The big gamblers

Despite the turmoil in the markets, bank failures and write-offs amounting to £60.5 billion City bonuses will top £6 billion this year.

Dozens of bankers at Goldman Sachs, for example, were awarded bonuses of at least £5m each at Christmas, with one lucky trader pocketing more than £10m in cash and shares. The average bonus at Goldman Sachs last year, one of the more extravagant payers, was £300,000. Staff are thought to be dreading the possibility that the average this year will be a mere £200,000 – And , of course , that is all on top of salaries and other emoluments.
Professor Stigliz said "Even if they lose their jobs, they walk away with large sums..."

Professor Stiglitz, a former chairman of the President's Council of Economic Advisers, under Bill Clinton explained ."...When things turned out well, they walked away with huge bonuses. When things turn out badly – as now – they do not share in the losses...The system was designed to encourage risk taking – but it encouraged excessive risk taking. In effect, it paid them to gamble...It is one thing to gamble with one's own money – but these bankers were gambling with other people's money – and with the government backstopping any losses. This is unconscionable."

Privatise Profits - Socialise Losses

BANK OF England governor Mervyn King used his now-famous meeting with the chief executives of the "big five" UK banks last Thursday to admonish them for increasing shareholder dividends.

On February 27, HBOS hiked its dividend by 18% to 48.9p meaning the bank offers a yield of 6.9%. It also lowered the targets under which directors would receive payouts on its executive incentive schemes. Previously directors only received bonuses under the scheme should the bank's shares outperform a basket of UK banks by 3%. Under the new rules, HBOS only needs to be 1.5% above rivals to trigger pay-outs.

Colin McLean, chief executive of SVM Asset Management said: "It just seems wrong that bankers are looking for support and essentially public money at a time when both dividends and executive pay are not only high but have also just been raised."

As we previously reported annual reports from RBS and HBOS show that Sir Fred Goodwin's remuneration totalled £4.19 million in 2007. Hornby's package climbed 22.5% to £1.93 million.

A fine performance - a rich reward

Tim Bowdler, chief executive of Johnston Press, saw his emoluments surge 36%, to more than £1m, last year despite a fall in profits as the local newspaper group grappled with the changes affecting the industry. The annual report for Edinburgh-headquartered Johnston Press shows Bowdler was the biggest winner in an increase in boardroom pay in 2007, when his earnings jumped from £800,000 to £1,088,000.The rise was largely due to a dramatic increase in the amounts that Bowdler received under performance-related bonuses, from £236,000 to £516,000. Bowdler's base salary rose by 3% to £556,000. Bowdler was also awarded 125,200 shares under a performance share scheme .He is in line to receive 242,911 shares under the PSP if the conditions are met. At yesterday's closing price of 128.5p these would be worth £312,140.

Performance related bonus ? A fall in profits ? Johnston Press reported a 6.3% decline in pre-tax profits .

BP Bonus

Been a while since Socialist Courier directed atention to the rumuneration that the capitalist class receives .

BP chief executive makes do with bonus of £1.26 million .

The Herald has revealed that Hayward, who became chief executive in May 2007, was awarded a bonus of £1.26m for 2007 which does not include his base salary of £877,000 . Lord Browne of Madingley, the former chief executive of BP, earned more than £3 million before he resigned last year.

A reward for success ? The company last month reported that 2007 net profit fell 5.5% to $20.8bn, despite a 6.2% rise in revenue to $291.4bn and lay-offs of 5000 workers . In contrast, two of BP's main competitors reported a surge in earnings. Royal Dutch Shell, Europe's largest oil company, reported a 23% rise in full-year earnings to a record $31.3bn, while Exxon Mobil posted the largest annual profit yet by a US company with net earnings of $40.6bn.

BP's top five directors, including Hayward, missed out on share awards worth a potential £10.7m because of the company's poor performance. The five were granted no shares at all from a possible 2.2 million under the group's 2005-2007 share incentive scheme - even so i am sure a bonus of a million and a quarter pounds for failure would not go amiss to readers of this blog.

Jake Molloy, general secretary of the Offshore Industry Liaison Committee, the union for offshore rig workers, said: “To make these redundancies and cutbacks and to award themselves payments of this nature is hypocrisy beyond belief. It's sickening.”

bankers

So some of the banks took a beating with the sub-prime mortgage crisis but it didn't stop some bank executives from taking their slice of their cake .

Lynn Peacock, chief executive the Clydesdale bank pay almost doubled to £2.1m. , compared with £1.1m in the preceding year. She also became entitled to an undisclosed number of shares under an incentive scheme operated by the parent company, National Australia group .

Gilbert and riches

Martin Gilbert, chief executive of Aberdeen Asset Management, saw the value of his overall remuneration tumble in the latest year despite bumper profits for the fund manager, but remained one of corporate Scotland's best-paid executives.The annual report of Aberdeen Asset Management, published yesterday, shows that Gilbert received total pay and benefits of £3,096,000 in the year to September, down from £3,951,000 in the preceding year . The fall in remuneration was due to the fact that Gilbert elected for employer contributions to his defined contribution pension scheme with the firm to cease. Aberdeen said following changes to UK pensions law on April 6, 2006, other employees had elected to follow suit. The A-day changes included the introduction of a £1.5m limit on individual pension funds.

Even at the reduced level, Gilbert's package makes him one of Scotland Plc's biggest earners. In 2006, Sir Fred Goodwin, chief executive of Royal Bank of Scotland, earned a basic salary of nearly £1.2m and a performance bonus of £2.8m, boosting his total package by over £1m on 2005 to just under £4m.Sandy Crombie, chief executive of Standard Life, earned a pay, bonus and benefits package worth £1.6m in 2006.

Stewart Milne of the building company took home more than £7.5m in salary, benefits and dividends in the year to June

For those who have too much

Royal Bank of Scotland has awarded millions of potentially lucrative share options to top executives under a controversial new bonus plan a report in The Herald says .

Chief executive Sir Fred Goodwin, head of corporate markets Johnny Cameron, and Larry Fish, head of US subsidiary Citizens, are among the major beneficiaries. The scheme could see executives including Goodwin gain three times their basic salary - which in his case would amount to £3.6 million. Goodwin was granted options over nearly 700,000 shares. Cameron was granted options over 374,332 shares and Fish over 523,640 shares. Finance director Guy Whittaker and retail markets chief Gordon Pell also received big awards.

RBS announced to the stock market yesterday that it had granted options to 15 senior executives which will vest between 2010 and 2017 at an exercise price of 561p, a level which some might view as low by recent standards. RBS shares closed up 1.5p at 577p last night, but were until recently trading well above £6. RBS did not respond to a request for comment on how it had arrived at the apparently low exercise price.

Stagecoach Returns

Brian Souter of Stagecoach pocketed another £100m recently following the company's decision to return cash to investors is on his way to making another £1m. Souter was yesterday granted deferred bonuses worth nearly £800,000 at last night's closing share price of 182.75p. Souter had been granted 141,526 deferred shares under the 2005 executive participation plan with a paper value of £260,000. He also got 294,129 "incentive units" under the firm's long-term incentive plan.

Another beneficiary of awards granted yesterday was Martin Griffiths, the finance director. He got 70,677 deferred shares under the EPP, notionally worth more than £129,000, plus a 199,170 LTIP units worth nearly £365,000. These awards also vest in 2010. Four other executives, including rail chief Ian Dobbs and Les Warneford, managing director of Stagecoach UK Bus, were granted deferred shares under the EPP plan. Dobbs got 42,710 and Warneford 39,501.

Electric shocks

It is good to see that your electric bill went to good cause .

Scottish & Southern Energy , the Perth-based parent company of Scottish Hydro-Electric , has handed its top executives inflation-busting salary increases after a review of boardroom remuneration concluded that they were underpaid .
SSE's four executive directors saw their basic salaries rise by between 9% and 17%.

Chief executive Ian Marchant is now on a basic of £720,000 - an increase of around £100,000 in the past two years. Also proposed to the annual meeting was that the maximum bonus "cap" for executive directors under the company's new performance share plan be increased from 100% to 150% of salary.

Marchant's salary, annual bonus, and benefits jumped by more than 16% to £1.21 million in 2006-07, up from £1.04 million in the prior financial year. As well as his basic salary of £675,000, bonus of £518,000 and benefits of £17,000, Marchant was awarded 46,081 shares under the deferred bonus plan.These shares had a value of nearly £670,000 at last night's closing price . In all , taking his total remuneration for the year to nearly £1.9 million . Marchant also made a notional gain on the exercise of share options of £408,876.

Colin Hood, who joined the board of SSE in January 2001 as power systems director and became chief operating officer in October 2002, was paid salary, bonus and benefits totalling £894,000 in 2006-07, up from £772,000 last time. Hood was awarded 33,446 shares under the deferred bonus plan worth nearly £500,000 at yesterday's closing price

Finance director Gregor Alexander received £656,000 in 2006-07, up from £531,000 last time, including a basic salary of £360,000 and bonus of £282,000.

Alistair Phillips-Davies, the energy supply director, took home £659,000, up from £531,000.

Chairman Sir Robert Smith, meanwhile, saw his pay rise from £218,000 in 2005-06 to £266,000.

Next time you are told you are over-paid , remember what Scottish Hydro consider as under-paid.

meanwhile also reported by The Herald , the new Scottish Media Group chief executive Rob Woodward is set to be handed free shares in the troubled media group potentially worth £2.5million . A revamped long-term incentive plan (LTIP), which will be put to a shareholder vote at an extraordinary meeting on Friday, will see a clutch of executives share 2007 awards with a potential value of £6.8 million. Finance director George Watt, sole survivor of the much-criticised "ancien regime" at SMG, could pocket more than £900,000 when the 2007 LTIPs vest in three years' time.
Rewards not to compensate for being underpaid , but to "incentivise and motivational and retentative " purposes .

Paid too Much

The name Martin Gilbert cropped up in a previous blog on Socialist Courier for being an over-paid fat cat parasite . Seems as if we aren't the only ones who question his worthiness .

Pirc, which advises largely public sector pension funds has singled out Aberdeen Asset Management for criticism in its latest review, branding as "excessive" last year's £4m pay package for chief executive Martin Gilbert. The company's annual report revealed at the end of December that Gilbert was paid a £2.6m bonus during the year, on top of a basic salary of £435,000, and also received pension contributions of £890,000. The total of £3.95m compared with £1.2m the previous year.

Pirc is urging its members to vote against Aberdeeen's remuneration report at the annual meeting next week claiming that its chief executive annual bonus equivalent of 656% of salary and an LTIP (long-term incentive plan) award of 312% of salary is indeed extravagent .

Pirc is very welcome to contact the Socialist Party and we will gladly furnish them with a further list of overpaid capitalist bureaucrats .