James Moore: RBS is still a mess, but the fellow to blame is in the clear

City advocates can't seem to get their heads around why this makes people cross

In the days when Fred Goodwin was busily running Royal Bank of Scotland (RBS) into the ground, taking a pop at the world's worst banker came at a price. It was almost guaranteed to prompt a call from one of his legions of PR people.

Having worked themselves up into a good lather they would invariably start the conversation by pointing to his hostile takeover of the National Westminster Bank in early 2000 as an example of why their boss was cleverer than God and should be immune from criticism.

For years this was held up as a wonder-deal, an example of what mergers and acquisitions could do. The former Sir Fred was held to have turned around the sinking NatWest while transforming a rather dull and conservative financial institution largely restricted to Scotland into a super-duper megabank in the process.

Even after RBS's fall you could still find people to laud the NatWest deal. The blame for its troubles was placed upon the hubris-driven acquisition of the Dutch bank ABN Amro.

Yesterday's publication of letters between Stephen Hester (Mr Goodwin's successor), and the Treasury Select Committee tell a different story. The bank's recent IT snafu was felt most keenly in Northern Ireland, where some customers found themselves shut out of their accounts for weeks.

Mr Hester explained why: "Ulster Bank has been more heavily affected... as it is in part dependent on NatWest systems."

In other words, 12 years after the deal, RBS is still a mess and using a hotchpotch of different systems.

The first thing a company does after a merger is slash and burn. Executives know that rapidly cutting costs by eliminating duplicate roles and branches is essential to keep the City happy and their bonuses fat. Then it's on to the next deal.

This is what happened at RBS. The tens of thousands of customers in a small part of the operation across the Irish sea? They were forgotten and left to rely on rickety old systems which RBS hoped would muddle through.

Now the Financial Services Authority is investigating, and there'll likely be some sort of fine, which won't matter much. The bank is owned by the state and Mr Hester has already passed on his bonus. Meanwhile, the man responsible for the mess is enjoying the fruits of an enormous pension pot, immune from any calling to account. And still the City of London's advocates can't seem to get their heads around why this makes people cross.

Darty chief in the money for doing almost nothing

If you wonder what Darty is, it's a rather obscure company that (when known as Kesa) used to own Comet, the electrical retailer.

It's in the news because it has handed its chief executive, Thierry Falque-Pierrotin, the best part of £350,000 worth of shares for doing nothing more than staying at his desk for three years.

It would have been quite a bit more had he managed to do what he's paid for and arrest the alarming decline in the company's share price, but no performance conditions were attached. That fact only became clear last week after the company admitted to mistakes in an earlier annual report.

The cash was paid to compensate him because his previous employer had also offered him a lorry-load of shares if he stayed put.

Such "retention packages" amount to little more than a racket. A con trick played by company directors upon the shareholders they are supposedly employed to serve.

At lower levels of the corporate food chain they can work quite well. If you have an employee who has proven their value, incentivising them to stay makes sense.

Rivals faced with a choice of two or three good candidates are unlikely to buy out someone's incentives if they can hire a credible alternative.

Things are rather different at the upper echelons of management. Companies are risk averse. They pick their executives from very short shortlists of candidates and pay up to get who they want, compensating them for any lost retention schemes, as with Mr Falque-Pierrotin.

If the executive then does nothing to deserve the money, other than staying in post, shareholders just have to lump it.

If the executive is any good and a rival wants him they'll just buy out his retention package. So the shareholder loses again.

The fund managers who look after those shares for smaller investors and their pensions rarely kick up much fuss: they're frequently on lucrative retention packages of their own.

Cupid deserves love from hard-hearted investors

Deary me. Has even sex stopped selling as a result of the recession?

Well, not exactly. But while Cupid's little arrows are still firing, they didn't quite hit the targets the City had in mind.

A 51 per cent increase in revenues from the online dating company which bears his name might make it look like there's an awful lot of love to share around. But Cupid's shares were friendless in the market and finished the day down.

What exactly has poor Cupid got to do to get a little love from hard-hearted investors?

Perhaps it's time for to organise a freebie – sorry, investor roadshow – to take some of them to see the company's burgeoning back office in the Ukraine, where the IT industry is becoming something of a success story in a part of the world that could use a bit of cheer.

It seems that the country has a surfeit of tech-savvy super-geeks who in Cold War days might well have found nefarious work in the Soviet armed forces.

The language of love might be French, but it also needs just a little push from parts east to get things going, tovarisch.

With a huge potential market of singletons looking to say "pryvit" to the right person, the shares won't be lonely for long.