Rewarding failure

RBS’s losses for 2011 could be reduced by 1/3 by withholding bonus’ due to the financial straits it is in.

Bank       % public ownership       Net income 2011      Bonus 2011-12
RBS       83%   £(1969) million  £ 780 milion
Lloyds   40%      £(2714) million  £ 300 million

Note numbers in nice brackets () represent negative numbers, so that is LOSSES of 2 billion and 2.7 billion.

RBS

Stephen Hester = £963,000 bonus alongside his over £1 million salary, bonus is based on 25% appraisal rating.
Staff = 4,800 jobs lost;
Shareholders = 40% wiped off shares (80% nationalised using borrowed money at approximately 3% interest rate).

RBS reported a 1.4 billion pounds first-quarter loss compared with a loss of 116M£ for the same quarter last year  largely due to a  £2.5bn change in the value of the bank’s debt. It was also forced to compensate customers mis-sold payment protection insurance at a  cost of  £125m.

Lloyds

Lloyds bonus is lower because they are not do not have an investment banking operation. Losses are large due to cost of ‘restructuring’.

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