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Thursday, 3 December 2009

Why the fuss?

Let's get something straight: there is nobody at RBS who is worth £1m a year even in a good year, and no US bank is going to rush out to grab their disaffected staff, but...

Why are the government having a go at the bank in the press for possibly paing out mega-bonuses? After all, RBS is 70% owned by the taxpayer, and will soon own 80%, so the Chancellor can tell the board what to do through a special resolution and they must obey.

So, if the government really wants to change the pay policy at RBS, they can.


Edward Beale said...

But the directors have a personal responsibility to maximise value for minority shareholders. So they must resist any attempts by the majority shareholder that would reduce the value of the business. Also minority shareholders could bring a case against the majority shareholder for action that reduces the value of the business.

Alex said...

Paying million dollar bonuses is not value for the business. There are plenty of good people who would do the same job for less than 7 figures. RBS is no great pool of talent.

Bill Bell said...

Good post.