The RBS Bonus Bonanza
The Royal Bank of Scotland is set to dish out record bonuses of up to £5m
While these numbers sound especially outrageous, taxpayers were heartened to learn that the bonuses of millions of pounds would only be available for the top 20 staff in the bank, the other employees of the struggling, functionally insolvent institution would only receive on average around 1/4 million pounds, brought down by including cleaning staff, the lunch room attendants, and delivery boys.
The pay packages in the investment banking division total £4 billion — easily surpassing those packages awarded at the high of the absurdity of the financial boom in 2007 and about 66% higher than those paid last year.
By a totally unrelated coincidence, RBS had to be rescued from financial collapse by the British taxpayers, and US taxpayers, courtesy of the AIG slight of hand with an injection of more than £20 billion.
The taxpayer now holds a 70% stake in the bank. Large bonuses will put RBS on a collision course with UK Financial Investments, which oversees taxpayers’ investments in banks. In a completely novel concept they’ve decided to let those that actually own an institution decide how much the employees make in compensation.
The RBS bonuses are the latest sign that either we’ve learned absolutely nothing or the piglets are looting in an ever frenzied pace to get all they can before the ultimate collapse of everything. In a miraculous turn of events the geniuses at the banks that have survived the financial crisis are now making huge profits in areas such as debt and currency trading, where free money, loaned with virtually no interest and inside information on rate moves and currency announcements have created trading opportunities.
Some traders in specialised areas are making bigger profits than before because of the chaos created by the collapse. After a series of forced mergers, there are also fewer competitors in a number of areas, allowing the banks to charge clients higher fees.
The bank has already provoked anger over a bonus package of nearly £10m for Stephen Hester, its chief executive, which he will earn if he turns round the bank. Hester has said in recent interviews that even his parents think he is paid too much.
Paul Myners, the City minister, has written to the boards of all the banks operating in Britain and reminded them that they should hold on to their cash to build up reserves, rather than hand it over to their executives and traders.
Lloyds Banking Group, which is 43% owned by taxpayers, has been working on plans for a multi-million-pound incentive programme for its top managers.
Last week Goldman Sachs, the American bank, which employs 5,500 people in London, announced that its staff would share about £13 billion in pay and bonuses.
Even banks that have lost money are believed to be considering enormous payouts to some of their senior investment bankers. Bank of America Merrill Lynch, which revealed a quarterly loss of more than £600m last week, is believed to be preparing to make big bonus payouts to staff in its London operations.
(note: you really wouldn’t believe some of the paragraphs that i just took out of this story as they ran a laundry list of banks and their bonus schemes coming up…you also probably wouldn’t believe how much of this story is left exactly as printed.)
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