Beware the little person
It's not just Gillian Duffy who was making the big powerful people sweat on Wednesday.
The chairman of Royal Bank of Scotland had his annual encounter with the little people - the shareholders still very grumpy at the dismal plight of their blue chip investment.
Sir Philip Hampton handled his challenge rather more competently than Gordon Brown.
And unlike the Prime Minister, he had the benefit of knowing he had the resolution results in the bag - put there by his main shareholder, the UK government's investment arm, swinging 70% of votes his way.
On the contentious issue of executive bonuses, less than 1% of votes were against.
The protest was more audible than that - a sort of indignant murmur when Sir Philip suggested that banker bonuses are not "obscene".
The directors are yet to make clear the threshold for bonuses this year, and have until next week's quarterly results to clarify.
That update is published at 7am on the morning of 7 May - as election results are digested, a good time to bury bad news, perhaps.
Out the mire
There's a familiar reasoning behind remuneration.
RBS has to pay market rates. It can't set the market.
And it needs the top investment bankers to dig it out the mire.
Familiar too was the reasoning behind RBS's failure to hit its business lending targets last year; it's having to fill a gap left by others who left the scene of the credit crunch, businesses are keen to pay down debt rather than build it up, and 75% of the pre-crunch lending was for commercial property, now not a place you would want to sink loans.
New was the argument that business lending is not a necessary pre-condition for growth.
Sir Philip cited the 1990s, when lending fell over three years and recession turned to growth at an annual 3%.
Under majority public ownership, campaign groups see RBS as vulnerable to pressure on environmental and human rights issues.
So Sir Philip faced not just a lot of shouting outside the Edinburgh International Conference Centre (incidentally, about 200 meters from the Point Hotel where his chief shareholder, Alistair Darling, was making a campaign speech), but a couple of pointed questions from those campaigners in possession of share certificates.
Criminal gangs
One documentary-maker, Simon Chambers, raised lending for Vedanta Resources, a London-listed company active in India.
Another - Eriel Tchekwie Deranger speaking for the First Nation people of Alberta in Canada - sought to link RBS lending to oil companies whose tar sands extraction is, she said, degrading the environment and costing lives.
Sir Philip's response was polite but firm: while RBS claims to have moved out of tar sands, the business activities of client companies is not his responsibility.
Yes, he acknowledged the bank cares about reputational risk.
But it's not for a bank to second-guess the environmental regulatory regime in Canada, or to police human rights abuses in India.
There are some customers the bank wouldn't have, the chairman reassured: "Criminal gangs are not on the list of our preferred clients."
Significantly, the attempts to use the leverage of public ownership has not had much impact politically, yet.
The government has passed on public pressure for action on banker bonuses and business lending, but it hasn't responded to pressure on the ethical questions of lending.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at 大象传媒 Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 29th Apr 2010, dennisjunior1 wrote:Douglas:
Yes, the high-flyers should be afraid (beware) of upsetting the little person because they can make much trouble for them in many prevues....
(dennis junior)
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Comment number 2.
At 29th Apr 2010, oldmack wrote:Douglas,
Come May 7th you like many more will have to wake up and smell the coffee.
This outrageous statement purprotated by not only yourself but many others that 鈥渨e have to pay top dollar in order to get the best鈥 has become a millstone round a number of necks within the banking industry.
Goldman Sacks, RBS, HBOS, Lloyds, have all been caught out not only laundering the book鈥檚 but lying to cover their bad management, with the usual cop out 鈥淏.S.E.鈥 yup 鈥淏lame Someone Else鈥 鈥淚t鈥檚 a Global problem鈥 Gordon Brown, 鈥淚t was America where it all started鈥 yes but it was here that the Bank鈥檚 great and the good bought into the myth that there was a pot of gold at the end of the rainbow.
I take it the 鈥淔red the Shred鈥 was one of the 鈥渂est鈥 the very fact that we the little people are about to give a great number of the Great and the GOOD a fright next Friday. By creating a Balanced parliament will undoubtedly have the effect of down grading the pound and the Bankers will be there with all the excuses as usual, whilst still pocketing their due entitlements, but that great lever the P45 will still be there with a great number of the Great and the Good鈥檚 name printed thereon.
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Comment number 3.
At 29th Apr 2010, spagan wrote:GM-DF
"Tough on Bankers' Bonuses. Tough on the causes (unbelievable and unacceptable greed - IMHO) of Bankers' Bonuses!"
I think that is an approximation of another of Gordon's bonuses.
I presume that the "ordinary" shareholders are simply "bigoted" about bankers?
"We" (ra people) own this bank. Does New Labour really believe that "ra people" want such obscene amounts paid to assorted amadhans - who float to the top of the banking barrel in the same manner as "floaters" sail down the Clyde?
If we are entering an era of austerity - then that austerity should be borne first and foremost by those who caused it.
Slainte Mhor
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Comment number 4.
At 29th Apr 2010, Brian wrote:Gordon Brown, when announcing the bail-out packages to UK Banks stressed that there were conditions. Surely two basics should have been that 70% of the board would now be made up of appointees of the Government and secondly, that no bonuses or increase in salaries be permitted until the Government loan was repaid. It seems that these were not included, so now RBS are continuing 'business as usual' grabbing the cash and thumbing their nose at we the tax-payers. Brian.
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Comment number 5.
At 29th Apr 2010, AskNoQuestions wrote:Gillian Duffy did not make the PM sweat.
His unguarded remarks on an exhausting campaign trail, as reported on by a gloating hystrerical morally bankrupt media, made him sweat.
His apology was functional and expedient.
If anyone believes that any top politican (or businessman) gives a flying fig what the little people think then they need to wake up and smell the coffee.
They want your votes and your money. Nothing more.
Don't blame the players, blame the game.
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Comment number 6.
At 29th Apr 2010, spagan wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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Comment number 7.
At 29th Apr 2010, spagan wrote:5 Ask No Qs
He was sweating alright.
He's completely uncomfortable in the company of the people he professes to represent.
"Not the most educated knife in the drawer" - possibly.
"Elderly" - possibly.
"Thrawn" - possibly.
"Working class" - yes.
But "bigoted"? Methinks not.
Would Gordon Brown want her as his neighbour?
Would Gordon like her to vote for him - "Yes - pretty please".
Quelle surprise that New Labour have allowed the rich to get richer at the expense of the poor.
Slainte Mhor
PS - If he hadn't scrapped the 10p tax band, then millions like her would be removed from tax - and she may not have tackled him in the first place.
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Comment number 8.
At 29th Apr 2010, Wee-Scamp wrote:Douglas
You're asking the wrong questions. What we need to know is how many companies RBS has helped start up or grow in the past six months or so.
Bonuses should be based on the contribution that each bank makes towards growing and rebalancing the economy. You could easily apply a rating to each bank and that would determine the bonus level that the bank could apply.
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