I'm alright Jack

What did the actual workers receive?

HSBC increases top bonuses but cuts holidays

Trade union denounces move as ‘an outrage’

HSBC has increased the number of £1 million bonuses it paid out this year, at the same time as cutting annual leave entitlement for its workforce by two days in a move which has angered trade unions.

Yesterday, the bank announced pre-tax profits for 2012 of $20.6 billion (£13.7 billion), down 6 per cent on the previous year. Results were affected by a £1.2 billion money laundering fine in the US, plus £1.5 billion of PPI mis-selling claims in the UK.

HSBC confirmed that it paid 204 workers bonuses of more than £1 million for 2012, up from 192 in 2011. This included 78 employees in the UK, up from 64 the previous year.

Group chief executive Steven Gulliver’s remuneration package included a £2 million bonus – but overall he took home £614,000 less than in 2011, when he received £8 million.

HSBC also announced that it would be reducing staff holidays by two days a year, which followed news last month that the company would be closing its final salary pension scheme to future accruals.

But unions hit out at the latest moves. Unite claimed that this year’s bonuses of £1 million plus were worth four times more than the £46 million in savings that the business would generate through holiday and pension cuts.

“The savings the bank is making from these changes are a drop in the ocean compared to its profits and the bonuses being awarded,” said Unite national officer Dominic Hook. “HSBC can easily afford to provide decent pensions to all its staff.”

However, an HSBC spokesman told PM that the company did not recognise Unite's figures, and that the pension and holiday changes were “cost neutral” to the bank's overall employee benefits structure. He added that holiday entitlement was being harmonised at 28 days – so while some employees would be compensated for losing two days per year, others would see an increase in annual leave.

Meanwhile, Gulliver also defended the bank’s bonus payout, and insisted that the bank had made “significant process” as it underwent a restructuring process. Last year, the banking group disposed of 26 business, and axed 27,700 jobs, leaving a workforce of 270,000.

The HSBC results follows staff bonus pools of £607 million and £375 million announced by Royal Bank of Scotland and Lloyds Banking Group respectively, despite both banks reporting losses for 2012.

The European Union recently set out plans to cap bankers’ bonuses at one year’s salary, while in Switzerland this week the government was given a mandate to impose strict rules on executive pay following a public referendum. 

Bank rate scandal highlights culture issues

More legislation will not solve the problems of “culture and leadership” in the banking sector that have been exposed by the rate fixing scandal, the new chief executive of the CIPD Peter Cheese has said.

Barclays' chairman Marcus Agius and chief executive Bob Diamond have both announced their resignations this week after the bank was fined £290 million for attempts to manipulate the Libor inter-bank lending rate.

Attempts by traders to fix this rate were a serious breach of trust, as it is used by all banks to help set lending rates for mortgage customers, potentially resulting in higher costs for the public.

“The obvious reaction has been to talk of regulation and legislation, prosecutions, and even compensation for those adversely impacted,” Cheese said. “And while there are some gaps to be closed, the real issue that needs to be understood and addressed is that of culture and leadership. No amount of regulation will stop people from behaving unethically if they either don’t see it as that, believe they can get away with it, and particularly where the rewards outweigh the perceived risks.

“Culture is driven not just by what is said, but more importantly how senior people act, and what the organisation allows to become tolerated behaviour.”He said that HR has “a huge role” in both having the courage to confront cultural failures and in enabling the development of better cultures and behaviours through performance measurement and reward and learning and training programmes.

Tracey McDermott, acting head of enforcement at the Financial Services Authority (FSA), said that Barclays’ traders were open in their attempts to manipulate the Libor rate and that this misconduct is some of the most serious the FSA has ever seen. The bank has started a “root and branch review” of its work practices.

Other banks have been implicated in the rate fixing, with RBS sacking traders suspected of involvement and more household name banks under investigation.

The government has started a review into how lending rates between banks work, while the Serious Fraud Office is considering whether to bring criminal charges against bankers.

What was I saying about banks and the big brown giant UPS? 

UPS v. RBS

At least, by fair means or foul, UPS make a whacking great profit.

RBS still owe us a considerable amount of dosh. When they've paid that back, they can pay whatever bonuses they want.

If Stephen Hester wants to leave if he doesn't get his bonus....................then it should be bye,bye 

From the Guardian

Royal Bank of Scotland stoked a political row on Thursday night after it announced it had awarded its chief executive, Stephen Hester, a bonus worth almost £1m.

The payment was derided as "utterly unacceptable" by one Liberal Democrat peer, while a Foreign Office minister calculated that Hester's package meant he was paid in three days what a soldier in Afghanistan, "risking his life", earned in a whole year.
The bailed-out bank attempted to justify the bonus – which is being paid in shares that Hester will be able to gain access to in 2014 – by saying it needed to reward the chief executive for the progress he had made in reducing the size of RBS.
Since he joined in November 2008, the bank has cut 33,000 jobs.
The bank also stressed that a bonus Hester had been awarded when he joined shortly after the £45bn taxpayer bailout in 2008 – worth £6.4m at the time – and which would have paid out this year, was now worthless. (I doubt it)
Sir Philip Hampton, the RBS chairman, said tonight: "The board is aware of the difficulties in trying to reconcile the competing objectives of all our stakeholders. This is especially true on the issue of pay."
Hampton will also not receive shares that he was awarded when he joined in 2009 after the bailout.
He said Hester's bonus – which is 60% of the maximum and will involve the award of 3.6m shares – was being granted as it "reflects progress in the categories agreed with our shareholders as set out in the remuneration report". The 3.6m shares are currently worth £963,000 and could rise or fall in value by 2014.
Hampton added: "His pay is strongly geared to the recovery of RBS, which he was recruited to turn around, having played no part in its collapse. The priority is to reshape a business that was far too big and far too risky, reducing legacy losses whilst improving performance in the group's strong core businesses."
Hampton argued that a "safer and more valuable RBS is in the interests of our customers, shareholders and the UK economy".
The size of Hester's bonus sparked a wave of criticism and calls for him not to accept the money.
Lord Oakeshott, the Liberal Democrat peer who resigned as a Treasury spokesman for his party a year ago over the lax treatment of the financial sector by the coalition, said the bank should realise that any bonus for Hester this year was "utterly unacceptable".
Oakeshott is concerned about the slow flow of lending to small businesses, which the major banks, including RBS, committed to last year under the Project Merlin agreement. "The bonus would be a reward for RBS's failure to lend to small business which was the key target," he said.
Foreign Office minister Jeremy Browne, speaking on BBC1's Question Time, said that Hester should decline the bonus as "a question of honour".
"Even if there is a contractual opportunity for him to have it, it doesn't mean he has to accept it. He's already being paid more than £1m a year.
"His total package now means he gets paid in about three days what a soldier serving in Afghanistan, risking his life, gets in a whole year. I think he should reflect on that," the Liberal Democrat MP said.
Chris Leslie, Labour's shadow financial secretary to the Treasury, said: "Nobody doubts that Stephen Hester has done some important things at RBS, but what this award shows is David Cameron's promises about reining in excessive bonuses at state-owned banks or using shareholder power have proved to be utterly worthless.
"Indeed, anyone who thinks it is acceptable to award a bonus of almost £1m on top of a basic salary of £1.2m in these tough times is desperately out of touch with millions of people who are struggling to make ends meet."
"Instead of fiddling at the margins of this issue, David Cameron should take proper action on excessive executive pay as well as agree to Labour's call for a new tax on bankers' bonuses this year to fund 100,000 jobs for young people."
A Conservative Party spokesman said: "This is a bit rich from Labour given that they completely failed to do anything to curb multimillion-pound bonuses during their time in government – which was when the worst excesses of the City occurred. It would clearly have been unacceptable for Stephen Hester's bonus to have been the same as last year. So we are pleased it is less than half of that this year."
"The government has also made clear that it's capping cash bonuses at RBS at £2,000 this year.
"We have been very clear that at RBS and in other banks the bonus pool has got to be considerably lower than it was last year."
Britain's biggest banks are expected to reveal bonus plans next month alongside annual results. Bob Diamond, boss of Barclays, could receive a share award worth nearly £10m.
Antonio Horta-Osorio, chief executive of part-nationalised Lloyds Banking Group, announced he would forgo his annual bonus of up to £2.4m following his two-month leave of absence due to exhaustion. (from counting his money?)
It was unclear whether or not John Hourican, the boss of the RBS investment banking arm, would meet the performance criteria for him to receive shares worth up to £4m in April.
The row over Hester's bonus comes just days after the business secretary, Vince Cable, announced new proposals to crack down on excessive pay by giving shareholders a binding vote on executive pay deals. However, UK Financial Investments, which looks after the taxpayers' stakes in the bailed-out banks, is backing the award. Cable rejected calls from unions to give employees a greater say over executive pay.
David Hillman, spokesman for the Robin Hood Tax campaign, said: "Curbing Hester's bonus at state-owned RBS is a small step in the right direction but nowhere near enough. Having just heard our economy has shrunk again, it's beyond belief the government is letting other City fat cats off the hook."
The bonus is in the form of a so-called "share bank" and based on a share price of 26.75p – which was the RBS closing price on Wednesday. This is still well below the 50p at which the taxpayer bought its 82% stake in RBS.

The Recession & Bank Disaster a 10 year olds view

Well done Mark

Excellent vid.

Hope to see you at Easter or in the Summer