Economy

RBS mockery of remuneration by share issue

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Economy
Written by Roberta Murray   
Tuesday, 02 February 2010

 Morning Business News, 02 Feb 2010: RBS, Goldman Sachs, Conservative Party, Ryanair and Marks and Spencer Group.

 

RBS (LON:RBS) leadership are to go forward with plans that will allow top performers to collect large cash bonuses.

RBS wrote to investors yesterday detailing the bank’s complicated pay deal under which bankers will receive their bonuses entirely in shares – but are able to convert a large portion into cash within just 12 weeks, the Telegraph reports.

Remuneration by share issue has traditionally been used as a mechanism to coax long term commitments out of company staff as the remuneration the employee can expect is linked to their, and the companies long term performance.

It has been forwarded as possible answer to one of the perceived ingredients of the banking crisis - bank employees and traders taking unnecessary risks for short term gains.

Allowing employees to redeem cash after 12 weeks is a mockery of such a system, indicating RBS is rather using the share offer as a smokescreen aimed at quelling the political and public backlash about bank pay.

The backlash against part government owned institutions RBS and Lloyds Banking Group has been particularly keen.

Goldman Sachs


Goldman Sachs (NYSE:GS) yesterday denied claims reported by The Times that Lloyd Blankfein, its chief executive, could be paid as much as $100 million for 2009.

The investment bank said that while the board had not made final decisions on executive pay, it “beggared belief” that directors would award Mr Blankfein “anything close” to $100m, the Times reports.

Conservatives hire Blair economists


The Conservative Party has recruited Lord Stern, the economist hired by Tony Blair to report on the impact of global warming, to help create Britain's first environmentally-friendly investment bank.

The influential author of the Stern Review will help create the Conservative vision of a bank designed to channel public and private money into funding green business plans and technologies. Bob Wigley, the chairman of Yell Group and former boss of Merrill Lynch in Europe, is also joining the working group for the bank, the Telegraph reports.

Ryanair


Ryanair has admitted that it cut fares to record lows in the run-up to Christmas to keep passengers flying and has conceded that its glory days of high growth have ended. Latest figures reveal that, in its pre-new year trading quarter, Ryanair passengers refused to pay on average more than €30 a ticket and cut baggage payments and in-flight spending.

The 12% fall in average fares was exacerbated by a slowdown in other spending by passengers, down 20%per head to €7.46, which was “primarily due to lower excess baggage revenues,” the airline said, the Times reports.

Marks & Spencer Group


Marks & Spencer Group (LON:MKS) has extended a £15m welcome to Marc Bolland, its new chief executive.

Bolland was finally released by Wm Morrison, his former employer, allowing M&S to issue him a start date and detail a bumper reward package to compensate the Dutchman for Morrisons shares that were due to vest as part of his incentive plan.

On top of a £975,000 salary, Mr Bolland will earn annual bonuses and exceptional awards of up to £6.3m, the Times reports.



 

 
 
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