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Daniels sacrifices bonus

Robert Peston | 07:38 UK time, Wednesday, 11 February 2009

Eric Daniels, the chief executive of Lloyds Banking Group, will make a personal statement today to MPs on the Treasury Select Committee that he won't be taking his bonus for 2008.

Lloyds TSB chief executive Eric Daniels Thursday September 18, 2008 John Stillwell/PA WireYou may feel that's a "dog bites man" kind of story. Surely no senior executive of a bank would dare take a bonus in the current climate?

And in the case of Lloyds Banking Group, it would be doubly controversial for Mr Daniels to receive a so-called payment for success, in that its share price has tumbled (along with that of all banks) and taxpayers have taken a stake of 43% in the group.

But until just a day or two ago, Lloyds was insisting that the board was still planning to pay bonuses to its executives directors, because (it said) the group had performed better than its peers.

It did make one concession to the growing climate of hostility towards bonuses for bankers.

When Lloyds received an injection of funds from taxpayers in October to shore it up, Lloyds did say that all bonuses for executive directors would be payable in shares.

So how much is Mr Daniels giving up?

Well, he's entitled to receive up to 225% of his basic salary of just over £1m (which rose 7.8% last year).

In other words, the bonus could have been more than £2m.

But to be clear, his statement to MPs will be a personal one - it does not represent policy by the board of Lloyds Banking Group.

Or, to put it another way, Lloyds' non-executive directors are yet to decide whether the five other executive directors on the board should receive their bonus entitlements of up to £6m in total.

They, however, will today be assuming that their bonuses are also dead and buried, because it's difficult to see how they could take the reward if their leader is refusing the icing on his cake.


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  • Comment number 1.

    He should give-up his past bonuses too.

  • Comment number 2.

    Let's go even further, lets establish when they knew they were doing what they were doing and take back all of the money they have filleted away.

  • Comment number 3.

    Also Robert will you ask some of your contacts about the depth of the so-called investigation New Labour have set up? Can you find out whether there is any plan to bring forward a criminal investigation into what has gone on?

  • Comment number 4.

    Mr Daniels and his board saying that they performed better than their peers is a bit like a train company saying that although they had a train wreck they didn't kill as many people as another train company who also has a wreck and therefore their safety is better

    These fools need to understand that the idea is not to have a train wreck which they have had the banking equivalent of.

  • Comment number 5.

    Watching a little of the 'I'm sorry' act yesterday, I really, really wished I had a quiver of Thunderbolts by my side.

    My conscience would have been clear, I would have said sorry afterwards !

    The Banking apologists , the lets move on Brigade, really are missing the point.

    These men were not appropriate or competent to be in charge of a Retail Bank.

    The call to repay bonuses may sound vengeful, but the profits these people represented to their Public Shareholders were fabricated on paper !

    Thusly their bonuses were based on creative accounting.

    It would not be unjust for a Court of Law to require them to repay their bonuses from the biggining of their times in Office at the Banks.

    This is based on the assumption that their methods of Creative Accounting have been employed since they took Office.

  • Comment number 6.

    Drop.....ocean......are words that come to mind.

    Also, one cant help being sceptical that this is the 'headline' but there is probably some other arrangement where he gets it all back .

    How about all those bonus paymentsfrom RBS due to ABN staff being scrapped. Surely there cant be a genuine argument to pay 'contracted' payments when the institution is in such a financial state.


  • Comment number 7.

    #3 ...... Oh, Doctor, you did make me laugh with that one.

    Surely you meant the shallowness, not the depth of the investigation ? ?

    And how can there be a criminal investigation into people who are responsible for formulating, and therefore themselves above the reach of, the law ? ?

  • Comment number 8.

    Yawn.... There's more out there in the business world other than banks.

    A one trick pony....And he's not very good at that one trick either.

  • Comment number 9.

    I wish people would target their attacks on bonuses a bit more clearly. My girlfriend works on the till for a high street bank and is in line for a very modest bonus. All this anti-bonus publicity will only make the banks stop paying out to the minions!

  • Comment number 10.

    perhaps he will also explain why on earth did he roll over and let the government force him to takeover HBOS? Directors are legally bound to act in the best interests of the shareholders......this one act has brought Lloyds to its knees!

  • Comment number 11.

    The government is hugely compromised in all this. We still have to rely on voluntary 'giving up' of bonuses, rather than the nationalised institutions having some clout to just say no. Having James Crosby as initially a government consultant and then the deputy head at FSA is just ridiculous given the context of 'grillings' etc.

    Problem is that the other government lot dont look like they are any better prepared to do anything constructive.

  • Comment number 12.

    Please note as a Shareholder and now Ex Shareholder (of a Nationalised Bank), I for one feel little sympathy for people who claim to be successful businessmen, but who run into the ground businesses that should have been a walk in the park to run for anyone with an ounce of common sense.

    The basic Salaries of Bank Directors are far higher than the actual work they do requires.

    Indeed, it is hard to see how they justify any of their Staff receiving over 30 000 a year.

    Their whole pay structure and Jobs for the boys, market place, is fabricated to over reward people, who on the whole contribute next to nothing to the Bank that employs them.

    Why pay a Stock Analyst over 100 000 a year ?

    They didn't see the Market crash coming !

    Wasted money, many Armchair Investors have more intuition and common sense with investing than these over paid city types !

    These People truly are overpaid and overvalued !

    This Banking Crisis has brought home the economic irrelevance of the whole Financial Services Industry.

    Grumble, grumble, now wheres my thunderbolts ?

  • Comment number 13.

    Why do you suggest that ? Lloyds TSB has proven to be a profitable Bank. Would not have need any government funding whatsoever had it not been pressured into taking over HBOS by our mate Gordon.

    There's very limited exposure to overseas debt problems.

    What's your beef ?

  • Comment number 14.

    It is absolutely unacceptable that 'bankers' still believe they are not responsible for the chaos the world's financial system has fallen into.

    As someone who has seen his pensions wiped out by the greed, incompetence and lack of professional rigor by 'bankers', not only should this group not receive bonuses, but I believe there is a case to be answered for criminal negligence as the managers responsible for conducting their businesses.

    The government shares full responsibility for this crises and if they do not pursue and prosecute those responsible in the banking industry for this catastrophic situation, they deserve to be thrown out at the next election.

  • Comment number 15.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 16.

    Good grief !

    The deskilling process and dumbing down process has reached me.

    I have lost the ability to spell beginning !!!!!!

    I blame the Gov't.

    The Banks are a good example of the end result of deskilling the Craftsman and then employing lots of Academics with Degrees in Art History and Media Studies.

    Lots of young Salesmen who don't understand the products they are pushing on their Customers.

  • Comment number 17.

    A 225% performance-related component, lovely. Most people who even have such a thing could only get 5-15%. What does this incentivise again?

  • Comment number 18.

    I may be wrong but I thought LLoyds were doing okay before being cajoled by this lame government into buying HBOS.

  • Comment number 19.

    In 2003 I was going around telling everyone who would listen that this crash was coming.

    I repeated my message in 2006. In Jan 2007 I was convinced it was right on the doorstep so I sold my only two Buy-To-Lets, at a decent profit.

    Literally days after the second sold and the money hit my account the Northern Rock thing kicked off.

    I am an artist and a writer. I have never been to college and don't have a university degree.

    So how come I spotted what was blatantly obvious and yet these million-pound fools couldn't?

    I'll tell you why, they ALL looked the other way - in the direction of those ridiculous, immoral and, it has subsequently been proved, disastrous bonuses.

  • Comment number 20.

    Oh, and where's my bonus for spotting the things these people couldn't, or wouldn't?

    Perhaps Gordo would like to employ me as a consultant. I understand the monthly pay is several times more than I earn in a year.

  • Comment number 21.


    Who on the other side of the negotiating table agrees to these crazy percentages.

    Also, did I hear right on 5 live this morning, that he was due this not because of the performance of Lloyds but because they had performed better than the other banks?


  • Comment number 22.

    This is simple, let them have their bonuses, but remove the public funding, by say 10 percent for every bonus paid, lets see how many more bonuses are paid.
    What the bankers did was very close to being criminal but i bet they dont get jailed for it.
    Theusual UK politics, one rule for them another for us.
    When are the UK public going to stand up and be counted, lets sort these robbers out and the rest of them whilst we are at it and turn the Uk into a Great Country again.

  • Comment number 23.

    @ 18

    You are wrong. So were they.

  • Comment number 24.

    Why do we have the FSA?
    Who regulates them?
    Who pays them?
    What are they suposed to do?
    How do we find out how many instituations have been brought to bear?
    Do they have any power?

  • Comment number 25.

    Nothing on Paul Moore and Sir James Crosby yet Robert. Too close to home ???

  • Comment number 26.

    Bonus ? Based on the evidence of yesterday, some of his colleagues formerly of HBOS will be pleased to avoid jail, since they evidently ploughed on - including making a rights issue eventually - having been told by their risk manager they were facing deep trouble.

    Although it was in a different jurisdiction - the USA - Jeff Skilling went down for 24 years for making misleading statements about the financial health of Enron.

  • Comment number 27.

    So how will Mr Daniels be incentivised to get Lloyds making money again? Hopefully some non-monetary incentives might kick in...

  • Comment number 28.

    Ignore the red herring of bonuses.

    Let us see some litigation.

    Ignoring and sacking a compliance officer?

    The shareholders should have a case.

  • Comment number 29.

    I forgot to add

    Forty percent rise for the Public Sector !

    Lets put them back (on relative terms) to where they were in the 1960's !

    And it would boost the Private economy, every Pound would be spent and circulated many many times in the Private sector !

    And a couple of Hundred Million Pounds on the Public Sector wage Bill, is far far less than the Hundreds of Billions going down the Toilet bailing out the Banks.

    Oh and I would like to say, if anything I have written on Mr Pestons Blog has upset anyone, that

    I'm sorry, really really sorry !

    Ha ha ha.

  • Comment number 30.

    yesterday the top chiefs of RBS admitted they paid too much for ABN. These are basic of valuation errors taught in any finance or MBA degree. We have too many corporate chiefs running financial services companies without formal qualifications. Another disaster waiting to happen is to have John Varley who is a SOLICITOR by training continue to run Barclays. Barclays will soon turn into a titanic ship like RBS and we will be asking ourselves the same questions : how did we allow these fat cats with no business or finance qualifications to run our banks into the ground.

    It just doesn't work. Who in their right mind allows a solicitor to do brain surgery? But we allow these unqualified people to run out largest banks??

  • Comment number 31.

    Please stop posting here, everyone. It is clear that the BBC is part of the conspiracy, my serious reviewed posts were structured to bring out whether that was the case or not. They fell into the trap, the extensions of yesterday's Committee presentation are being suppressed.

  • Comment number 32.

    No bonuses bigger than actual annual wage. The reason for these 200/300% plus bonuses is that it allows those in senior positions to hide their real remuneration from public scrutiny. They do this because they know there is no moral case for having a pay packet that would in affect be 200/300% bigger than it seems. So they know they're being overpaid they simply hide the fact the best way they can.

  • Comment number 33.


    Has anyone asked whether the bankers 'not taking their bonuses for 2007/2008' are simply going to 'defer payment' until banks show profits at some future point in time?

    In other words, will they truthfully forego their bonuses for these loss making years, now and forever?

    Recompense and reparation:

    Nick Leeson - prison sentence served
    Enron execs - imprisoned
    Enron settlements - billions of dollars by US Investment Banks Q4 2008
    Jerome Kerviel - currently under prosecution

    Andy Hornby - free
    Sir Fred Goodwin - free
    Lord Stevenson - free
    Sir Tom - free

    Message for the global financial world - feel free to work in London, with complete impunity with no professional or personal liabilities.

  • Comment number 34.

    21: They do their negotiating with a mirror.

    Bank director (to mirror) I say old boy how much extra pay do you need this year ?

    Replies to self: Well the Shareholders won't say anything, I knew them at Oxford, and I really really fancy that new Yacht...

    Bank Director (to mirror) well that'll be two million this year with stock options of another twenty million in five years.....

    Replies to self: Oh, but I wanted more !

  • Comment number 35.

    Someone spotted this was going to happen 4 years ago at least.
    Impress me by giving back all the bonuses received during that period.

  • Comment number 36.

    instead of letting the bank keep the forsaken two million pounds they could distribute a couple of grand to a thousand old age pensioners as a sign of good faith or they could reimburse their customers that paid excessive interest and fines for debts on credit cards they issued and now want to obtain charging orders to force them into bankruptcy and then remove them form their homes
    (good game - good game)

  • Comment number 37.

    I believe that what struck me about the bankers yesterday was they didnt seem that intelligent, I would like a maths test to be given to everybody from 18 to 65 and see exactly who would really be suitable for these types of jobs,where, plainly the maths doesnt add up.the lloyds bonus refusal is a smoke screen, im sure the guys not short of a few quid.

  • Comment number 38.

    The FSA was Gordon Brown and Tony Blair's pet project

    The Economy was Gordon Brown's responsibility

    The FSA was Gordon Brown's responsibility

    The Bank of England was Gordon Brown's responsibility

    The Banks were the BOE and the FSA's responsibility

    The Banks have failed

    The Economy has failed

    The FSA has failed

    Gordon Brown has failed the country.

  • Comment number 39.

    It's a good game this, isn't it? 'Let's all blame the bankers!'. Rather typical of the BBC to play the Emperor's New Clothes too! It is clear to many of us that the government is not without sin here. Brown has presided over this debacle - why hasn't HE apologised too? Why aren't the BBC asking for his apologies? I expect that the Beeb is too riddled with Labourites to want to bite the hand that feeds.

  • Comment number 40.

    As one of the 2,300 to go at RBS this morning, I just wondered, apropos all the self-righteous nonsense talked about bonuses, whether it would be all right with the Great British Public if I were allowed to be paid my redundancy money ?

    Now you've had your pound of flesh, I suggest the professional indignates take their hatred elsewhere. The ill thought out and incontinent views I've seen spouted on these sites have been nothing short of a disgrace.

    You ought to be ashamed of yourselves.

  • Comment number 41.

    #38 perfectly put, i think you speak for a large amount of people.

  • Comment number 42.

    All this talk of bonus-my head spins at the figures.Scrap bonus,introduce performance related pay scales I say.While we're on about fat cats-why don't we take a look at the utility companies happily guzzling on our thirst for energy.They are probably laughing their socks off at the distractions UKplc has with the banks.Talk about soft regulation-about time they appeared before parliamentary select committee(mindst you-would they show their teeth ? ).Millions face fuel poverty because of astronomical rises(oil off the peaks months ago) and yet they are oh so slow to reduce prices during these cold times-am I just too cynical or is winter the time they bank the bucks ? Perhaps a few percentage points reduction as we enter the summer time-surely not."that'll placate the regulator and everybody else" I hear them cry ! Nice cosy safe haven mmmm Welcome to R.I.P. off Britain.

  • Comment number 43.

    Why the government forced lloyds to takeover HBOS

    HBOS is one of the UK's biggest PFI players, they own billions of pounds worth of PFI debt. No problem there? AAA rated government debt at very good interest rates- the only problem is that if the government had nationalised HBOS it would have become effectively debtor and creditor. PFI is not accounted for as official government borrowing, and is accounted for as 'off balance sheet' borrowing. Now we all know that you cant owe yourself money, so they would have had to take all those billions of pounds of PFI debt back on to the official government borrowing figures!

  • Comment number 44.

    They should be facing charges for criminal negligence and possible jail sentences. They clearly don't give a damn and would do it again if the chance arose.

  • Comment number 45.

    Guys, we should all be reasonable. In light of the fact that all banks have been very reluctant to give up their bonuses, we should give credit to an individual who is demonstrating a sense of contrition. Blame is attached to everyone, from government down to individual borrowers who have borrowed recklessly. The system has been unsustainable but unless you were campaigning against it while the times were good you shouldn't feel any particular right to protest now.

  • Comment number 46.

    As 37 year ex employee of Bank of Scotland I watched the apologies in complete dismay.They had no control over their respective banks and worse no Non Executive Directors to stand up to the board of each bank. Eric Daniels should have been there to answer for Lloyds TSB
    What is the way forward, bonuses are not the real issue:
    Why is the FSA not being held to account
    Why is Bank of England not in the dock
    They are the governing bodies (sic joke) who control banks. Where were they? They should have been fined for not doing their job with the money re-invested in the failing banks with a minimal rate of interest
    FSA should pay and appoint a non exective to each banking board NOW and not jobs for the 'boys'

  • Comment number 47.

    30 exbanker007:

    This happens because of the 'cult of the manager' that has been thrust upon us by management theorists/gurus predominently from the US. They establised the idea in the wider business community that a manager only needs to know about 'management', and by that they meant 'soft skills' eg: talk talk talk. This allowed a whole generation of managers to be parachuted into companies who did not have any knowledge of the companies they were about to run. This cult of the manager traded on the notion that these 'new managers' were somehow 'charismatic' that they had 'natural' people skills that allowed them to make an organisation profitable.

    This idea has undermined many companies that have become victims of this trend. Companies have often been run by people who are ignorant of the 'things' that are produced by their companies, consequently they make bad decisions which have a real impact on the future surival of these companies.

    The situation is different in many small and medium sized companies where the best of the UK management class reside. Here managers generally have to know their markets, their products and their people . Thay do not have the luxury of thinking they can get by without 'needing to know' the details of their daily operations.

  • Comment number 48.

    While I am struggling to convince my bosses to keep me on, while I get the miniscule fraction of Mr Daniels's basic sallary I will bear in mind he has volunteered to give up his bonus.
    What a guy!

  • Comment number 49.

    #13 could not agree more it was Crash who forced LLoyds into taking on HBOS on behalf of the nation. Daniels is one of the good guys being tarred along side the others.

    I think we have something much more interesting to debate than bonusses and who said sorry the best.

    Lets give some space to Moore vs Crosby

  • Comment number 50.

    What is to stop Gordon Brown from bringing in a 99% tax rate for all bonus recipients? These people were trousering enormous sums of money in the boom times. These are desperate times and call for draconian measures to prevent these self-serving miscreants from getting away with more largesse, when the ordinary taxpayers who fund them struggle for their very livelihoods.

  • Comment number 51.

    The great sacrifice!

    So he will be enjoy a gift of shares instead of cash. Nice one. Is that now to become the window dressing norm throughout the industry?

    As the current Lloyds TSB price is around £1.00, presumably that means Daniels will collect around 2 million shares. When the share price recovers, as it surely will, how much will he then benefit? Notwithstanding that finding a 'legal' window to exercise ones share options is not always easy for a director, I am sure that will be a mere technicality around which he and his cosy club cronies will easily manoeuvre.

    As they are clearly totally incapable of exercising any self discipline or reasonable discretion of their own volition, the only way these disgusting people will be brought to boot is for the Government to legislate for a shifting of goal posts to curb their greed and avarice.

  • Comment number 52.

    While Rome burns!!!!!!!!!!!!

    Stop muddying the extent of the issues this world is facing over these damn bonuses.

    The banking system is going to collapse, its a mathematical cert' and there is absolutely nothing that can be done (or has been done) to stop it.

    What we need to be doing is examining the consequences of this inpending event and finding solutions to prevent a world war and/or mass starvation.

  • Comment number 53.

    I'd like to say something radical.

    The issue with the city is that it is a Casino being played with our (largely) pension money as a float.

    We need to take our float away from the 'players' and then let them gamble with only their own money.

    Unfortunately the govt is in cahoots with the city fats cats by making it difficult for the ordinary worker to get tax relief on his 'non city based' investements.

    Remove the pension funds from this game - show them the abyss.

  • Comment number 54.

    40. At 08:43am on 11 Feb 2009, Hoddsr wrote:

    "As one of the 2,300 to go at RBS this morning..

    .. Now you've had your pound of flesh, I suggest the professional indignates take their hatred elsewhere.."
    don't blame blogs
    blame the banks
    they will use you
    didn't you know

  • Comment number 55.

    Hodsr 40:

    We are not to blame.

  • Comment number 56.

    I thought the goverment wanted bankers to give up their cash bonuses and accept shair bonuses instead...

    So the bunus he is giving up is the type the goverment waht their bankers to take......

  • Comment number 57.

    At their present, potentially low levels, offering bankers shares instead of cash may be a pretty good deal in the longer term. That too seems unfair.

    May I suggest that bankers receive as a bonus a five year option to purchase shares at the same level their share price was at before the recent credit crunch set in.

    That will also induce a future performance that rewards the taxpayers who are currently saving their business.

  • Comment number 58.

    Phew! Am I glad these banking bosses came out altruistically to say they were sorry...but hey, shit happens! The problem is, the effects of this shit is not going to affect them, for they are always on the left side of the following statement...'privatise the profit, socialise the loss'; whereas their victims (oops sorry, I mean customers) are always on the right side of it.

    Is the public actually aware of the damage their negligence has caused. Do they think this recession (cum depression) is a natural catastrophe? That the tsunamis of jobs losses, home repossesssions, loss of savings, are acts of God?

    Let me spell it out intuitively, this is a causation from corruption on a unprecedented scale. It was a gamble, a over-reaching of slobbering greed that went wrong. Yet, they believe themselves to still be on a taxpayer's expense. I think not!

    Sorry does not cut it. It doesn't becalm my rage and fury...I want a pound of banker's flesh served on a silver writ of prosecution. The only bonus I want to hear about is the clanging of jail doors and the chinking of the keys as they are thrown away. The only mansions these sods should be domiciled in should be those with prison names.

    When that happens, then, and only then, will I trust in banks again; will I trust in government again. By the way, when is the next election...we have people to sack and boot out of jobs?

  • Comment number 59.

    Actually, I thought Lloyds was in pretty good shape until they were lumbered with HBOS. So I don't rate Daniels as one of the biggest villains.

    There is however, the bigger issue that city bonuses have clearly been very wrong for a very long time. So it is right that Lloyds give up their bonuses in that context.

    What is really important though, is how the Bankers go about remunerating themselves in future. Their expectations need to be brought down to earth. They need to remember that they are earning profits for their customers with endowment mortgages and their shareholders. not lining their own pockets....

  • Comment number 60.

    Forget the bonuses - the majority of these bankers should be in jail.

    Have a look at the link. It gets interesting at about 2 min in. Basically the politician is telling the interviewer that back on one day last Sept there was an electronic run on the US system by world wide investors. The American system was within a few hours of total collapse and would have been in ruin that same afternoon - the the entire world would have followed within 24 hrs.

    This is what the bankers - along with regulators and Govts - had led us to.

  • Comment number 61.

    Call that an investigation! More like a dance round the mulberry bush. We need an independent investigation with questions of content leading too results for a safer banking system. That looked like a staged show to try and convince the public that government can keep the banks in line, when in fact its just the opposite. It can not be that bankers go through as "the untouchables" doing as they like.

  • Comment number 62.

    If Daniels is foregoing his bonus it would suggest that the organisation delivered its performance targets in 2008. Now that would be interesting and to some, no doubt still damning.

    Once again the comments of a number of contributors whipped into a frenzy by lurid headlines who decry anything to do with banking. It happens whenever any thing goes wrong witth any profession, whether its child care, the police, builders - every time the press go Baa baa baa and the rest of the sheep follow. Headlines full of pontification that they knew better and work up another story to produce copy and justify their position.

    The only reason HBOS exist at all are that Lloydstsb stepped in G Brown said that himself.

    Was that an act of generosity or not , it is not known, but now thanks to the issue at HBOS the whole organisation constantly get tarred with the 43% tag, which is so patently unfair.

    Unfortunately having done the rescue and taken on the responsibility for sorting the problems out yet the press are having a great time lumping them with the other dogs - the Scottish ones who sadly got it all wrong.

    Once again this story becomes a deflector from the major reason we are in this situation at all. No need to name and shame him and them even their previous leadership was smart enough to leave before their bubble burst and set off miles away and be out of sight whilst the flak is flying around especially with a sacrificial lamb in the headlines.

    Bring him back and ask him to why it all went wrong and the spin will go further than a scane of yarn.

    Where is the real interrogation of the politicians as to their failures in office.

  • Comment number 63.

    The Govt is doing a grand job of deflecting blame by exposing the bankers to such criticism. They're quite happy to drop the lot of them in the mire at the first sign of trouble, but don't forget that these were all Gordon's best mates and could do no wrong not that long ago.

    From what I understand, and correct me if I'm wrong, but I thought Lloyds weren't actually in bad shape until the merger with HBOS - which I also understand wasn't entirely Lloyds' idea.

    Had the merger not happened, Lloyds would probably be in much better shape, so it seems a little harsh to single out Mr Daniels' bonus plans in particular.

    Whilst I'm at it, whilst the men at the top are waiving their bonuses, they were only the men who rubber-stamped the plans. The men who came up with the crazy ideas and took the risks are by and large still employed and in many cases still receiving bonuses.

  • Comment number 64.


    "Now we all know that you cant owe yourself money, so they would have had to take all those billions of pounds of PFI debt back on to the official government borrowing figures!"

    Thas one big reasion why they will never be nationalized......

    After all its "prudent" to pay PFI 10-20% interest when the govenment can borrow at 1-2%...... It must be so as of the last 12 years ALL capital expenditure by this goverment has been on PFI.

    I know of one Combined heat and power project on a goverment site that will cost 1million to install, and within 8months will have totally paid for its self reducing the sites power and heating bills by 1.5million a year.

    The manager of the site wants to borrow the 1million from the savings in the site running cost to be repaid in 8months. But needed treasuray permission as the site would be peanalized in the follwing years budget by half a million in addition to the costs. The treasurey came back and told his it could only go ahead if it was PFI.

    The BEST PFI quote was instalation and setup costs 2million (the company doing the installation had quoted 1million to the manager for the work) paid at 12% over 20 years, anual managerment costs of half a million plus fuel.

    The project hasn't gone ahead as the manager is waitiong for the next goverment to see sence! As the PFI deal reduces savinge to approx 5-600k per year and not 500k first year and 1.5million every following year.

    Gordan loves PFI as its off books hence he is happy to use it at any cost!

  • Comment number 65.

    This is more like the attitude these directors should be showing.

    You have to feel some sympathy for Daniels and Lloyds - we don't know the extent to which Lloyds would have needed govt funds, if at all pre HBOS takeover.

    10 Jolo13 is right. He agreed to take-on HBOS. He could have said no. It was obvious that it would impact Lloyds'. Let's hope Eric took the decision for the long term good of British banking and thus his long term career and remuneration. We wouldn't want the govt to be forcing the hand of the free market would we?

    The reward situation around Lloyds is a lot cloudier than RBS but good to see Eric setting a good example - otherwise we might as well all blame the economy for our poor performance and award ourselves bonuses.

  • Comment number 66.

    Giving up a bonus when you're salary, and bonuses, have been extremely high for several years means nothing.

    Especially if you have several other 'jobs' and piles of cash in the bank.

    And, given that these men all do have piles of cash around (you will NEVER convince me they haven't) they aren't exactly going to go hungry are they. After all, think of all the really cheap property they can now buy with that cash. All they have to do is buy up a few streets, rent them to the people they've caused to be thrown out of their own homes, and wait for values to rise again while collecting the rent.

    Making money is easy when you already have it.

  • Comment number 67.

    I'm sorry but am I missing something here? I have been labouring under the misapprehension that bonuses had to be earned! By helping to bring the Country to its knees does not qualify in my opinion!
    The word 'bonus' should be expunged from banking language for the next decade.

  • Comment number 68.

    May be the whistle blower former exec who was sacked for hinting at problems should be put in charge of the whole investigation, he will have I am sure exact examples and will be able to ask specific questions, thus enabling may be criminal proceedings

  • Comment number 69.

    Am I the only one who thinks that our money would have been better spent on infrastructure projects, a people's bank, investing in manufacturing, schools, hospitals and other long term capital projects.

    We've been sold this story that the banks 'can't be allowed to fail'.

    I fully realise that the world of finance is a devilishly complex thing, but why foot this bill. Why not let them crash and buy them in a fire sale for next to nothing. Re-employ the ground staff (sack the suits) and run the bank for the all the people, not for five or six people.

    It's all sounding dangerously like capitalism has failed us all, again, doesn't it?

  • Comment number 70.

    This bonus thing is going to run and run.

    Bankers were only part of the problem, but all the time you concentrate on them, we are missing the bigger picture.

    Move on Robert.

    I thought you were worth more.

  • Comment number 71.

    On bonuses and the testimony yesterday at the select committee by the former bankers was frankly insulting: they are trying to get us to believe that they have no idea about how a speculative bubble develops and hence no idea about economic indicators commonly used to identify bubbles and the economic cycle in general. But they were running banks, hmmmm...... or better still, they are implying the specialists they employ to monitor these indicators somehow had no idea, hence could not warn their bosses?!? The fired risk manager who did warn then clearly blows a hole in that feable attempt to dodge responsibility. It is interesting to consider just one indicator, UK house prices, which went up at an alarming rate and then hit a plateau a few years back, an indicator maybe? Or what about the accepted indicator that crazy takeovers, like of ABN-Amro, come at the top of a market?

    So bonuses, well, if you ask me, and probably a lot of other people, these bankers should feel fortunate they are not doing community service sweeping the street, which is what they should be doing. We now know what RBS stands for: "Ruined Bank of Scotland". President Obama has recently cited a town in Indiana where "food banks" are now the most popular form of "banking". The RBS-style bankers simply have to eat a little less now, while some people have to worry about eating at all.

  • Comment number 72.

    I've just watched John Prescott pontificating about the greed of the bankers. This from the man who milked the system for all he could get while he was in government. Now all of a sudden he's the guardian of the banker's morality code, talk about pot calling kettle black, he is as immoral as the bankers he criticises.

  • Comment number 73.


    "Forty percent rise for the Public Sector !

    Lets put them back (on relative terms) to where they were in the 1960's !"

    But how can my local council survive with out its "street football coordinator", its "lesbion awarness officer", its "race attack coordinator", or even its "Public Affairs Manager".

    And what will happen with the Gardains massive weekly public sector jobs suplement. The sacked workers might have to apply for one of the 2000 low paid jobs in europe advertised at the job centres!

  • Comment number 74.

    on the positive side
    the banking system has not imploded or exploded yet

    lets have some clarification
    how big are the future problems and what are they
    e.g. FX, derivatives, debt, defaults, businesses at risk, unemployment

    it seems we swapped all our real money for funny money assets and the market bombed
    and then the experts panicked and borrowed more money to buy more funny money assets in order to recover their losses

  • Comment number 75.

    Mr Peston

    Maybe we can move on to the REAL big story of yesterday and today, the former risk manager of HBoS's allegations that he was sacked and gagged about HBoS's risk controls by no one else than a very important adviser to Brown and the vice-chariman FSA?

    Anyway, the bbc site is already on the case, containing an explosive statment from the former HBoS risk guy. He seems very well organised and knowledgeable, someone too big to take on by the current FSA vice-chairman.

    Interesting times we live in.


    PS1 Ridiculous that the FSA can now look at this case with the former HBoS CEO as vice-chairman

    PS2 Wanles who advised on NHS funding was on Northern Rock's board - interesting to see the credentials of Brown's advisers

    PS3 I still have never voted conservatives, never been a member of that party, never consulted them, living abroad, non-uk passport holder, never ever been member of a political party - just for clarity!

  • Comment number 76.

    Well lets hope the other directors follow his lead.

    May be then the staff at my local branch of Lloyds TSB can have a small bonus.

    With regard to the 2,300 staff at RBS due to be "made redundant" if their board did the same I am sure that their posts could probably be saved too.

    This would be much better than Crash's recently announced job creation moves and only cost the bonus payments.

  • Comment number 77.

    Dear Robert
    When you read the SUN it clearly defines the status of Bankers in this country and for that matter the world. American Bankers how ever top the unpopularity scales as being dis honourable and Fraudsters.
    How ever having Read The SUN'S editorial it lays the facts on the table,
    But still these " Vultures and Scum bags," unquote --- fail to accept responsiblity.
    One thing is abundentley clear, Bankers have been villified, BUT, the architechs within the treasury who have been ingored AT the moment, are their along side the bankers , and i have know doubt now that the way in which these men have been Villified, behind the scenes there are a few politicians being weeded out for Public execution also.
    One whistle Blower is out there will be others .

  • Comment number 78.

    Nick Leasion? brought down Barings bank and went to jail?

    Was exactly was he charged for?

    Surley bundaling up poor investements and re branding the AAA rated and then selling off the income part first so that you get an imediate paper proffit is fraud?

    Espeaclly as this profit is than used to pay / justify your bonus?

    And it deal also leaves the bank holding an fixed asset for 25years against which they can borrow?

    Can some one please tell me how and why this is not being investigated and why its not as bad as what Nick Leasion did to bring down Barrings

  • Comment number 79.

    Thinking about the HBoS saga, maybe it was Mr Crosby who advised Brown to tell Mr Blank, chairman of Lloyds, he should merge Lloyds with HBoS.

    Now, that would make for interesting questions under oath!!

  • Comment number 80.

    I'm curious about the role of the non exec directors. This seems to me to be another jobs for the boys arrangement, money for doing very little. How can someone be a non exec director on several boards of diverse companies and have the time and knowledge to have a full grasp of the business of each?
    Maybe they are waking up to their responsibilities at Lloyds (or not). Who decides their renumeration packages?

  • Comment number 81.

    To No 12

    I was made redundant from HBOS recently. I was a junior, did all I was asked, 'earned' a small bonus each year to go with my very small salary, and I totally agree that nobody there should earn over £30,000. My old boss was sitting pretty on over £65,000 and a big bonus. People like him had no guts and dared not speak up to their bosses. Sure the Boards are ultimately to blame, but management below them are to blame just as much.

    Knighthoods - stripped!
    FSA - pointless!
    Brown - useless!
    Personal overdraft fee refunds - we all know we'll never see them again!!

  • Comment number 82.

    They should all be stripped of their Knighthood's, tried in Court and fined the Sum of ALL their Bonuses, and Golden Hand - Shake's over the Year's, and then given a long Prison Sentence just like in ALL over walk's of life, and when they are released from Prison they can join the Dole queue along with the many that they have caused to lose their Job's.

  • Comment number 83.

    Off with their heads !
    Off with their heads !
    Come shouts from the public gallery
    Demonstrators and MP’s
    As former bank bosses are led
    Into a ‘live’ Court of Evidence
    Before the Treasury Select Committee
    Billed to be grilled
    Over their mistakes and bank losses
    Recklessly risky deals - why oh why ?
    Gambling stakes so high
    Rambling apologies to be said
    Guilty for stealing bonus-filled tarts
    Now force-fed humble pie
    But it’s all too late
    To call the debate
    On what went wrong
    The credit crunch won’t wait
    Its bite is strong

  • Comment number 84.

    Senior bankers (I wonder who gave them knighthoods?) have made mistakes big time that must rank alongside selling the nation's gold reserves at the wrong time in the market. They did at least say sorry.

  • Comment number 85.

    This continued focus on bonuses is just a smokescreen.

    There are much bigger issues starting to float to the surface.

    You quipped yesterday that, under questioning by the Treasury Select Committe, the failed bankers did not seem to understand why their banks had failed.

    Just a bit of a larf, hey?

    Well, no, this smacks of negligence. This is a serious charge against a director of a company.

    When are these guys going to stand up in court in front of some professional advocates?

    The kangaroo court of yestaerday was just a joke.

  • Comment number 86.

    Overpayment and bonuses of those at the top has been endemic in UK industry for many years now. It's not just the banks. The reason always given has been "if you want the best person for the job, you have to pay going rate". The result: you just get the greediest. Their goal: large rewards in the short term and power, with little interest in the longer-term health of the business. My own experience shows that in the good times, the men at the top took pay rises in double figures while those who created the wealth were given 2-3% or nothing. The profits were spent on acquisitions. The share price hardly moved.

    If and when they get around to shaking out the management in Banking, the new regulations should apply to all industries.

  • Comment number 87.

    The NuLabor Spin machine is in overdrive offloading Jimmy Brown's sambolic economic policy onto the Bankers. The BBC have been pushing this story endlessley now for weeks instead on focusing on Government mistakes. I wonder why? We know already the Bankers were fools!!

    Also, we known that everything that NuLabor has touched over the last decade has been polluted by incompetance, unecessary bureaucracy, lies and a desire to blame everyone else. I bet the Lloyds boss wish he had never agreed to help them now they are spinning against him because its politically convenient for them to do so. So easily jettisioned now he has been used and abused. More fool him.

  • Comment number 88.

    #40 I am sorry for your situation,its bad when people lose jobs, the bonus thing is a smokescreen for brown and company i agree.Also i notice the jobs for brits thing has blown up again.This is where brown can be nailed, he wont like this reaction.I run a small electronics company ,anybody with electronic design and maths skills are welcome .british or euro or anybody.

  • Comment number 89.

    Are the tax payers who are complaining about banking bosses bonuses the same taxpayers who applauded the errecting of the Angel Of The North, and now, possibly, The White Horse Of The South?

    If anything lit the path of financial madness that this country was walking, it must have been public spending projects like these.

    Perhaps you know a few more of the same ilk.

  • Comment number 90.

    This is my take....

    The strain on Lloyds and its calapsing share price appeared to be brought on by the shotgun marriage with HBOS that all happened in a spin.

    I remember journo's saying how Lloyds had bucked the trend and been more conservative with its lending running upto this and that the board at Llyods was feeling rather smug.

    So Mr Daniels is more deserving of bonuses than other Chief execs but the one thing that made me nearly choke, was learning that Andy Hornby (ex cheif exec of bankrupted HBOS) is now being paid 60 grand a month to advise Lloyds!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    What the hell is that about!!

    Andy Hornby I depise you but you do know how to negotiate, that is for sure.

    If Lloyds had not bought into HBOS would Mr Daniels be giving up his bonus? At the time Lloyds averted national disaster for HMG so I like the way he is taking the high moral ground again.

    Mr Daniels for PM you heard it here first.

    Andy Hornby the new Peter Mandelson??

  • Comment number 91.

    Message 77 freecornwall

    Do you really have to sully these columns with references to the Murdock press? I have no doubt that when all was going well certain newspaper staff and their owners had their noses deep in the trough as well.

    I do agree however that it is quite apparent that there has been a concert party going on between the City, The Treasury and the regulators. Anyone who questioned what was going on was ignored if they were lucky, or abused and sacked if they were not.

    We need to identify all, and I mean all, of the parties involved, investigate them for negligence or criminality or both. The guilty parties must then be at least fined the full extent of their entire wealth and income since 2003.

    I think such a punsihment will do more to encourage the others than Mr. Cable's guillotine although one can sympathise with his anger.

  • Comment number 92.

    Bankers do not create wealth - at best they act as facilitators: at worst as looters and destroyers. They should not be paid considerably less than those really create wealth. The worldwide financial market system must be curbed and simplified. Then proper effort can be put into the "real" economy.

    Paul Moore should be made the head of the FSA asap, with wide-ranging powers to reform and to disbar people from employmnet in the industry.

    Still sticking in my mind from yesterday are the arrogant delusions of adequacy of these bankers. Allegedly, "Sir" Fred said if bankers felt they were not paid enough, they would leave. Who would want him? If he and his ilk had not existed over the last 20 years, would the world be a worse place? The only one of the four with any real skills was McKillop - and he should have stuck to pharmaceuticals.

    Also discredited is the honours system. This too is an expensive waste of time and money: we can no longer afford it.

  • Comment number 93.

    #79 Spot on!

  • Comment number 94.

    Is this a PR stunt from Daniels? Of course it is.


    If there is ONE bank CEO out there who deserves a bonus, it's him.

    His bank was in much better shape than its peers last September and, costly though it might be for now, he pulled off the DEAL of the CENTURY by acquiring HBOS.

    I'm sure there will be plently bonuses for him in the future.

    Now, let's get Fred the Shred, Andy ASDA and Adam Applegarth to return THEIR bonuses. THEY are the ones who screwed us all.

  • Comment number 95.

    Who writes these contracts? Performance related?
    People keep talking about performance encouraging risk taking, looks more like it's just a way to pay people huge sums no matter what their performance is.

  • Comment number 96.

    Dear Mr.Brown and Mr.Darling

    First, let me congratulate you for the lack of courage that you've shown on the present matter.

    Independently of any criteria, that you as politicians are always so eager to create as a last minute resource, those businesses (banks, private companies, etc) who have required help from government funding should not be entitled to bonuses at all!!!

    And, once the situation improves, they should receive bonuses in line with what the government is receiving back from this massive investment at this stage - surely that is not a difficult thing to do!

    The company I work for is struggling as well but not requiring any Government help so far.... but here is what they've done:

    - Pay reduction in 10% and 10% less time for all workers but management level.
    - Pay reduction in 10% and still working full time for MANAGEMENT LEVEL.
    - Pay reduction of 20%, still working full time for EXECUTIVE MANAGEMENT LEVEL.

    - Company cars, bonuses and "all-extras" have been withdrawn until the situation improves.

    Ah! In addition, there is a plan to return the lost money during this period to the workforce once everything improves.

    Maybe, and just maybe, banks should learn from this example.

    Yours truly

  • Comment number 97.

    "They, however, will today be assuming that their bonuses are also dead and buried, because it's difficult to see how they could take the reward if their leader is refusing the icing on his cake."

    YES ! There is a cartoon there somewhere..
    "The Director Who Was So Frightened Of His Wife That He Decided To Risk Sticking His Neck Out And Taking The Lloyds Bonus..."

    Oh, how we laughed.. He will probably go the way of Paul Moore...

  • Comment number 98.

    Further on HBoS,

    Maybe an investigative reporter should go around Dublin or call a few continental european private equity houses. It will not take long to see that HBoS was seen as a lender of last resort. It participated in some very aggressively financed deals.

    I'm not short Lloyds shares at the moment, so not much point giving my ISP address to the FSA, which has as vice-chairman someone who used to be HBoS CEO - oh, irony!

  • Comment number 99.

    Except Gordon Brown to 'fast-track Daniels to sainthood' in the lion's den of PMQs..

    "If he ken doo it, why can the noo every banker give up their bonus ?"

  • Comment number 100.


    "businesses that should have been a walk in the park to run for anyone with an ounce of common sense"

    Dont you realise that ridiculous comments like this simply result in your statement having no credibility whatsoever. How on earth could managing a bank with c.£1trillion in assets be a walk in the park?

    The man in our typical street doesnt even have the common sense to work out that (1) its not right for house prices to be doubling every 3 years, (2) we shouldnt have been taking on £billions and £billions in consumer debt as a nation of people (yes weve all done it), (3) that it was perhaps wrong that overnight everyone was suddenly driving nice cars off the back of the money they had released from their house which was all of a sudden worth 3 times what it was in the 90s (4) perhaps that 5* holiday or house extension with borrowed money wasnt the best display of common sense.

    How on earth can you argue this is about common sense? We should put you in charge of one of the banks and if it goes wrong, take away your house, car and savings.

    The reason Britain is doing worse than other nations is thanks to the Labour party which has embraced a debt culture with welcoming open arms. That is a fact - the warning signs were there a long long time ago (just check the news archives back to 2001 / 2002) and they did nothing

    Almost all of the banks (globally) have been tripped up by this banking catastophe - the sooner people realise that the better. We should look at why the UK is doing worse than other countries and unfortunately, this is down to OUR government / policy makers and not down to our banks, who have behaved in much the same way as banks in other nations. Welcome to Labour - the biggest boom and bust party this country has ever witnessed.

    One final point - interesting that Darling here that "individuals" are responsible for how much they borrow and not the banks.... He also said he was looking into TV commercials "the sort you see on daytime TV" but wouldnt directly regulate lending levels by the banks - WHAT A GENIUS.... thanks Darling. A true knight in shining armour.


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