(no subject)
Dec. 3rd, 2009 06:27 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
sabremeisterhttp://news.bbc.co.uk/1/hi/business/8392791.stm
Now, I'm not an economist or banker, but surely, the following applies:
Government organisations do not make profits - any excess funds generated by income are channelled back into the organisation as infrastructure, or direct to the treasury as revenue.
RBS is 70% (soon to be 84%) government-owned.
Therefore, 70% (soon to be 84%) of RBS's profits should go immediately to the treasury, or be used as investment in new branches and employees, and any bonuses the directors want to pay should come out of the 30% (soon to be 16%) profits remaining to them.
Now, if RBS's investment banking division made a £6bn profit this year, and 70% of that is £4.2bn, then RBS have £1.8bn left to pay any bonuses they want - and they want to pay £1.5bn in bonuses to the investment banking division (a figure which is 25% of that division's profits). I don't see a problem with that. If they want to spend over 80% of their profits on rewarding irresponsible dickheads who were largely responsible for getting them into a situation where 70% of their business is now government-owned, that is fine by me. It will leave them with only £300m to play with next year, and that will mean that it will be impossible to generate such huge profits, which in turn means the bonuses will be reduced to a sensible amount, and maybe they'll get the message.
Or maybe they could just be sensible right now and only pay 25% of their £1.8bn profit in bonuses, which is still a ridiculously huge amount (£450m), but at least it's one that can be comprehended by the average person who earns £20k a year.
Now, I'm not an economist or banker, but surely, the following applies:
Government organisations do not make profits - any excess funds generated by income are channelled back into the organisation as infrastructure, or direct to the treasury as revenue.
RBS is 70% (soon to be 84%) government-owned.
Therefore, 70% (soon to be 84%) of RBS's profits should go immediately to the treasury, or be used as investment in new branches and employees, and any bonuses the directors want to pay should come out of the 30% (soon to be 16%) profits remaining to them.
Now, if RBS's investment banking division made a £6bn profit this year, and 70% of that is £4.2bn, then RBS have £1.8bn left to pay any bonuses they want - and they want to pay £1.5bn in bonuses to the investment banking division (a figure which is 25% of that division's profits). I don't see a problem with that. If they want to spend over 80% of their profits on rewarding irresponsible dickheads who were largely responsible for getting them into a situation where 70% of their business is now government-owned, that is fine by me. It will leave them with only £300m to play with next year, and that will mean that it will be impossible to generate such huge profits, which in turn means the bonuses will be reduced to a sensible amount, and maybe they'll get the message.
Or maybe they could just be sensible right now and only pay 25% of their £1.8bn profit in bonuses, which is still a ridiculously huge amount (£450m), but at least it's one that can be comprehended by the average person who earns £20k a year.
