Posted on 03/25/2009 11:27:56 PM PDT by bruinbirdman
The two chiefs of Royal Bank of Scotland’s highly profitable commodities trading joint venture have quit the nationalised bank before an expected review of pay and bonuses.
David Messer, the United States-based chief executive, has left after the departure of Frank Gallipoli as president this month.
RBS Sempra Commodities was formed in 2008 by the bank and Sempra Energy Trading, founded by Mr Messer. An industry source said that a number of traders were planning to quit because RBS is about to clamp down on pay. It is understood that the bank is conducting a review across all its operations and that Sempra is not exempt.
Some of the biggest cash bonuses paid out by RBS are believed to have gone to traders at Sempra, many of whom were on guaranteed deals.
An industry source said: “Sempra traders received their usual cash bonuses a few weeks ago. But there is talk at the firm that from now on bonuses will consist in part in some equity-like securities, but there will be a delay for some of the payout.”
A source close to the company said that the departures of Mr Messer and Mr Gallipoli were not related to the remuneration review and added that commodities trading was expected to remain a core part of RBS’s business. It turned over about $1.5 billion in trading revenues last year.
Before the formation of the commodities joint venture, Sempra traders received a proportion of their trading profits as cash bonuses. One source said: “Top traders are expected to go to privately owned trading shops, like Glencore, where they’ll probably get paid all in cash.”
A group of RBS Sempra traders has previously fought attempts by HM Revenue & Customs to force them to pay more income tax and national insurance on their bonuses.
(Excerpt) Read more at business.timesonline.co.uk ...
Not to worry. No doubt India, China, and Dubai are hiring.
It’s happening here as well. The very businesses deemed “to big to fail” are driving their best and brightest away, thereby ensuring their failure or at the very least a reduced level of performance. At the same time the ones who have left will of course always find employ at the competition, thereby putting added pressure on the businesses deemed “to big to fail”.
Additional bailouts, anyone?
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