Treasury may block huge bonuses for bank chiefs.

[Oscar Namechange]

PRESCOTT CALLS FOR 'SIR FRED' TO BE STRIPPED OF HIS HONOUR

Treasury may block huge bonuses for bank bosses By Sean Poulter

Last updated at 7:24 AM on 26th January 2009

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Sir Fred Goodwin is unlikely to lose bonuses, despite devastating losses for RBS

Massive bank bonuses could be vetoed by the Treasury - but not before the men who broke Britain walk away with millions.

Banks that take British taxpayers' money will be required to ensure that future bonus packages are tied to long-term performance.

But these legally-binding controls cannot be applied retrospectively to bankers who lost billions, such as Sir Fred Goodwin of Royal Bank of Scotland and others at the Halifax and Northern Rock.

Yesterday, former deputy prime minister John Prescott waded into the row, suggesting Sir Fred should be stripped of his honour.

The Government's second bank bailout last week will effectively put tens of billions of pounds of public money at risk to insure loans made by crisis-hit banks.

A clause included in the deal states that the banks involved must accept 'a number of further conditions - including in relation to remuneration policy'.

Treasury insiders said this clause should be interpreted as a sign that lenders such as RBS and Lloyds Banking Group, which includes the Halifax, must link bonuses to their success in the long term.

However, this will not prevent thousands of executives, plus many investment bankers and advisers, from collecting huge bonuses that were already written into their contracts.

The losses at RBS and Halifax Bank of Scotland, which was rescued by Lloyds TSB, were partly responsible for bringing Britain's banking system to the brink of collapse.

Last week, RBS revealed it could lose up to £28billion, much of this linked to its purchase of the Dutch bank ABN Amro.

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The deal was the personal 'triumph' of Sir Fred Goodwin, who has walked away from the bank a multi-millionaire.

The 50-year-old stepped down as its head last November with an £8.4million pension and his £100,000-a-month salary guaranteed until the end of this month.

Between 2003 and 2007 he received £15.5million in basic pay and bonuses.

Mr Prescott suggested on BBC1's The Politics Show that Sir Fred Goodwin should hand back the knighthood

Mr Prescott suggested yesterday on BBC1's The Politics Show that he should hand back the knighthood he received in 2004, or have it taken away, adding: ' Certainly he doesn't warrant it, does he?

'If he got it for services to banking, I wouldn't have thought what he has done since then provides the justification.

'The bankers have failed us. We pro-economic circumstancesof low interest, low inflation, millions of people back in work.

'What do the bankers do? They override all the careful considerations. They go for greed. The bankers caused the damn problems and they should be paying the consequences for it.'

RBS chairman Sir Tom McKillop will also step down from his post a wealthy man

RBS chairman Sir Tom McKillop, who shared in the ABN Amro fiasco, will step down in April a wealthy man.

By contrast, as many as 30,000 RBS staff could lose their jobs with little or nothing in the next few years.

Last week, City Minister Lord Myners criticised bankers who earned fortunes on the back of arrogant and reckless policies.

'I have met more masters of the universe than I would like to - people who were grossly over-rewarded and did not recognise that. Some of that is pretty unpalatable,' he said.

'They are people who have no sense of the broader society around them.

'There is quite a lot of annoyance and much of that is justified. Let us be quite clear.

There has been mismanagement of our banks.'

Other bankers who earned a fortune as their businesses dived in the credit crunch include the ex-chief executive of the Halifax, Andy Hornby, and its chairman, Lord Dennis Stevenson.

Halifax, which is Britain's biggest mortgage provider, was reliant on massive borrowing to fund the loans that fuelled the house price bubble.

However, when the global credit crunch turned off the financial tap, the bank had to chose between oblivion and being taken over by Lloyds.

Mr Hornby, who was on a £1.9million salary package and had built up a £2.4million pension pot before being ousted, has been paid £60,000 a month as a consultant since leaving.

Thousands of staff will lose their jobs following the takeover by Lloyds, which is also likely to lead to the closure of hundreds of branches.

Northern Rock boss Adam Applegarth was among the first to fall on a gilded sword, having overseen a staggering increase in lending from £42billion in 2003 to £113billion in 2007.

The boom included loans of up to 125 per cent of a property's value while the bust has brought a surge in repossessions.

He reaped millions in bonuses and share sales - and left the collapsed bank with a payoff of £760,000 plus a £2.2million pension.

[Oscar Namechange]

Barclay's shares rise 73% and a possible enquirey into RBS, by police.

Police may launch probe into RBS £12billion rights issue | Mail Online

[Galbally]

Good, best news I have heard all week, its about time.

We need a bit of that here as well let me tell you. It may be populist, but so what, its still right; these guys just think they are untouchable, its time to disabuse some people of their notions. Its the only way people are going to regain any confidence in their being any sense of equity in our societies.

[Galbally]

JAB;1119148 wrote: The 'poor' ole ex-Merrill Lynch guy, John Thain (the same one that felt he deserved a $10M bonus but later backed off his claim) was ousted as second in command at Bank of America. Oh and he also agreed to pay back the $1.2 million that it took to re-decorate his office while at Merrill at a time when losses were mounting.

I agree though Scrat - I'm not holding my breath that any will get sent away to prison.


At least over there you actually occasionally do send these suckers to prison, we are even worse.

I read somewhere that the boss of Lehman sold his $13,000,000 florida mansion for $100 to his wife, the week the bank collapsed last september, oh you need to get him, get him good for all of us. :-6

[wildhorses]

Galbally;1119218 wrote: At least over there you actually occasionally do send these suckers to prison, we are even worse.

I read somewhere that the boss of Lehman sold his $13,000,000 florida mansion for $100 to his wife, the week the bank collapsed last september, oh you need to get him, get him good for all of us. :-6


I would like to see this guy fried under the magnifying glass of justice.

[Clodhopper]

I would like to see this guy fried under the magnifying glass of justice.


I've a few candidates too. But what law do we clobber them under. It isn't against the law to be an arrogant, complacent, selfish backstabbing bullshitter with the morals of a whore.

Generally I'm against lynching, but I have to admit I'd feel a certain satisfaction if I heard a few turned up dangling from trees.

[Oscar Namechange]

Scrat;1119431 wrote: What it comes down too is breach of contract. These morons were not supposed to make the decisions they did, they were not supposed to destroy what they were given. They were the head caretakers of the garden and the garden died on their watch. We need to make examples out of a lot of people not just the CEOs, the staffs of these banks and companies and the boards.

Light a fire under these bastards. They deserve nothing.


Great analogy. The garden has certainly died.

I remember a few months ago Gordon Brown threatening the banks chiefs with legal action. One was they were refusing to pass on the cuts in interest rates.

It baffles me how these bastards can know and see what is happening to the country, yet continue to destroy us.

If the police have been brought in, I can see some-one being used as the example because that's what the country has been baying for. My money is on Sir Fred.

[Oscar Namechange]

Scrat;1119663 wrote: Last fall Washington Mutual went belly up here in the US. The CEO that did it walked out with all kinds of perks and a cool 20 million.

Think of that. 20 million.

Where in the world do you want to live? Italy? Spain? Why not the Bahamas?

That individual signed a contract to set himself up for life regardless of what happened to the bank. That really provides a lot of incentive for good performance doesn't it?

Hell it invites corruption, hook your friends up and run for it.

Bastard should be hung. He leveraged WAMU so deep into all these weird hedge funds and god knows what that the bank was a basket case. The branch in my town here is still closed.


The hedge funders are getting a lot of the blame here. Where there is money, there is power and corruption even at the cost of their customers. Britain as usual will make a scape-goat of one hoping it will teach all a lesson.

I'd like to see nothing less than them stripped of their assets.

[Oscar Namechange]

Scrat;1119681 wrote: Remember that melamine scare in China? Jimbo and me both posted articles on it but the CEOs responsible for it are getting the death penalty.

You have to make screwing over your customer not worth it. You have to make it a crime with harsh penalties attached. If you don't do that then you'll get nowhere.


Exactly.

The part i can't get my head around is that the bank chiefs must know what they are doing to ordinary people and the country, yet carry on. Is that embezzlement? I'm not sure.

Strip them of their assets and re-invest them back into the bank and the customers pockets. I have been lucky as my own bank does not seem to have been mentioned at all during the crisis. Maybe because it's owned by a Spanish outfit.