A think tank's released the figures showing a striking pay gap between high-ranking CEOs and average employees. RT's Anastasia Churkina takes up the story
Showing posts with label fat cats. Show all posts
Showing posts with label fat cats. Show all posts
January 06, 2017
UK Fat Cats Already Made More Money in 3 Days Than Britons Will Make All Year
A think tank's released the figures showing a striking pay gap between high-ranking CEOs and average employees. RT's Anastasia Churkina takes up the story
May 31, 2012
France's new socialist government has announced an immediate, dramatic clampdown on fat-cat pay, promising to cap the salaries of chief executives at state-owned companies which could see top pay-packages slashed or halved.
The president François Hollande vowed during the election campaign that in majority state-owned companies, the highest salary must not be 20 times more than the pay of the lowliest worker. The squeeze on state fat cats, expected to be enacted by decree next month, is part of the new government's quest for France to set a moral example in a crisis-hitEurope where top earners' stratospheric pay packages and benefits has exasperated workers and voters. The measure will sit alongside Hollande's promised new top tax rate of 75% on income over 1 million euros, which is extremely popular among the French public, and which he has described as an act of "patriotism" and "morality". Socialists brushed aside criticisms from the right that state pay-caps could make it difficult to recruit from private sector. » | Angelique Chrisafis in Paris | Wednesday, May 30, 2012
April 27, 2012
THE HUFFINGTON POST: * Investors angry at payouts, want more of the spoils * More than a quarter of Barclays investors could rebel * Barclays promises higher dividends, shares rise * Credit Suisse boss defends pay strategy
LONDON/ZURICH, April 27 (Reuters) - More than a quarter of Barclays shareholders look set to vote against the British bank's controversial pay plan for bosses and Credit Suisse is also facing a backlash as investors seek a greater share of profits.
Stormy annual shareholder meetings at both banks got underway on Friday with many attendees complaining executives are getting too big a slice of bank income at their expense.
Anger is also rife in the population at large that an industry whose excesses sparked the global economic downturn is still awarding its leaders multi-million dollar pay outs.
"People feel that bankers and the banking sector have lost touch with what's real," said Jim Arnott, 56, an executive coach in London who counts bankers among his clients.
"The majority of people feel it's just a culture of greed." » | Matt Scuffham and Katharina Bart | Reuters | Friday, April 27, 2012
December 06, 2011
THE DAILY TELEGRAPH: A leading shareholder group has written to all UK banks demanding that they cut individual pay-outs and overhaul their remuneration structures.
In the latest attempted crackdown on excessive pay, the Association of British Insurers (ABI) has told banks to award smaller bonuses to investment bankers without resorting to increasing base pay to make up for it.
The ABI said that now is the time to curb total pay because bankers are unlikely to quit for a competitor, with very few banks hiring and most cutting jobs.
The letter is the latest development in the intensifying row over "out-of-control" executive pay and comes as the Bank of England is considering changes to the way bankers' bonuses are measured, making it far harder to justify multi-million pound awards.
The letter from the ABI, sent to UK listed banks on Monday, said: "Our members are concerned about the level of returns that shareholders receive compared to the returns given to employees. Members believe that in recent years this balance has been inequitable, with too much value being delivered to employees in contrast to the dividends paid to shareholders.
"The reduction in employee pay-out ratios needs to be achieved by reducing individual remuneration pay-outs to highly paid employees, including executive directors, and not by just reducing employee numbers." Read on and comment » | Louisa Peacock, Jobs editor | Monday, December 05, 2011
November 22, 2011
A year-long inquiry by the High Pay Commission finds the pay of some top executives has soared by more than 4,000 per cent in the last 30 years, undermining productivity and ''damaging'' trust in British business.
The report criticised ''stratospheric'' pay increases which have seen wealth flow upwards to the top 0.1 per cent of people in the UK.
Average wages in the UK today are a ''modest'' £25,900 - up from £6,474 in 1980 - a three-fold increase.
The commission called for a number of reforms, including a ''radical simplification'' of executive pay, putting employees on remuneration committees, publishing the top 10 executive pay packages more widely, forcing companies to publish a pay ratio between the highest paid executive and the company median, and making firms reveal the total pay figure earned by executives.
The commission also said a new national body to monitor high pay should be established.
The report, Cheques With Balances: Why Tackling High Pay Is In The National Interest, showed that decisions to award huge pay packages are set by a ''closed shop'', shrouded in highly complex detail, effectively hidden from shareholders, staff and the public.
''Stratospheric increases in pay are damaging the UK economy - distorting markets, draining talent from key sectors and rewarding failure. Read on and comment » | Tuesday, November 22, 2011
My comment:
This is NOT capitalism! Capitalism rewards risk-takers. What risks do these executives take? They are in secure positions, and are rewarded with monopoly-figure salaries and bonuses even if they achieve little or nothing. This is unfair, corrosive, and a disincentive for others to take any risks or make any effort to better themselves. Faced with this scenario, why should anyone bother to make the effort to pull himself up by the bootstraps? This is a total disincentive to effort. And that's a very destructive situation for a capitalist economy to be in.
Further, it cannot be overemphasised that societies with such inequalities of wealth are a breeding ground for socialism, and even for communism. If you think that socialist/communist revolutions cannot happen in this day and age, and in this country, think again! Now do we really want to continue with this breeding ground for such a scenario? I think not. It is therefore high time to turn the screws on these obscene, vulgar fat cats. Tax them, until the pips squeak if necessary. The alternative scenario might well not be a pretty sight. – © Mark
This comment also appears here.
November 14, 2011
As the Business Secretary said he shares the anger of the anti-capitalist protesters at St Paul's in London, another group was setting up camp in Exeter.
Cable said the demonstrators were right to point out that those who caused the financial crisis have not paid the price while ordinary people suffer.
He set up a review of spiralling executive pay in September and yesterday he said he was prepared to back up the plans with new laws.
The Business Department is working on proposals to give shareholders more powers to limit sky-high payouts to bosses who have failed to boost their businesses.
Mr Cable stepped in after it emerged that the average salary for a chief executive of one of Britain’s 100 biggest firms has quadrupled from £1million to £4.2million over the past 12 years – without a corresponding uplift in share prices.
He said: ‘I think that’s what causes a lot of public anger and indignation and you know we’ve seen some of that spilling over into protests in recent weeks.
‘I have sympathy with the emotions that lie behind it. Some of their recommendations aren’t terribly helpful, but that’s not the point.
‘I think it does reflect a feeling that a small number of people have done extraordinarily well in the crisis, often undeservedly, and large numbers of other people who have played no part in causing the crisis have been hurt by it.’
The Government’s consultation exercise is designed to ensure greater transparency on management pay and perks and ensure a closer link between salaries and performance.
Asked if he would change the law to force companies to adhere to new rules that may result from it, Mr Cable said: ‘It depends on the consultation. If it does require legislation of course we’ll introduce it.’ » | Richard Hartley-Parkinson and Tim Shipman | Monday, November 14, 2011
November 12, 2011
The Prime Minister said the Government could and would ensure that the pot for pay and perks is much smaller.
RBS – which is 83 per cent owned by the taxpayer – has suffered a collapse in profits over the past three months.
Its revenues plunged to £112million between July and September – compared with £589million over the same quarter last year.
Yet this dramatic fall is not reflected in the enormous pay pool from which its salaries and bonuses are funded.
There is just under £2billion in the pool – only marginally lower than the £2.14billion it contained last year.
Insiders expect about £500million of it to be paid out in bonuses this year – with more than £1million going to some investment bankers.
There is ongoing public fury at the way bankers have continued to rake in huge salaries and end-of-year bonuses, while the taxpayers who bailed out their banks three years ago are suffering pay freezes and public spending cuts.
Mr Cameron said that the Government would have a ‘very big influence’ on the level of bonuses paid out by RBS this year. Read on and comment » | Tim Shipman | Friday, November 11, 2011
November 06, 2011
THE INDEPENDENT ON SUNDAY: As politicians shift ground on high earners, City workers admit public sector gets raw deal
British bankers have admitted that they are paid too much, a report into moral standards in the City of London will reveal tomorrow.
A survey of 500 workers in City financial institutions, carried out for the Christian think-tank St Paul's Institute, found that "a substantial number" believed they were overpaid compared with other professions – particularly frontline workers including teachers and, most of all, nurses.
The results will fuel continuing bitterness towards the industry over its culpability for the financial crisis and its apparent failure to rein in huge salaries and bonuses . Last night The Sunday Times reported the publicly owned Royal Bank of Scotland is planning to pay its investment bankers about £500m in bonuses.
The Archbishop of York, Dr John Sentamu, yesterday joined the attack on bankers' pay, claiming excesses in the financial sector had helped to create huge inequalities in wealth, "demonstrating how scandalously unfair our society is". » | MATT THOMAS, BRIAN BRADY | Sunday, November 06, 2011
November 05, 2011
Archbishop Sentamu, the second most important figure in the Church of England, said that excesses in the financial sector have helped to create huge inequalities in wealth, "demonstrating how scandalously unfair our society is".
Writing in the Yorkshire Post, Dr Sentamu called for a change in public attitudes towards excessive personal wealth as profound and rapid as moves against racism, homophobia and sex discrimination in recent decades.
He said: "If they [FTSE 100 chief executives] have a responsibility to their staff, it is hard to imagine a more powerful way of telling someone that they are of little value than to pay them one-third of one per cent of your salary.
"Top pay has been found to bear little or no relation to company performance, but even if it did, isn't the performance of a company dependent on the work and well-being of all its staff?
"Among the ill-effects of very large income differences between rich and poor are that they weaken community life and make societies less cohesive." » | Saturday, November 05, 2011
YORKSHIRE POST: Sentamu hits out at greed culture of fat cats: THE Archbishop of York has urged the Government to introduce a radical overhaul of the tax system and called for greed to be made as socially unacceptable as racism and homophobia. ¶ Dr John Sentamu claimed many of the wealthiest in society are avoiding paying their dues in a stinging attack on the growing divide between Britain’s rich and poor. » | Saturday, November 05, 2011
YORKSHIRE POST: WITH renewed public outrage at the excesses of the financial sector and the huge inequalities in wealth it has helped to generate, we are being confronted daily with new evidence of extremes of wealth and poverty, demonstrating how scandalously unfair our society is.
But how is this to be addressed? This is the urgent task for us all. The news that chief executives (CEOs) of the FTSE 100 companies last year received average pay increases of almost 50 per cent adds urgency to our cause.
Typically, these CEOs receive 300 times as much as the least well paid British employees in their companies. If they have a responsibility to their staff, it is hard to imagine a more powerful way of telling some people that they are of little value than to pay them one-third of one per cent of your own salary.
Top pay has been found to bear little or no relation to company performance, but even if it did, isn’t the performance of a company dependent on the work and well-being of all its staff?
Among the ill effects of very large income differences between rich and poor are that they weaken community life and make societies less cohesive.
If the concept of the Big Society is to become a reality, so that people come to know and take more care of each other, income differences must surely be reduced. No one wants a “dog eat dog” society in which people feel obliged simply to fend for themselves.
But over the last few decades, the gains from economic growth have gone disproportionately to those who already have most. In contrast, forecasts suggest that child poverty will increase. The danger is that rather than increasing equality of opportunity, social mobility will slow down and people will become more divided by class and status. » | Dr. John Sentamu | Saturday, November 05, 2011
October 28, 2011
MAIL ONLINE: • City firms to pay out £4.2billion this year in bonuses • Shell making £4.4billion in three months as oil prices soar • Critics say a minority continue to be rewarded for failure
Fat cat bosses at Britain’s top 100 companies have awarded themselves pay rises of 49 per cent in the last year.
As households suffer the biggest squeeze on incomes since the 1920s, a study showed executives can now expect to earn £2.7million on average.
That is 113 times the national average of £24,000 for a worker in the private sector, where salaries have risen just 3 per cent in the last year.
The extravagant pay packages were enjoyed by every member of the boardroom, from the chief executive down to far less high-profile roles.
In fact, chief executives and finance directors – usually considered the number two at a firm – did not do as well as more junior staff.
The average chief executive saw their total payout increase by 43.5 per cent to £3,855,172, while the rise for a finance director was up 34.1 per cent to £2,001,515.
Other directors enjoyed the largest rise, as they took home 66.5 per cent more in pay and perks, to the tune of £2,260,033 on average.
The bonus element of the average executive pay packet increased by 23 per cent, from £737,624 in 2010 to £906,044.
Former Liberal Democrat Treasury spokesman Lord Oakeshott said: ‘These greedy bosses sit on each others’ remuneration committees and wave through each others’ offensive pay rises.
An average rise of 49 per cent includes vast rewards for failure while employees, shareholders and customers suffer. Read on and comment » | Rob Davies | Friday, October 28, 2011
September 12, 2011
THE DAILY TELEGRAPH: The bosses of Britain's biggest companies have been awarded salary rises of as much as 7.5pc as well as record bonuses in the first bumper pay round since the financial crisis.
Research by Deloitte has found that the pay freeze imposed over the past two years has been lifted and remuneration has climbed.
Directors of FTSE 100 companies have been awarded an average pay rise of 4pc in 2011, with many taking much more.
FTSE 250 directors have also been given pay increases but at slower rate, of up to 5pc and at an average 3pc.
Traditionally bonuses have been paid out at between 70pc and 80pc of the maximum possible amount. But this year pay outs have increased to as much as 87pc for FTSE 100 companies and 86pc for FTSE 250 companies. Read on and comment » | Louise Armitstead | Monday, September 12, 2011
THE DAILY TELEGRAPH: Living standards to suffer as effects of recession bites: Families will suffer financially from the recession and banking meltdown for up to a decade, an economic forecaster warns today. » | Robert Winnett, Deputy Political Editor | Monday, September 12, 2011
June 01, 2010
THE TELEGRAPH: Public sector rich list: salaries of civil servants who earn more than PM: The pay of more than 170 senior civil servants who earn more than the Prime Minister have been disclosed as the starting point of a radical move towards more open government. >>> Robert Winnett, Deputy Political Editor | Monday, May 31, 2010
Fat Cat Civil Servants >>>
March 26, 2010
THE TELEGRAPH: A French millionaire [billionaire?] has become the first person in the country to go on trial for being paid too much, in a ground-breaking move against "corporate greed".
Antoine Zacharias is facing criminal charges despite the £90 million pay and pension deal being approved by his company’s directors.
He is accused of misusing funds by accepting the money to run Vinci, the world’s biggest construction company.
The sum was set by a remuneration committee chaired by Quentin Davies, Britain’s junior Defence Minister.
Mr Zacharias, 71, is the first French industry captain to face criminal charges over earnings and faces up to five years in prison and a fine of £336,000.
French bosses are anxiously awaiting the outcome of the two-day trial at the court in Nanterre outside Paris, as a guilty verdict could lead to a wave of prosecutions in France over executive pay.
France is notoriously mistrustful of its patrons, and the country was hit by a wave of “boss-nappings” last year in the wake of the financial crisis.
Under French law, company bosses can be prosecuted for misusing funds. However, this is the first time a case has been brought against someone who appeared to have acted within company rules on pay.
Hailed as France’s boss of the decade by the Harvard Business Review, Mr Zacharias transformed Vinci into a construction powerhouse, raising profits by more than 300 per cent and turnover by 81 per cent in six years.
But in 2006 he was ousted by his number two, and successor, who accused him of corporate greed. >>> Henry Samuel in Paris | Thursday, March 25, 2010
*We, the British, should follow suit, as should the Americans. In fact, this should happen wherever corporate greed is a problem. What about jailing and punishing severely those fat cat, greedy bankers? Five to ten years in the slammer would do them a world of good. It would sober them up. They would become examples for all the others just waiting to milk (shouldn’t that be cream?) the system. You’d soon find that corporate greed would become a thing of the past if these ‘can’t-get-enough-types’ were put through their paces in clink. Let the show begin! – © Mark
February 25, 2010
TIMES ONLINE: Politicians rounded today on Royal Bank of Scotland (RBS), the state-owned lender, over its decision to pay up to £1.7 billion in bonuses to bankers despite making a £3.6 billion loss during 2009.
The bank announced today that it would pay investments bankers from a £1.3 billion bonus pool while other staff would share in a £400 million reward.
George Osborne, the Shadow Chancellor, said that bankers’ pay had reached “ridiculous levels”, adding: “We have just got to look at the whole banking sector and try to bring this pay down.”
RBS’s loss for the 12 months to December 31 is less than the £5 billion expected and far below the £24.3 billion loss that RBS reported for 2008, a record for any British company.
But Vince Cable, the Liberal Democrat Treasury spokesman, said: “RBS rewarding individual bankers is like a football team paying their striker for scoring when they’ve just been relegated."
RBS is 84 per cent owned by the British taxpayer after receiving billions of pounds of rescue funds from the state during the recession to save it from collapse.
The UKFI, the body set up by the Government to manage the state’s investment in British banks, yesterday granted RBS permission to pay the bonuses. >>> Francesca Steele | Thursday, February 25, 2010
January 23, 2010
TIMES ONLINE: Banking industry lobbyists are preparing to do battle, buoyed by a landmark US Supreme Court ruling striking down limits on corporations’ political spending, against the ambitious and agressive plans laid on Thursday by President Obama.
Despite the pointed attacks made by the President on the “army of industry lobbyists from Wall Street”, the Financial Services Roundtable, a body which represents 100 of the largest financial firms, said that Mr Obama’s proposal would do little to protect consumers.
“The proposal will restrict lending, increase risk, decrease stability in the system, and limit our ability to help create jobs,” said Steve Bartlett, chief executive of the roundtable.
Individual bankers by and large kept quiet, preferring to weigh up the best response in private. As they did so, Mr Obama flew to the struggling rust-belt state of Ohio in hope that the attack would re-energise his popularity in middle America.
In Washington the attack on bankers was seen as a “policy pivot” designed to accommodate voters’ populist rage after the Democrats’ loss of Edward Kennedy’s Senate seat in Massachusetts. “I’ll never stop fighting for you. I’ll take my lumps, too,” Mr Obama told an audience in Elyria, at the start of a day of campaign-style events aimed at reinvigorating the Democrats before the November mid-term elections.
The President has become increasingly strident about what he calls the “fat cats” in the big banks as the American public has reacted with revulsion to big bonuses being handed out in Wall Street. Mr Obama’s political capital is dwindling, however, after the Democrats’ loss on Tuesday of the 60-seat “super-majority” that enables them to overcome a Republican filibuster in the Senate.
Yesterday, the Senate was forced to postpone the confirmation of Ben Bernanke for a new term as Federal Reserve chairman after two more Democratic senators said that they would join a revolt against him. >>> James Bone in New York | Saturday, January 23, 2010
August 04, 2009
THE GUARDIAN: Barclays and HSBC made a passionate defence of the City's bonus culture yamid [sic] a growing public backlash about the return to a big pay bonanza barely a year after the government bailed out the financial system.
As criticism of bonuses crossed the traditional political divide, the banks compared their high-flyers to footballers and Hollywood stars to try to explain the need for the hundreds of thousands of pounds individuals are expected to receive this year. Neither bank gave figures about potential bonuses for investment banking staff, but a jump in profits in both operations led to speculation that huge pay deals will be awarded.
Profits at Barclays Capital, the investment banking arm of the high street bank, doubled to £1bn while at HSBC's investment bank the profits rose 125% to $6.3bn. Each bank reported overall profits of nearly £3bn despite a combined £13bn of bad debts caused by rising unemployment, making it more difficult for households and companies to pay back loans. Bank shares jumped sharply, pushing the FTSE 100 to its highest level this year.
John Varley, chief executive of Barclays, turned to footballers to explain bankers' pay while Stuart Gulliver, who runs the investment bank at HSBC, used Hollywood stars. Varley said: "The football analogy certainly goes some way I think [to explain bonuses] ... There is simply no higher priority that to ensure we field the very best people. That in a sense is exactly the same as a football manager if they are going to win. Our obligation is to ensure we pay appropriately."
Gulliver likened the situation to a Hollywood studio that not only paid stars for pulling in profits, but also many of the extras. "If a foreign exchange trader makes a deal then they know two days later how much they made. If it's a £5m profit, that is something we can count, we can see it, its real. And they are part of a successful team," he said. >>> Jill Treanor and Phillip Inman | Monday, August 03, 2009
March 26, 2009
MAIL Online: Security will be stepped up around fat-cat bankers after the home of disgraced former RBS boss Sir Fred Goodwin was targeted by vandals.
A statement claiming to be from the group responsible for damage at his £3million mansion warned of further attacks, saying: 'This is just the beginning.'
The threat sparked fears of a terror campaign against those blamed for the collapse in the financial system.
The concern is that anti-capitalist groups will copy the tactics of animal rights militants by directly targeting individuals they hold responsible for the credit crunch.
Tensions are already high, with anarchists reported to be plotting mayhem at next week's G20 summit in London.
Their intention is to paralyse the Square Mile by staging sit-in protests and storming financial institutions, with the Bank of England and RBS among the top targets.
Effigies of bankers will be hung from lampposts. Security adviser Dai Davies, a former head of Scotland Yard's Royalty Protection squad, said: 'Risk assessments will have to be carried out by the police on individuals who are concerned about their safety. If there is cause for concern then appropriate advice will be given and pre put in place.
'The developments at Sir Fred Goodwin's home will almost certainly make some other high-profile bankers want to review their own private security arrangements.' >>> By Stephen Wright | Thursday, March 26, 2009
THE GUARDIAN: Banks Braced for City Riots During G20 Summit after Attack on Sir Fred Goodwin's Home
Financial sector staff are warned to keep low profile / Former RBS boss 'shaken' after early morning raid
The last time bankers faced angry demonstrations, some responded by pouring champagne or photocopied £50 notes from windows, but it is unlikely that protesters targeting the City next week during the G20 summit will be met by similar shows of bravado.
Many staff are being advised to dress down next Wednesday and Thursday to avoid being marked out as City workers - if they cannot avoid the protests entirely by working from home. Others have been advised to avoid leaving the office to attend meetings.
Concern about possible violence heightened when the home of former Royal Bank of Scotland chairman Sir Fred Goodwin was vandalised early yesterday morning, leaving three windows shattered and the rear window of his black Mercedes smashed. An anonymous email was sent to media organisations shortly after the attack threatening further action against "criminal" bank bosses.
The former RBS boss, who had not been at home and is at the centre of a row over the size of his pension from the taxpayer-owned bank, was said to have been "shaken" by the incident.
Many in the City believe aggressive media coverage of the financial crisis has declared a virtual open season on financial sector workers.
The financial advisory group Bluefin, which employs 500 staff in London, has set up a phone line offering staff updates next week. Staff have been told not to go to its office in Mark Lane in the City unless absolutely necessary. "As a responsible employer, the safety and wellbeing of our staff is always considered of paramount importance," a spokesman said.
A UBS spokesman said the bank would continue to assess the level of threat as it got nearer the time. "We are telling people to be cautious. If you have client meetings, do you need to have them here? Some of the banks have said dress down or try not to move around. It is all pretty obvious. "It is quite co-ordinated among the banks. We all talk to each other. I think it is different if you are in a landmark building, some are more obvious than others."
Another banker complained that we "are in an era of the demonisation of financial services". >>> David Teather | Thursday, March 26, 2009
February 15, 2009
The Government wrecked both our private and our public finances and if Gordon Brown doesn't get a better grip of the banking industry, the IMF will have to do it for him, says Michael Fallon.
‘We are profoundly and, I think I can say, unreservedly, sorry at the turn of events” was how the former chairman of HBOS put it. “I think I can say, unreservedly”? “The turn of events”? Only somebody as deeply immersed in the British establishment as Lord Stevenson of Coddenham could get away with destroying a great British bank, taking £17 billion of taxpayers’ money, and then offering up the kind of shaded apology more appropriate for somebody caught out by a sudden cold snap.
This won’t do, and the parade of hapless bankers in front of the Treasury Committee last week did not give us the answers we need to the crisis in British banking. Instead, we were shown a sorry picture of a sales-driven, deals-driven, bonus-driven culture wholly alien from the banks our fathers knew. >>> By Michael Fallon | Saturday, February 14, 2009
THE (SUNDAY) TELEGRAPH: Lloyds Plan to Pay £120 Million in Bonuses to Staff Threatens New 'Fat Cat' Row
Lloyds banking group has drawn up plans to pay about £120 million in bonuses to staff even as it teeters on the brink of majority state ownership, The Sunday Telegraph has learned.
Sources close to Lloyds said the bank had drafted the bonus proposals and was "in consultation" about them with UK Financial Investments (UKFI), the Treasury body that owns a 43 per cent stake in the bank.
The proposed payouts would be distributed among thousands of workers in Lloyds' retail and commercial banking businesses, who received about £150 million in bonus payments last year.
They are likely to inflame the growing row over City bonuses which was stoked last week by The Sunday Telegraph's disclosure that Royal Bank of Scotland, almost 70 per cent of which is owned by the taxpayer, was looking to pay staff as much as £1 billion in bonuses this year.
The disclosure comes as the Government and Lloyds attempt to find a way to pump billions more of taxpayers' money into the troubled bank without the Government being forced to take a majority stake. >>> By Mark Kleinman, Patrick Hennessy and Edmund Conway in Rome | Saturday, February 14, 2009
The Dawning of a New Dark Age (Paperback & Hardback) – Free delivery >>>
October 10, 2008
THE GUARDIAN: 4,000 workers earned £1m-plus payouts last year / Staff will go abroad if pay is restricted, say bosses
The government may have no concrete plans about how it will rein in the pay of bank bosses - and curbing the cash paid out to those below the most senior levels will be even more challenging.
In all publicly quoted companies, such as Lloyds TSB and Barclays, directors' pay has to be spelled out in an annual report on which shareholders can vote, and in most businesses the best-paid member of staff is the chief executive.
But bank bosses and board directors can be surrounded by staff making far more money. Even relatively junior traders, well down the pecking order but still taking big risks, expect six-figure bonus payouts.
At Barclays, chief executive John Varley earned £3m last year. But that package was eclipsed by that of Bob Diamond, who runs the City arm of the bank. His basic pay for 2007 was £250,000, but his total pay including bonuses and shares was £21m, and in January he got a cheque from another incentive scheme for £14.8m. Diamond's pay is only known because he recently joined the board, but there are others earning huge rewards who stay hidden - such as Roger Jenkins, who runs Barclays' Middle East operations and is said to have earned at least £40m last year.
The pay packets the government now wants to restrict are far from rare. An estimated 4,000 City workers last year got bonuses of £1m or more and total bonuses were more than double that as thousands more banked bumper payouts.
The salary structures in investment banks look less like those of other businesses and more like those of Premier League football clubs, where most of the cash coming in goes straight into players' pockets, with the biggest stars getting the largest slice. Around 50% of bank revenues are paid out in salaries and bonuses. If Tesco did the same, its 430,000 staff would each earn more than £100,000.
But it is not just top talent that is paid top dollar. Graduate trainees have been lured to the City by starting salaries of £40,000-£60,000 and promises of bonuses that will double that in their second year. Earlier this year the Bank of England governor Mervyn King said City pay posed two threats: it might encourage bankers to take unacceptable risks - and it was diverting too many talented graduates from industry.
A managing director in a mergers and acquisitions department of an investment bank might earn a basic salary of £150,000, but would expect a bonus of at least £1m. Research by a recruitment firm this year showed the average pay package of a City managing director in the credit and debt markets - and the big banks give that title to hundreds of staff - was more than £680,000. Twelve months earlier, average pay was £290,000 higher. Huge Bonuses for City High Flyers Will Be Hard to Rein In >>> Julia Finch, City editor | October 10, 2008
MAIL Online:
Bank Fatcats Will STILL Receive Massive Bonuses - Despite Brown's Pledge to Slash Them >>> | October 10, 2008
The Dawning of a New Dark Age (Paperback & Hardback) / Free delivery >>>
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