One of the most famous "businessmen" in the country is Sir Frederick Anderson Goodwin. He is famous for many things, most notably his stint at RBS when he presided over the most spectacular rise and fall since the Roman Empire. Sadly for RBS, unlike Julius Ceaser, we didn't hear the words "Et Tu Brutus" when the board realised he was out of control. Many people have a strong dislike of bankers following the crisis, the ordinary staff of RBS were amongst the biggest victims of the reign of Sir Fred. Whilst we associate bankers with huge bonuses and excess, most of the 148,500 (and shrinking by the day) employees of RBS are on pretty ordinary salaries, doing pretty mundane jobs such as cashiers, call centre operators, and IT support staff. The salaries of these staff is in line with similar jobs in companies in other business sectors (ie a call centre operator for RBS earns the same as one working for Rentokil despatching rat ctachers).
For most of the staff of RBS, the bonus they receive isn't a million pounds a year, it's usually between 3-7% of their salary. Staff are incentivised to take this in shares, which they keep for 3 years to avoid income tax. Most staff kept the shares for considerably longer, as a top up fund for their retirement. Now just suppose you are a worker in a call centre and you earn £20,000 per year. If the average bonus (in shares) you received was 5% a year, you'd have a nest egg of £30,000 in shares (assuming they stayed the same price) for 30 years. For many people retiring, this gives a handy level of security. What did Sir Fred do to these savings? Well at their peak the shares were £7. Sir Fred presided over a decline, where at one point they'd sunk to 10p. That £30,000 nest egg was worth less than £500. At present they'd worth approx £2,000.
Worse for many of them, they lost their job and unlike Sir Fred didn't get a massive multi million payoff for ruining the company.
As a result of this, RBS staff are not members of Sir Fred's fan club. It wasn't always so. When Sir Fred took over Nat West he was the darling of the city and was feared and respected by the staff who worked for the company. Sir Fred was a proponent of the macho school of management. During the Natwest takeover, it was made clear to staff that "it's my way or the highway". So browbeaten were staff, that when he eventually blew it by buying ABN AMRO at price and time which destroyed the company, no one had the balls to argue. No one was left who had the backbone to stand up and say "No sir Frederick, that will bankrupt the company".
The rest is history. We all have to pay for this. Have we learned? Anyway, as I said in the title I know a little story about Sir Fred that will cheer you up. A friend of mine (who shall rename nameless until he retires from the banking industry) works in the part of RBS which handles payments with credit and debit cards. His job is to make sure the system is available 24 hours a day. For doing this, he gets a decent salary, but nowhere near the millions of pounds that the traders and executives get. At the height of Sir Freds pomp, he was working late one day in the office when the phone went of the manager of his department. The manager had gone home. In RBS they have a telephony system where you can pick up other people's phone's. My friend picked up the call for the manager. The following conversation took place.
Caller : "This is Sir Fred Goodwin. My wife has just tried to purchase something with her credit card and it has been declined. I demand that you do something and sort this out. She's very cross and embarrassed and so am I".
My friend : "Sorry, this is the technical support for system problems, we don't deal with individual card enquiries. You need to call the number on the back of the card"
Caller : "Who do you think you are talking to? You run the system. I want you to go onto the system and sort this out immediately. Don't muck me about or I'll sack you. Do you know who I am?"
My friend "More to the point Fred, do you know who I am?"
Caller : "No, why should I know or care who you are?"
My friend "Because if you knew who I was, I wouldn't be able to tell you to fuck off. Fuck off Fred"
And with that he hung up and went home, to the sound of his managers phone ringing away again.
Respect.
For most of the staff of RBS, the bonus they receive isn't a million pounds a year, it's usually between 3-7% of their salary. Staff are incentivised to take this in shares, which they keep for 3 years to avoid income tax. Most staff kept the shares for considerably longer, as a top up fund for their retirement. Now just suppose you are a worker in a call centre and you earn £20,000 per year. If the average bonus (in shares) you received was 5% a year, you'd have a nest egg of £30,000 in shares (assuming they stayed the same price) for 30 years. For many people retiring, this gives a handy level of security. What did Sir Fred do to these savings? Well at their peak the shares were £7. Sir Fred presided over a decline, where at one point they'd sunk to 10p. That £30,000 nest egg was worth less than £500. At present they'd worth approx £2,000.
Worse for many of them, they lost their job and unlike Sir Fred didn't get a massive multi million payoff for ruining the company.
As a result of this, RBS staff are not members of Sir Fred's fan club. It wasn't always so. When Sir Fred took over Nat West he was the darling of the city and was feared and respected by the staff who worked for the company. Sir Fred was a proponent of the macho school of management. During the Natwest takeover, it was made clear to staff that "it's my way or the highway". So browbeaten were staff, that when he eventually blew it by buying ABN AMRO at price and time which destroyed the company, no one had the balls to argue. No one was left who had the backbone to stand up and say "No sir Frederick, that will bankrupt the company".
The rest is history. We all have to pay for this. Have we learned? Anyway, as I said in the title I know a little story about Sir Fred that will cheer you up. A friend of mine (who shall rename nameless until he retires from the banking industry) works in the part of RBS which handles payments with credit and debit cards. His job is to make sure the system is available 24 hours a day. For doing this, he gets a decent salary, but nowhere near the millions of pounds that the traders and executives get. At the height of Sir Freds pomp, he was working late one day in the office when the phone went of the manager of his department. The manager had gone home. In RBS they have a telephony system where you can pick up other people's phone's. My friend picked up the call for the manager. The following conversation took place.
Caller : "This is Sir Fred Goodwin. My wife has just tried to purchase something with her credit card and it has been declined. I demand that you do something and sort this out. She's very cross and embarrassed and so am I".
My friend : "Sorry, this is the technical support for system problems, we don't deal with individual card enquiries. You need to call the number on the back of the card"
Caller : "Who do you think you are talking to? You run the system. I want you to go onto the system and sort this out immediately. Don't muck me about or I'll sack you. Do you know who I am?"
My friend "More to the point Fred, do you know who I am?"
Caller : "No, why should I know or care who you are?"
My friend "Because if you knew who I was, I wouldn't be able to tell you to fuck off. Fuck off Fred"
And with that he hung up and went home, to the sound of his managers phone ringing away again.
Respect.
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