Antiheroes Of The RecessionArticle Category: Finance
Getting to the top of the pile takes know-how, guts and determination but what happens when it all goes wrong? The recession hit us like a tidal wave but there was no let up in the handing out of big bonuses. Well, at least not until the investors had their say.
Here are eight business leaders who felt the wrath of customers and investors alike...
Bob DiamondHead of Barclays, Bob famously said that "…the time for banker remorse..." was over. Easy to say when you're awarded a £6.5 million bonus. You can understand the banks being a bit coy about lending their money when their profits have dropped by 16%. The problem comes when they've been propped up by the tax payer, i.e. the people that want to borrow, and the head man gets a whopping bonus. Bob's pay off was a pretty big slap in the face for the UK tax payers.
Fred GoodwinHow he must have revelled in his nickname of 'Fred the Shred' until he himself was shredded. The one impressive aspect of Fred's tenure at RBS was the payoff he got when resigned: a cool £700,000 a year pension. Not bad for almost bringing a once prosperous bank to its knees. On the plus side, Fred did have to hand back a significant chunk of his golden handshake and, more recently, he was stripped of his knighthood.
Stephen HesterRBS has been in the news an awful lot recently but for all the wrong reasons. Hester, the head of RBS, has twice had to turn down bonuses of around £1.2 million. The latest round of bad news for Hester came when RBS released untested computer code that resulted in a meltdown and locked out all of their online customers out of their accounts.
Eric DanielsEric Daniels, former chief executive of Lloyds Banking group, must have felt a little down in the mouth when some of his bonus was clawed back. He had to make do with a piffling £900,000, or so, in the wake of the PPI claims cases. But it wasn't all bad news for Daniels; shortly after leaving Lloyds Banking group he joined StormHarbour; a company that specialises in restructuring bank debt for companies. Oh the irony!
Andrew MossSome companies should take a leaf out of the books of the French revolution. 'Boss of failing company losses head in shareholder revolt'! Andrew Moss knows all about prickly shareholders. The ex-head of under-performer insurance company Aviva was more than happy to accept a salary increase of about £46,000. The shareholders disagreed. Sadly, for Moss, he had to make do with £1.3 million golden handshake (just before Madame Guillotine entered the room).
Sly 'Underdog' BaileyShareholders in Trinity Mirror (owners of the Daily and Sunday Mirror and the People) decided to veto a very juicy bonus for chief executive Sly Bailey. Although Bailey had cut operating costs by £104m she also oversaw numerous redundancies, a 90% drop in share value and profits smashed from £150m to £20m during her time at the helm. Bailey left Trinity Mirror with a rather handsome pay off of about £900,000. Proof that you don't need to be a success to win big!
Gareth DavisAll Davis was being offered was a measly £1.2m retention bonus. Over 50% of William Hill's shareholders objected to the package. End of story? No. A group of about 250 investors assembled at the annual general meeting in London. When a vote was taken, over 80% voted in favour of the package. Now that's the sort of recount the government needed at the last election! Now, I'm not saying this was in any way rigged, but the current government could probably learn a lesson or two about ballot box stuffing in time for the next election.
When you read this you should never assume that it is any way remotely anti-money. In fact, we need entrepreneurs and businessmen and women to build the foundations of an affluent society. The problem comes when some individuals think they should be rewarded for failure. This is not egg and spoon race at the local primary school. We can't all win trophies for simply taking part. We need to at the top of our game otherwise someone else is going to snatch it all away from us.
Article written by James.
Original article date: 11 July 2012
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