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Ed gets his Mili-bonus

January 30, 2012 9:57 am

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So Stephen Hester won’t be getting his bonus, having decided to decline it in fear that the commons would vote to take it from him. It’s hard not to feel a little sorry for the RBS boss. Not because he won’t be getting his bonus (he’s already more than adequately renumerated), but because he has become something of a public hate figure of late, which seems a tad unfair. After all, he’s not Fred Goodwin is he? Although I wouldn’t go as far as Tory MP Mark Field who described the hunt for Hester’s bonus as a “lynch mob”. Field is the MP for the city and seems to have got a tad carried away…

But if Hester hasn’t got him bonus, Miliband has certainly got his, and deservedly. His move to hold an opposition day debate was pivotal in forcing Hester to “think again” and as was the case over BSkyB, Miliband is both on the side of the public, and has gained from being bold. That will strengthen the hand of those in the Miliband camp who want to see a bolder Miliband in 2012. Not “Let Ed be Ed” exactly (especially as Miliband appears to be something of a cautious character, often at crucial times), but instead “Let Ed be bold”.

What Miliband must do now is make sure he maintains his momentum. What we clearly saw post-phone hacking was that he can seize the initiative and spot a passing bandwagon, yet his natural reasonableness allows him to do this without looking like a bandwagon jumper. Yet that same reasonableness also seems to be a momentum killer, which has led some to question wither he has the requisite killer instinct. After phone hacking his personal ratings spiked, yet soon after they were back where they’d been before.

Ed at times seems happy to win (or at least change) the debate without getting the credit for it. A smart manoeuvre this weekend has allowed him to gain the upper hand, but Cameron is a canny operator. He’s been saved an embarrassing commons vote by an even more embarrassed Hester – and dodged a sizeable bullet. Ed now needs to press home his advantage – whilst he still has one – lest he comes the Andy Murray of Westminster.

An intelligent exponent of the game, but unless he’s able to drive home an advantage – not a winner.

  • Anonymous

    So let get this right Labour has done something to stop the bonus of one person, and it took defeat to do it.

    That’s  hell of a record to point out to people we have succeed finally in stopping the bonus of a man, who I think would have given it back knowing the feeling of the public, I suspect he will have been told once this settles down the bonus you get when you leave or when the bank is sold will be much bigger to include this money you have lost now.

    But of course the people below this Mr Hester will be getting the £100,000 bonus payments right down to Fred  on the front desk will be getting is head office payments, not forgetting many of the banks directors have been given a 49% pay  hike.

    People I suspect will remember that Labour failed and that Cameron’s government succeeded even if they did not even try and as for Miliband I doubt to many people will know about it or care about it as they will remember Milibands words on carrying on with the Tories cuts, and how these same bankers who caused the  bail out where made Lords by a Labour party sucking up to the rich

    • http://twitter.com/gonzozzz dave stone

      Looking on the bright side, at least Ed wasn’t speaking up for “hard-working” Mr Hester.

      • Anonymous

        What bright side labour jumping on band wagons , because they think the people are daft enough not to remember the past.

        I suspect that labour party office will be jumping around  with the idea labour will be seen as being a power again, but the fact is the pressure on Hester has been most from his own people, and I suspect he was called in told give it back do not worry you will get more in the future. These people do not give anything back deals behind closed door is what changed his mind.

        Labour believes that Miliband did so well on the Murdoch’s, but of course once people knew what Blair had done it was not so bright any more 

    • http://twitter.com/Nicky2806 Nicky

      You’re a Tory. Why don’t you clear off to your own blog site. If you can get on it that is?

      • Anonymous

        true mate, but  I enjoy it here.

  • Hugh

    Yes, Ed once again boldly and bravely leading from the front. Having that common touch lacking among the Tory toffs he’s tapped straight into the zeitgeist and bravely come out against bankers bonuses. And this after fearlessly coming out against the tabloid press!

    As long as we get some good scandals involving estate agents and lawyers in the next couple of years, a Labour victory is all but certain.

    • Anonymous

      Perhaps ‘bold and brave’ Ed Miliband can pay back the inheritance tax he avoided and also he could force the Labour shadow cabinet to pay back the relocation bonuses they received after losing the general election.

      The other Labour mouthpeice on this issue, Chuka Umunna, might also like to take a stand by bringing all the family money back from the offshore accounts.

      They could also look at the thousands of £1M plus bonuses paid to RBS staff from bailout to  the time when Labour lost the election.

      Of course Hester’s bonus was in shares which he could not cash in for a few years. Perhaps the taxpayer could have gotten a better deal if RBS share value rose and when the time came for him to cash them in he would be liable for more tax?

       

    • Anonymous

      This goes back 30 years IMHO Hugh; perhaps now reached the buffers.

      I think a wider picture that one man receiving a massive bonus;
      it’s all the others too- and why happened for so long.

      Also, what’s ultimately in the public interest-
      eg issue of power concentrated where, and vested interests.

      J

      • Anonymous

        If I could just share a couple of things:

        “David C: is he appealing to women?”

        T’graph.

        (Excellent article; also goes into wider detail about polls
        and perception.
        For example- “you gov recently:
        37% of men back DC; 42% women- Labour.
        Also much more stark on mgt of economy.)

        I do think too, on this issue- Ed M is really onto something;
        it also ties in with the content of his conference speech.

        The article above hilights that the one area where DC
        is considered weak is in understanding the conditions
        of ordinary people’s lives- ie “getting it.”

        Ed is perceived as much more in tune on this-
        by both men and women.
        In that respect, he needs to play on this strength,
        and salient issues.
        Keep talking common sense and getting down
        to brass tacks, so long as it’s real- it comes across well
        I think.

        Also, what looks like a great event:

        http:/publicinterest.eventbrite.co.uk

        Cheers, Jo

  • http://twitter.com/_DaveTalbot David Talbot

    The Telegraph has gone to painfully distorted lengths to try
    and justify the Hester bonus: 

    Taxman ‘denied £500,000′ as Stephen Hester waives £1m RBS
    bonus

     

    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9048447/Taxman-denied-500000-as-Stephen-Hester-waives-1m-RBS-bonus.html 

    Suggesting that Hester would have paid £500,000 income tax on his
    £963,000 in shares is, as the Telegraph no doubt knows, complete bollocks.
    He would have paid Capital Gains Tax, which is 28%. The ‘ ’ quotation marks in
    the headline, “estimates suggests” and “experts claim” are all synonymous with  journalists who are making it up.

    • Hamish

      Surely an allocation of shares is a benefit in kind and so liable for income tax. End of.

      • Anonymous

        I think only when sold, in the mean time they can of course go up greatly and actually be worth a lot more in the future.

    • Anonymous

      I think it likely that every time figures like that are quoted David-
      there is a feeling of indifference and even fury amongst the public.

      It’s not about individuals so much as what goes on in big business
      and big finance circles; so completely out of step with about 99%
      of the population.

      It also goes to the heart of Tory ideology perhaps-
      in a belief about protecting the most priveleged in society,
      and a laissez faire approach to market forces?

      This may well show up a stark contrast to all the recent rhetoric
      about public service/sector workers; “drain on taxpayers” etc.
      In fact, hollow.

      Jo

  • http://twitter.com/gonzozzz dave stone

    “What Miliband must do now is make sure he maintains his momentum.”

    A very difficult thing to do considering the goggle-eyed attachment to big business and big money that still persists within the PLP.

    Ed’s Glasgow speech today, where he’ll claim the real divide in the U.K. is between the haves and the have-nots,  looks to be a promising way of developing a focus on social justice. His perspective could easily be used to high-light a whole range of alternative economic priorities.

    And Ed has stated his willingness to go head-to-head with Cameron on the theme of predator capitalism. Now is the time to do it.

    But will the usual suspects be dragging their feet while muttering accusations of anti-business rhetoric?

    • Anonymous

      I suspect your correct I may well be wrong but it does seem to me Miliband has got himself a few  new Spin doctors or script writers, same thing really.

      But telling Scotland  we are in this together will not go down well, when you see what labour was  talking about, Scotland has a high dependency of welfare, and I know with relations still living in Falkirk and Grangemouth they do not think Labour knows  enough about the nation and I think they are right. The old coal mining and steel working and ship yards and fishing take a hell of a toll out of a person, telling these people you can work on a few more years, or when your back gives out or you lose a leg or  two you can carry on working is not going to go down to well.

      I suspect like always these meetings and speeches will be given in front of the activist  not the public.

  • http://twitter.com/all_thats_left_ All Thats Left

    The bankers have had enough. Note the reaction to the Hester affair by the investors, millions wiped off the value of RBS shares. The bankers backlash is about to being in earnest and the left must react in a robust way. 
    Follow the link for my analysis of what we’re likely to see as The Bankers Strike Back: http://www.allthatsleft.co.uk/2012/01/coming-soon-the-bankers-strike-back/

  • JC

    I wasn’t aware that Ed was on the side of the public over BSykB. I thought he wanted to stop Murdoch gaining control. The only members of the public against it were the Murdoch haters. Most didn’t care, and some felt that there needed to be some bulwark against the monopoly of the BBC and ITN.

  • jaime taurosangastre candelas

    Lord Myners of the last Labour Government is very quiet on this debate.  It was he who negotiated Stephen Hester’s contract, which included this bonus payment.  It is probably a good thing for Ed Miliband that Mr Hester has voluntarily foregone his contractual right to this bonus, as otherwise Ed could have been left looking a bit stupid.

  • Dave Postles

    All Uncle Hester had to do was to proclaim that, in the wider scheme of things, he felt that he was worth the money, but that, on wider consideration, he would be passing the shares to a charity.  BTW, Myners has made a statement that there is no contractual obligation to offer the bonus – as has been widely reported in the newspapers and on the radio.

  • Anonymous

    I think you make insightful and valid points Mark.

    I agree need for holding the momentum;
    I think what Chuka U. said about addressing wider culture
    and practices within industry, and government
    attitude/policy needs to go much further.

    (VC has made a start, but no where near enough.)

    The public mood surely chimes with this, in context of hard times
    for everyone; there will be little sympathy for anyone receiving
    huge bonuses.

    I agree it would be wrong to villify any one individual;
    this is just a symptom of a much wider and deeper problem.

    Perhaps a narrative could be developed which incorporates
    events such as Occupy; pay and pensions’ policy towards
    public services’ workers; massively rising unemployment;
    poorer communities being hit hard with harsh cuts?

    In other words, it’s very much a live issue with the public,
    and will probably become much more visceral as living standards
    get squeezed.

    On the others side, I do think there is a massive issue with
    grotesquely high pay and a bonus culture in the city,
    and probably has been for the past 30 years.

    Governments have been complicit in this- maybe they think
    unable to challenge or regulate as held over a barrel
    in some ways? I do think it’s time to look at much more closely;
    and far more transparency and public accountability.

    Also more equilibrium across all sectors of society-
    in aspects of pay, pensions and working conditions.

    Thanks, Jo.

    • Anonymous

      I do not think it chimes with the peoples anger , the public over the sell out by Labour and the silly band wagons they are making.

      Ed stopped the bonus what rubbish, perhaps he should have stopped it when he was a minister, nope well he could have spoken out against it

      • Anonymous

        Robert, I’m referring to the public feeling and perception over the whole issue,
        not just what one party says or another.

        But Ed M is not responsible for mistakes made in the past, so one would assume
        relatively clean slate to make his own case.

        He did make strong reference to issues like this in his conference speech also-
        eg about “predatory” capitalism; so standing up on this is consistent,
        and is on the right side of the public argument about fairness and equity
        across society.

        I’d agree with you that New Lab were maybe fairly complacent
        over the so called “fat cat”culture and behaviour in the city;
        but then again- pre 2008 maybe it wasn’t seen as so urgent?

        (Not in the public mind though- but maybe people feel
        unable to have any say over what goes on in co orporate big business.)

        Maybe events like these will shape the debates in years to come and actually change something?

        Jo

        • Anonymous

          The simple fact of the matter Brown should have ensured when he offered the money to the banks  that he had written agreements about the banking bonus payments, this would have solved it all.

          But then you go from Brown to Blair who did little, we are told because the Banks would have moved away, mind you with the debt of the British banks who would have taken them.

          The simple fact labour were worried about  banks moving away and then did not want to up set the directors or the management , and it no joke that labour  had worked out Hester  contract which would have stated what he could get.

          Labour moans about my party the Tories, the fact is Labour would have done  nothing much that the Tories had done now, said little kept their heads and hope it would go away.

  • Anonymous

    The symbolic importance of this should not be lost. 
    We have been told we have to pay these masters of the universe far more than the rest of us otherwise they might leave.No-one tells us that German and Japanese top executives receive far less, usually half, of the pay of the British uber mensch.Of course the German and Japanese continually out perform both UK and USA companies, one would expect that they would be rushing to join the “compensation” gravy trains but they seem perfectly happy.I’m sure Mr Hester is crying at home with his £35 million RBS package, on his 350 acre country estate and his homes scattered around Europe. 

  • http://pulse.yahoo.com/_SKUIBA5QF5QV4LRMURWBNMSGOI Lisping Ed

    I think it’s fairly obvious this would have blown up in Miliband’s face eventually. The public aren’t stupid – I think they know Miliband is a weakling, and this was a piece of shallow, political opportunism.

    If there were a thousand Stephen Hester stories before the election, Middle England would still not vote for a grotesque, lisping odd- ball like Miliband.

    • Anonymous

      There is more to Britain than Middle England, and if Ed Miliband lisps, that is not something he has any control over – Blair and Duncan-Smith, for example,  have rictus grins on their oily faces, which they could do something about. Middle England quite liked Blair -at least for a time.

      The public threw a lot of money into RBS, so I think the public have every right to feel angry that one man could have benefitted so outrageously.

    • Anonymous

      better a lisping Ed then a Dead brained troll yes

  • charles.ward

    So Ed Miliband is prepared to use the politics of envy to get some short term popularity even if it risks the billions of taxpayers’ money invested in RBS shares.

    Why stop there, why not sack the board (they decided on the bonus after all) and the government could run the bank based on newspaper headlines and what the man down the pub thinks bankers should earn.  What could possibly go wrong?

    Of course Ed would never do that if he were in government but that won’t stop him calling for it in opposition.

  • Anonymous

    Funny to read the comments of the working class Tories on here defending the bonuses paid to their masters.

    The problem is that UK big businesses have the worst top management in the western world along with the US and yet they are paid far in excess of their counterparts elsewhere.

    Executives voting on the pay that the other gets, it’s a rigged market with little or no say by the shareholders.

    Working class Tories still alive and well in the UK and still bowing scraping to their betters.

  • Anonymous

    Re your last paragraph Guy- everyone is responsible for contributing;
    it’s not a case of either/or. Also- both sectors are interdependent.
    I think the same standards of public life should apply to everyone,
    which includes excesses in salaries.

  • Anonymous

    Quite right – I imagine Hester and a few senior board members will now leave (I would!) and take jobs elsewhere. RBS will then become a government department run by someone  from another successful one (say MoD) or perhaps a Mr G Brown could be persuaded.

    I wish people would understand that the balance sheet of RBS was 2 trillion (bigger than UK GDP) which Hester has reduced by £800bn.

    And finally – who would work here as CEO when your contract can be ripped up to appease a gang of hippies at St Pauls and a ‘public opinion’ (which only seems to apply to certain things (i,e, not the EU, capital punishment etc)

    It’s a disgrace & Cameron & Miliband should hang their heads in shame.

    • Anonymous

      Who said it’s been ripped up, who says a new one has not been written which will perhaps see him getting more when he leaves.

      I think deals have been done as for leaving well , he’s getting a good wage and I suspect his redundancy will be far better. so I suspect he will lose little.

      • Anonymous

        As far as we can tell, his contract said £1.2m salary plus a range of bonus payments depending on various performance criteria, some of which he made, some of which he didn’t. This is called variable pay dependant on performance, and always has an ‘at discretion’ clause in it. Calling it a ‘bonus’ misunderstands the position & RBS should have been better at explaining this.

        By putting political pressure on him to renounce the bonus part of his remuneration i.e. a vote in Parliament FFS! he can probably never get another bonus, what he agreed with the government when they head hunted him for the job, his contract is effectively useless.

        He won’t be made redundant as the job still exists – he probably has severance terms in his contract (good job too).

        You can argue about the numbers and whether anyone is worth that and so on – but the market sets the rate as for anyone else.

        • Dave Postles

          The representatives of the shareholders were prepared to advise against the award of the bonus/PRP/discretionary award.  That’s all it was. It’s tantamount to the notion of a binding vote by 75% of shareholders.

          • Anonymous

            Sorry – no.

            Don’t forget the payment was actually awarded and then refused by Hester. It wasn’t withdrawn, changed by anyone.  UKFI actually approved it I think.

            The threat by Miliband of a non binding vote in Parliament was enough for Hester to refuse.

            Even then, UKFI could have approved it.

            It is political vilification of an individual by both Miliband, Ummana (who probably wrote lots of similar contracts previously) and finally Cameron & Osborne who should have stood up for Hester.

          • Dave Postles

            It’s the same as the notion which BIS intends to introduce: a remuneration committee recommends an award, but the shareholders can only vote on that award at their next AGM in retrospect or call an EGM – a binding vote of 75% of shareholders. Cameron and his cronies were not prepared to use the mechanism which they are intending to introduce. Cameron is all talk, but no action.

          • Anonymous

            Sorry must disagree

            You can’t say they haven’t applied some proposal which may or may not become law at some future date. That is not the current position.

  • Anonymous

    Do you expect any money back I do not as a tax payer, the argument that tax payers  own a Bank go in and ask for a  few  quid from your bank and see what happens,  government own the banks not tax payers, once we pay our taxes it’s no longer ours is it

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