The Royal Bank Of Scotland and the sweet smell of failure.

It was a bit like that this weekend when I was filling in my on-line tax form but this time I wasn’t daydreaming about something pleasant – first I seethed about all those very rich people who avoid paying tax by making their home-bases somewhere exotic and comfortable where the tax system is, well, a fiddle. Unfair, I thought and I am not wrong.

Then I thought well at least my taxes are going to a good course – hospitals, schools, that kind of thing and then I remembered the Royal Bank of Scotland and my normally even-temperatured blood began to boil again.

If you remember, the Royal Bank of Scotland got into serious financial problems during that shameful time when an international financial collapse was caused by a handful of reckless or ruthless financiers. The RBS posed a £24.1 billion loss, a record for any bank, for 2008 and the British government had to step in to bail it out with what was really nationalisation – it became publicly-owned and paid for by British tax-payers money.

The man in charge then was the infamous (Sir) Fred Goodwin who caused a scandal after he left his job with a monstrously large pension which was subsequently reduced due to public outrage…

…and now we have a similarly annoying story concerning the bank’s present chief executive, the oily Stephen Hester who, until public pressure once more intervened, was being offered nearly £1 million as an annual bonus for 2011. Apparently Mr Hester was ‘surprised by the vilification’ he had received and, I suspect, he was not a little worried that his windows might have got smashed just like those of Fred Goodwin’s were a few years ago.

An RBS source said: ‘It was 100 per cent his own decision. He has decided to waive the bonus permanently rather than reserve his right to take it at a later date. He recognised that if it got to a vote in the Commons, he would have had to give it up anyway.’

Britain’s opposition party, the Labour Party, had announced that they would introduce a parliamentary debate on the subject after Britain’s hapless Prime Minister, David Cameron, failed to stop the bank showering its man with dosh even though he had presided over a 40 per cent fall in the company’s share price whilst consistently failing to hit the Government targets for easing the financial crisis by lending more money to businesses. As before, there are only rewards for failure if you run the RBS.

As I do my sums so that I can pay my tax dues, I’m less than thrilled that some of my money is going towards Mr Hester’s outrageous income.

Still in number-crunching mode, here are the details of Stephen Hester’s income from the taxpayers’ bank:

2008: £4.99million in shares instead of pay and bonuses;
2009: £6.9million total package;
2010: £8.16million total package;
2011: £8.08million total package;
2012: £7.38million total, including up to £4.8million long-term incentive plan, salary of £1.2million, £420,000 in pension contributions and his bonus which was worth £963,000 when issued last week but was expected to top £1million as RBS shares rise in value;
2013: RBS have set aside £3.3million of shares for his bonus next year. The exact size will be decided this time next year.

What do rats smell like? Sweeter than the Royal Bank of Scotland I suspect.