aside almost £2bn for bonuses and salaries to investment banking staff – a figure that could double by the end of the year.

After a week in which Goldman Sachs admitted it is on track to pay out its biggest ever bonuses, the Edinburgh-based RBS conceded that it too would be likely to offer bonuses to its 20,000 investment bankers this year.

The remuneration bill for the investment bank division at RBS in the first half of 2009 reached £1.8bn – equal to £90,000 a head.

The final total is expected to rise substantially, by the time a decision on bonus payouts is made by the bank at the end of the year ...

Stephen Hester, the chief executive of RBS who has a £9m pay deal, has already defended the need to pay bonuses because of a "damaging but not yet destructive" exodus of its big City players who were poached during the political row over bonuses at the bailed-out bank last year ...

Lord Oakeshott, the Liberal Democrat treasury spokesman, said: "This government has granted a goldmine to a few investment banks. They've bailed them out and effectively pulled the plug on the competition, so we must come up with our share of the loot when it comes up the mine shaft."

An RBS spokesman said: "We have led the way in reforming how we structure our rewards to staff, aligning incentives more effectively to long-term performance."

But Unite's MacGregor said: "The greedy investment bankers have learnt no lessons from the financial meltdown. The actions of these top bankers brought catastrophe to our economic system, yet they continue to be rewarded generously."

Guardian  18 October 2009

How have bankers managed to make such significant sums again, barely a year after the entire financial system came to within an inch of collapse?

One reason is competition – or lack of it. Despite the fact that the recession has taken hold, life goes on and companies still need to invest, to grow, to borrow and occasionally to take each other over.

Each of these tasks necessitates a visit to their investment bank which, in the same way that a high street bank will provide money services for an individual, will do everything from lending money and helping sell bonds, to issuing shares and insuring against future collapse.

The difference between now and a year ago is that Wall Street and the City are significantly smaller places.

With the disappearance of so many of the old names, Lehman Brothers and Bear Stearns most notably, plus the fact that there are a significant number of walking wounded such as UBS and Merrill Lynch, the remaining banks can get away with charging significantly more for simple "vanilla" services.

Quite simply, whether you're a business or one of those finance ministers in Istanbul needing to raise money, there are fewer places to go for help.

Another explanation for the bankers' success is that the markets have been flooded with cheap money by central banks, the Bank of England and the US Federal Reserve chief among them. The by-product has been that, with interest rates so close to zero, there is next to no incentive to save.

So money has flown around the system in search of any kind of investment that can offer a decent yield.

Given that investment banks are usually the middlemen in the process, they have benefited immensely from this central bank-created search for yield.

Quantitative easing – by which the Bank of England has been creating money and using it to buy government debt in order to boost the economy without bringing down interest rates any further – has also created a nifty carousel for investment banks to buy gilts on the cheap and sell them back to the Bank at a profit.

And so the merry-go-round has sped up again ...

Telegraph  16 October 2009

An unwelcome bonus culture is creeping into head teachers' pay, diverting funds from the classroom, a teachers' leader is warning ...

Speaking at the Association of Teachers and Lecturers fringe at the TUC Congress in Liverpool, Dr Bousted said her union did not object to heads being paid a fair wage for a demanding and increasingly insecure job.

But, she warned, schools could now pay their heads more than the statutory national pay scale for school leaders (£102,734 outside London), and that there was evidence of some heads receiving bonuses as well.

She said: "The vast majority of school leaders in England and Wales still see education as a public service, but a few have been seduced into seeing it as a chance to make money.

"We strongly support schools working together to share good practice, and we strongly support school leaders working together.

"But we do not support the growth in executive heads, consultant heads, super heads, and super duper heads."

She added: "If there is an executive head plus a head in a school working under him/her, who is being paid for what?"

"Let's not forget that every pound of bonus paid above the school leadership pay scale if a pound less for books and equipment for pupils, and less for classroom based staff." ...

BBC NEWS  16 September 2009

Bonus secondary teacher suspended

'Golden hellos' for head teachers

The entire governing body of a comprehensive school was sacked yesterday by Children's Secretary Ed Balls following a row over bonus payments to its head and senior staff.

An interim board will now be set up to run Copland Community School in Brent, north-west London, after it emerged that its head, Sir Alan Davies, was paid a bonus on top of his salary of £80,00 last year and £50,000 two years ago.

Mr Balls said he was "very concerned" about allegations of serious financial mismanagement at the school. These are now being investigated by the National Audit Office while Sir Alan and the school's bursar have been suspended.

In all, it has been alleged that bonus payments worth £1.6m have been paid to senior staff at the school over a number of years.

The payments came to light when a teacher at the school, Hank Roberts, highlighted them at the Association of Teachers and Lecturers conference at Easter and claimed it was bringing the world of banking bonuses into education. He was subsequently suspended over another matter, but later reinstated.

They were defended by Dr IP Patel, chairman of the school's governing body, who said Sir Alan – one of the first "superheads" to be knighted under the Blair government – was "worth every penny".

The interim board to run the school will be appointed by Brent Council.

Mr Balls said: "Robust governance and management must be established as soon as possible at Copland."

He said there was "no alternative in putting Copland back on track" to replacing the governing body.

The Independent 24 June 2009

Ed Balls was of different opinion two months ago:

Bonus culture 'banking sickness' spreading to state schools

Hank Roberts, a senior member of the Association of Teachers and Lecturers, said taxpayers' money should be spent on books and employing more staff instead of "going to the top".

The comments came as it emerged the head teacher of one comprehensive in North-West London received £130,000 in bonuses over a two-year period.

Copland School, where Mr Roberts was formerly head of geography, admitted sanctioning the payments but insisted Sir Alan Davies, the head, was "worth every penny".

Ed Balls, the Schools Secretary, insisted there was "no reason" why heads should not receive bonuses, saying school governors should be free to make decisions on pay.

"I'm supporting great pay for head teachers who take on greater responsibility," he said. "I don't think there's any reason why there shouldn't be a pay package of benefits for head teachers.

"Linking pay to performance is something we in general sympathise with, obviously it needs to be done properly and responsibly and within sensible constraints, and genuinely linked to performance, I would have no objection to it." ...

Telegraph 06 April 2009

Bonus school 'removed' governors

London school governors sacked

School staff suspended

It's time to face up to the unpalatable truth - Labour's public-service reforms have failed. Determined to liberate public services from producer interests, the government itself has turned into the oppressor. It is now locked into a nightmare cycle in which each round of reforms makes things worse, justifying further reforms which founder in their turn because (you've heard this before) in attempting to do the wrong things righter, they actually become wronger.

Some of us have long suspected this is the case. But now we have Systems Thinking in the Public Sector (Triarchy Press), a new book by John Seddon (full disclosure: I helped to edit it) which pinpoints in detail why the reforms have gone wrong - and how to put them right.

Seddon pins the blame squarely on the coercive 'deliverology' regime dreamt up (the correct expression) by the Prime Minister's Delivery Unit (PMDU) in Tony Blair's first term. As he shows, New Labour embraced the 'public choice' theory that had so excited right-wing intellectuals under Margaret Thatcher: basically, applying economic principles to politics. The problem was that civil servants, like any 'producers', tended to put their own interests above those of the public they were supposed to serve.

Since they could not use the 'perfect democracy' of the market to tell public-service providers what to do, Blair and the delivery unit eagerly enlisted centrally set targets instead. They were reinforced by carrots and sticks wielded by inspectors and other enforcers, with the PMDU at the apex ...

Instead of making providers accountable to citizens, the new regime made them accountable to ministers and the burgeoning bureaucracy of performance management.

Do quotas and targets enforced by a regulatory bureaucracy remind you of anything? Yes: they're called central planning and don't work any better in UK local government offices and police stations than in Soviet tractor factories ...

The Guardian 04 May 2008

Ministers have missed 122 of 346 Whitehall performance targets

Hospitals do rig waiting lists to hit targets

Reforming the regime

Pay and Bonuses: More Links

Goldman Sachs bankers on course for $19bn pay and bonuses

Goldman Sachs CEO Lloyd Blankfein: "I'm Doing God's Work"

Public must learn to 'tolerate the inequality' of bonuses

Goldman Sachs exec defends bonuses

Rescued bank's traders scoop £1.8bn bonuses

Retention bonuses back at Merrills

Bankers bag £7.6bn in bonuses

Bank lending to businesses fell by £14.7bn

The banks' jackpot is no surprise

Bank profits and bonuses: a checklist

Big bonuses? It would be wrong to stop paying them'

Banks defend bonus culture as profits jump

'Coco' bonuses for Barclays executives

Hutton's Targets and Bonuses Plan

RBS 300 staff paid £1m plus

Ind

Whitehall bonuses rise during recession year

GPs to share £150m bonus pot
for spotting mental health problems

Goldman Sachs rewards staff with £9.6bn

Bob Diamond employed by US subsidiary

Bumper bonuses aren't compatible ...