Stephen Hester’s ‘Bonus’

It seems today that the Chief Executive of RBS has chosen to waive his bonus this year.  This has been greeted with general good cheer by our politicians and most people that I have spoken to.  I find it quite wrong that he should have to give up his bonus.  This may shock many – as I’m generally of a gruniad persuasion.  My main problem is that this is essentially populism riding roughshod over contractual obligations.

Populism – “a form of mobilization that is essentially devoid of theory”[1]

David Cameron loves populism, it allows him to mask some deeply unpleasant, and frankly idiotic ideas.  He generally likens things to ‘things everybody knows about’, eg likening the deficit to ‘the nations credit card’, and ‘everybody knows that you don’t pay off your credit card by spending more’!  A massive simplification.  There are many ways to pay off a deficit (read The General Theory of Employment, Interest and Money if stuck Dave), such as investment in jobs, growth & capital projects to boost revenues & reduce the unemployment bill. I’m not saying this is necessarily better, but populism stifles the debate.

I digress.  Let’s go back to Mr Hester’s bonus.  A potted history.  RBS went very wrong, we got rid of Fred Goodwin (as he will be when he is shortly de-knighted – Yes apparently that can happen!), following the need to give RBS lots of money.  Having given RBS lots of money, we pretty much owned the bank, but unfortunately we didn’t really have any money left.  So that we would get our money back, as we are a tad short of spondulicks, we decided to make sure the bank made lots of money, made itself less risky, and got the share price up.  Since this was such an important job, we decided to spend a large amount paying for somebody who knew what they were doing to be in charge.  Enter Stephen Hester.  The contract agreed gave him a very large salary (just over £1,000,000), and some potentially huge payments on success indicators (not just share price).  It could be argued, having read the shareholders annual report regarding his remittance package (thanks Ross), that perhaps more of the indicators should relate directly to share price, but the contract was agreed.  We basically said, ‘do these things and we’ll pay you loads of money, if you don’t we won’t’.  These things were specific and measurable, and contractually laid down.  Indeed the more he gets, the more we get back!

Whether this was a good deal or not is up for debate, indeed it probably wasn’t the best that we could have got.  What we can’t escape is that Mr Hester has done the things that we said he should do in order to earn a bonus equivalent to just under a million pounds.  He has met his side of the contract, but then why should we?

Enter ‘call me dave’ with a bit of populism saying, I paraphrase – ‘These bankers have caused these problems, this is obscene, he should think about waiving his bonus’.  The need for this forming of public opinion is clear, as he couldn’t break the contract without causing havoc.  No bother, bit of populism will sort it out – makes me look good, sorts out the bonus, done.

On a lighter note – how does the approximately £2,000,000 package compare with others?  £2,000,000 is about £40,000 a week.  Who else gets that?

Tom Cleverley

Darron Gibson

Junior Hoilett

Not even very good footballers!

But then they aren’t employed by a publicly funded body! Who could be paid that in a publicly funded body?? Hmmmm?

Alan Hansen - £40,000 per episode of Match of the Day!!  For telling us that some footballers are quite good, and others are a bit rubbish.

This is obviously a better use of our money than meeting our contractual obligations for sorting out a failing bank, and helping repay the massive amount that we paid into RBS.

---

[1] Populist Mobilization: A New Theoretical Approach to Populism, Robert S. Jansen, Sociological Theory, Volume 29, Issue 2, pages 75–96, June 2011

A Royal Yacht

It has been proposed that as part of the Queen’s Jubilee celebrations, she should receive a gift of a new royal yacht.

Despite the recent claims that the yacht would be purchased by as yet undisclosed (and I suggest currently non-existent) private capital, it is thought that government had intended to spend public money on the project.  We are assured that investors would jump at the chance to put their capital into such a project.  I’m sure many hedge fund managers would think it prudent to invest their money in buying somebody else a yacht.  Let us also remember that one of the main reasons for getting rid of the previous yacht was the extortionate running costs, which I would certainly presume that the Nation would foot the bill for.

It is more likely that this private capital was dreamed up as a way of placating a soon-to-be outraged public if they didn’t think of a way of pretending that they hadn’t been intending to use public money.  A leaked letter by Michael Gove to the Prime Minister betrays Mr Gove & David Willetts’s opinions on the matter.  Mr Gove writes, “In spite, and perhaps because of, the austere times, the celebration should go beyond those of previous jubilees, and mark the greater achievement that the diamond anniversary represents…a gift from the nation to her majesty…as David Willetts’s excellent suggestion of a royal yacht”.  He continues, “If there is not sufficient public money, then we should look for generous private donations to give every school a lasting memento”.  Not content with buying a yacht, he wants somebody to buy perhaps a model yacht for schools to put next to the personally signed & foreworded copy of the King James Bible that Mr Gove has spent £200,000 on sending to schools.  This book is available free on the internet via project Gutenberg, although I concede that this edition would not have a riveting foreword by Mr Gove.  For a preview of his exciting and uplifting narrative try this link - http://video.uk.msn.com/watch/video/michael-gove-bores-students/2gyre20h .

It is a little perplexing that in the above quote Mr Gove suggests that we should purchase a yacht “because of austere times”.  We see why his party have criticised the Keynsian ideas put forward by the Labour party to spend money to stimulate growth.  Why spend on job creating capital projects when you could buy a yacht – sounds far more fun?

 If we are a little worried that he is not living in the real world, at least we know that somebody in the household (his wife) has a firm grip on the vicissitudes of modern life.  As Mrs Gove wrote in an article in the times last year, “Like all angst ridden working mothers I live in terror of upsetting my cleaner”.  Oh what a curse of modern living!

Diane Abbott

In the wake of the conviction of two people called Gary Dobson & David Norris for the tragic murder of a person called Stephen Lawrence, the Labour MP Diane Abbott has been accused of racism in her comments on twitter following the conclusion of the trial.

Miss Abbott said "White people love playing 'divide & rule' We should not play their game #dontwashdirtylineninpublic".  This is hideously racist, though clearly not in the same league as those who committed the murder - let us keep a sense of perspective.  Miss Abbott has apologised for any offence that people may have taken from her comments - a polite linguistic device to say in effect "You're all idiots for being offended by my perfectly reasonable comments".  Why not apologise for making an offensive comment?

Let's explore this in proper detail.

Those who are racist normally divide their excuses into two catagories:-

1,  They are not the racist type.
2,  Their remarks have been taken out of context.

1,  "I've got plenty of white/black/.... friends which proves that I'm not racist".

Miss Abbott has claimed that her commendable (and it is commendable) work on anti-racism in London proves that she can't possibly be racist.  This is clearly a nonsense.  I have never been caught speeding, does this prove that I can never drive too fast in the future?  A policeman may have caught many criminals in his career, does this prove that he may not commit crime (quite pertinent in this case I would wager)?

2,  "My remarks have been taken totally out of context".

Miss Abbott claims that her remarks on twitter were taken out of context, indeed she tells us that the complex ideas that she was trying to convey were a "bit much to get into 140 characters" - which begs that question why do it then?  Apparently it was a reference to colonialism in the past - relevance is lost on me.

In the interests of balance, let's include the tweets before & after the offending one shall we:

I note the tweet before the one that offends.  "ethnic communities that show more public solidarity & unity than black people do much better #dontwashdirtylineninpublic".  In effect saying that minorities that stick together are more successful than black people.  Insulting 'other minorities' by lumping together 'other minorities' and suggesting that they are insular.  Insulting black people by saying that they are less effective & play into white people's divide & rule agenda.

It occurs to me that perhaps she is not racist - as in two tweets she has made offensive comments to all possible different ethnic groups.  Well done - clearly not a racist.

Big Brother

It could hardly be more appropriate that the day that I chose to start posting to my new blog happens to coincide nicely with the start of Celebrity Big Brother.  For once I actually know who some of the people are on it, though this does not make me any less incredulous over the whole concept.

It may shock many that I actually used to quite like Big Brother.  Those of you old enough to recall the dawn of the first series will remember that it was seen as a social experiment - how would people cope cut off from society for several months?  Indeed this was interesting because it moved away from the growing cult of celebrity, it was ordinary people with nothing particularly shocking or even notable about them, trying to get along with complete strangers.  This was set against other TV programming at the time that was formulaic nonsense, with different celebrities appearing each week to sell copies of their latest book/video/CD/tape (remember them?).  Nobody expected the participants of Big Brother to become famous - they were members of the public on a gameshow after all!  Indeed the winner of the first series surpassed all expectations and landed a plum job doing DIY on daytime TV.

The fact that subsequently people went on Big Brother with the intention of becoming 'famous' is where everything (and I do mean everything in a wider context) went wrong.  My apologies for sounding a little as an English teacher, but I can remember when 'famous' was an adjective rather than a noun.  "I am a famous singer/comedian/writer/sportsman/raconteur" rather than "I am famous".  Suddenly people were famous for being famous - indeed one of the prerequisites for achieving Big Brother fame was 'to be yourself' and 'to go on a journey' (tricky when stuck in a house).  To be famous it was necessary to be ordinary.  This concept can be traced back to the viewing of famous people through the lens of the 1980's tabloid press rather than the lens of LIFE magazine and the like in the 1970's.  We de-constructed famous people to make them like us by finding out sordid details about their lives.  Now the reverse was happening - because 'ordinary people' on the telly were just as flawed as the 'celebs' - so the tabloids had plenty to feed on (lucky for them as otherwise they were about to be wiped out by other media).

Looking through the Facebook last evening, it was notable how people were saying things like "Who are these people on Celebrity Big Brother?", "Never heard of half of them", and most telling "Is this Celebrity Big Brother or Normal Big Brother?".  This is the point, the people on Celebrity Big Brother are not famous for anything, they are just 'famous'.  This concept was first introduced by Big Brother, and is about to kill it for good.

Welcome to my blog

Welcome all to my new blog.  I shall be writing about the things I come across and my general bewilderment with modern goings-on.