Lunchtime Links: 1.7bn in bonuses at BarCap in the US; 360m in bonuses at RBS in the UK

6 February 2009

2 minute read

Lunchtime Links: 1.7bn in bonuses at BarCap in the US; 360m in bonuses at RBS in the UK

It's bonus time at many European banks and the indignation is flowing thick and fast. Peter Mandelson has warned British banks against a public outcry if they dare pay anything exorbitant and Robert Peston has published a diatribe on why bonuses should be reduced to nothing for several years. Amidst the furore, RBS is apparently planning to cut last year's 1.8bn.bonus pool by 80%. Meanwhile, in the US, where no senior exec is supposed to be earning more than anything more than $500k in cash if their bank's received money from the state, BarCap is reportedly obliged to pay a combined pay $2.5bn (1.7bn) to the people it picked up from Lehman.

Gordon won't stop RBS bonuses. (Bloomberg)

I predict that banks will start resetting the strike price of previously deferred bonuses, along the lines of what we have already seen from Google. (Baseline Scenario)

"The risk of departures of talented revenue generators is likely to be higher at UBS than at some other firms, which could potentially make UBS's turnaround more difficult." (Wall Street Journal)

Loopholes in Obama's pay policy. (Wall Street Journal)

Senior executive officer doesn't mean what you think it means. It basically means anyone paid as much as $500k. (Clusterstock)

Private equity funds want their pay capped too. (Financial News)

Deutsche Bank is willing to pay more than $500k for talented bankers. (Financial Times)

Boaz Weinstein behind the $1.8bn hole at Deutsche. (Wall Street Journal)

US government forced Lewis into buying ML. (Reuters)

BofA rises on hopes that government will suspend reality. (Clusterstock)

$20,000bn, just gone - wow. (Alphaville)

Guardian unearths Barclays' structured tax business. (Guardian)

Time to spend more time with your family. (Wall Street Journal)

Big rise in statutory redundancy payments planned. (Independent)

AUTHOReFinancialCareers UK

Insider Comment

Re
Realistic
12 February 2009
RBS MD you pay your money and your choice, we've all paid our fair share of taxes and NI -as a % of our earnings no matter how big or small!....but by getting up every day and going to work in the UK we make that choice (albeit sub-consciously).
Shame you have to be so arrogant about it though as it simply fans the flames that seem so intent on eliminating the bonus culture, so it might be in your interests (and mine) to find some humilty?...
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tr
trader
9 February 2009
RBS payed 16bn in corporate tax from 1998 to now. Not sure what contribution the employee taxes are but pretty sure it is a scratch. The frustrating thing is that the traditional mantra of banking is broken. I reckon 70-80% of market participants had RECORD years last year , particularly in global markets (even Vanilla Credit Default Swaps had a record turnout). Meanwhile the the damage caused by broken balance sheet on senior management decisions (warehousing CDOs etc) has broken the banks. Rewarding for failure is not the problem , the problem is the amount of success out there that has been hidden my the HUGE failures of a few. The traditional correlation between producers success and bank success has broken. Producers should experience massively diminsihed returns accordingly , their "market" value has also collapsed with the deleveraging process, no hedge fund bids or private equity to take you if disgruntled , however popularist comments like "rewarding for failure" should be kicked to touch immediatly before things get out of hand and the UK finance system becomes irredeemably damaged. 80% of the street did a phenominal job and limited the writedowns
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sc
sceptical of canary wharf
9 February 2009
so RBS MD, you never took a penny from the taxpayer? So you'll be keen to pay back the interest on the 22bn the govt have stumped up for you?
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RB
RBS MD
8 February 2009
Maggie, shows how ignorant you are - are every single one of the 177,000 RBS employees failures who caused a problem? All the till cashiers, FX salespeople, M&A relationship managers like myself? We had NOTHING WHATSOEVER to do with the crunch thankyou.
I think you'll find the fault of the mess was, in order, (a) Sharleyne in Alabama, unemployed for 4yrs with 6 children, taking out a $130k mortgage in Alabama, (b) the bozo who gave her the mortgage knowing he'd make a killing selling it to Wall Street, (c) Wall Street buying CDOs not realising the probability impayment, (d) investors who bought not knowing/caring either but wanting to not feel left out, etc etc. All of this is a SMALL TRANCHE of the banking sphere. What I do has NOTHING TO DO with the crisis, and same for the majority of my 177,000 RBS colleagues.
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ma
maggie
8 February 2009
RBS MD - since bankers are so smart arbitraging, wonder why you do not shop around other countries/citizenship with lowest taxes/least percentage of 'low-ambition, lazy useless people' for smart talents like yourself and bail out of UK? Frankly, much of the world has long been disgusted by the arrogance, greed , fake productivity and now the FAILURE of people like yourself. People like you are not the REAL producers of REAL wealth in the world.
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