Banker's Bonuses

Discussion in 'General Chat' started by loz, Feb 9, 2009.

  1. loz

    loz
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    So, should bankers be paid the bonuses they are eligible for (under the terms of their contract last year one assumes), or should they recognise that they wouldn't even have jobs and their employees would be in administration if they hadn't been bailed out?

    The government is making a lot of noise this week, but critised by the opposition parties for not actually doing much.

    BBC NEWS | Politics | Brown 'very angry' about bonuses

    Gordon Brown is "very angry". :lesson:

    Are you?
     
  2. Solomon Grundy

    Solomon Grundy
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    This should have been sorted out months ago and the Government has just sat there and done nothing. At he RBoS how can they give £20 billion of taxpayer's money to a bank and then watch as they filter £1 billion of our money toward bonus pots? It is an absolute disgrace. Please call a general election so we can be rid of these useless wastes of space...ANY alternative will be better than what we have now!
     
  3. gargoyle

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    Browns only being belligerent because Obamas taking a strong arm approach to these bunch of leeches in Wall Street, pity Obama doesn't start tearing into the american retail energy suppliers, it'd make our poodle take action against eon, npower, bg etc.
     
  4. nheather

    nheather
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    No I don't think there should be any bonuses.

    Nor do I think there are any contractrual issues.

    All the bonus schemes I have come across have been performance based and I can't imagine the banks are any different.

    That being the case, the contractrual bonuses can be paid but it will have a ZERO value based on the performance of the company.

    In my opinion, RBoS have pulled a fast one. They changed the target of their bonuse scheme to be based on the repayment of the loan rather than annual performance. They have met their targets by paying back 25% of the loan (£5bn of £20bn).

    Where I am mightly suspicious is how they managed to recover the £5bn so quickly. The cynic in me says they only needed £15bn or less but asked for £20bn and surprise, surprise they can hand £5bn straight back.

    The government should be seeking proof that the £5bn has been earned outside the loan rather than just giving loan money back.

    But I guess like the majority of government contractrual agreements, it is weak and full of holes that you could drive a London Bus through.

    I imagine the problem is that the government agreed to the bonus based on loan repayment (assumed it would be done all fair and square) and now that the bank has met those targets there is nothing the government can do about it.

    The bank are well placed to say that they are not rewarding failure because they will argue they got nothing from the annual performance (biggest loss in UK company history) but have got it from the success of their repayment strategy. The government have been well and truely hoodwinked and I doubt there is anything that they or their lawyers can do about it.

    Cheers,

    Nigel
     
    Last edited: Feb 9, 2009
  5. PoochJD

    PoochJD
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    Hi,

    Like everyone else, NOBODY working in the banking industry should be being paid any kind of bonuses or financial extras at all! :mad:

    None of them deserve it, and in most cases, the money isn't actually theirs to give-out in the first place, but the publics! :mad:


    Pooch
     
  6. Squiffy

    Squiffy
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    My bonus was 20% up on last years figure. Zero payrise though.

    My employer is still profitable, and is not in receipt of any UK government aid whatsoever.

    As for none of them deserve it... Over the first six months of 2008 when I worked around 500 hours of unpaid overtime, and having identifyed and delivered projects over and above my day job which have saved the bank at least £125k, I think my bonus is well deserved.
     
  7. Wild Weasel

    Wild Weasel
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    It's kinda funny that the biggest thief of all is lecturing The City about morality.
     
  8. nheather

    nheather
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    True - how much did he indirectly take from pension funds - not to mention leaving them in a state where they couldn't continue successfully.

    Cheers,

    Nigel
     
  9. loz

    loz
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    I think that is the problem with this 'witch hunt', in that many bank employees who are entitled to 'bonuses' of one form or another will have not been involved in any of the risk taking side of the business that has caused all the problems.

    I think the problem then is what people define as a 'bonus'. If the expectation was that is was just a variable part of their salary, and not some additional reward for some outstanding performance by them and the company, then they will think as long as they did their job and hit all their targets why shouldn't they get paid.

    However, the first rule of any 'bonus' schemes in any companies I have worked for is that the company first has to be profitable. No profit, no 'bonus', for anyone.
     
  10. andykn

    andykn
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    Part of the "witch hunt" is the feeling that most of these very people are the ones who have got us into this mess in the first place.

    Many of us do our jobs conscientously without having to be bribed to do it, too.

    Many of these people recently have clearly been grossly overpaid for the benefit they have brought to society - any bonus they may feel they are "entitled" to now is surley outweighed by all the bonuses they got but clearly didn't earn.
     
  11. indianwells

    indianwells
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    If Brown really wanted to stop these payouts he could. He could just rush through a 99% bonus tax in the banking sector.
     
  12. Bill Hicks

    Bill Hicks
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    Well talking about RBS, do the majority their shares now belong to the public?
    If so then there's no way that WE should be propping them up for around 20 billion and then let them pay out 1 billion in bonuses!

    As for Brown & Darling bleating about it should not happen, then they should grow a pair and stop it from happening, full stop!

    Don't want to turn this discussion into a Labour Vs Conservatives one, but it's really about time that Labour commence a general election so that we can get their sorry incompetent arses out of No 10!
     
  13. Ian J

    Ian J
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    Another well thought out sound bite from everyone's favourite soapbox :D
     
  14. tony brazao

    tony brazao
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    If the bank has had a bailout, NO!

    If the bank has not had a bailout, unsure, maybe yes maybe no??? :confused:
     
  15. Ian J

    Ian J
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    Probably about 500 bank employees in Britain will have had any direct input into the huge losses that have been made with the rest just doing their jobs as honestly and diligently as they can.

    You are right though that a company which has just made the biggest loss in corporate hsitory and has had to be bailed out by the taxpayer in order to secure their jobs shouldn't be thinking of bonuses anyway.

    Sir Fred Goodwin who will now be known throughout the country as the worst banker to ever walk through the City should have his knighthood taken away.
     
  16. PJTX100

    PJTX100
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    I thought that honour was McKillop's?
     
  17. Ian J

    Ian J
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    Goodwin was the driving force and he has overseen RBS plummet from one of the largest banks in the world to it's current position as a basket case.

    He paid £10b for AMRO bank last year which was far more than it was worth but his ego wouldn't let his great rival Barclays buy the bank. The whole RBS group is now worth significantly less than the amount he paid for AMRO
     
  18. Alan_W

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    Accepted, but for this diligent toil they have been paid a good salary. Why should bankers have a God given right to bonuses, especially in a situation where their companies have lost fortunes.
     
  19. loz

    loz
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    well I don't think they have a "god given right", just an employment contract and a pay structure that rewards them via a combination of basic wages and 'bonuses'.

    It would hardly be fair if an employee had met their side of the bargain, but then was refused their bonus just because it was suddenly embarrassing...

    However, as I said earlier, no one should be paid bonuses if the employer isn't in profit. And if they are, or because 'bonuses' actually compensate for a poor basis wage (and therefore are expected), then that sounds like a poorly constructed contract.

    And, in cases where the bank has only survived, and hence is able to pay out any bonuses at all, purely bacause it was bailed out by the government, then I don't think they should be paying out bonuses either.

    It seems to me it is no use saying that these bonuses were part of their 2008 contract and therefore should be honoured, because had the government not bailed them out they wouldn't even be collecting a salary yet alone a bonus.
     
  20. nheather

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    But I would be very surprised if this were the case. Every bonus scheme I have seen works along these lines

    Maximum (based on grade\position etc) x modifier based on comp performance x modifier based on personal performance

    Now if the company does not meet minimum performance then the modifier is ZERO

    Likewise if the personal performance does not acheive a minimum level then the modifier is ZERO.

    Given the biggest loss in corporate history then the company performancy modifier has got to be ZERO.

    It would be in the company I work for (and probably will be this year) - in fact my company made a profit but it is below target. My colleagues are likely to get ZERO bonus, even though the company made a profit and regardless of how hard they worked.

    I can't imagine it would be any different for a bank.


    No the issue is that they have introduced a new style of bonus after the collapse which is based on different rules - that is the really cheeky bit in my opinion.

    Cheers,

    Nigel
     
  21. Squiffy

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    Why does everyone assume that everyone who works for a bank is a banker?

    I work in IT. My contract is made up of a basic salary, a flexible benefits package, and bonus.

    The bonus is dependent on two things.

    Firstly the size of the bonus pot is dependent on the company performance. Company does badly, the pot is reduced. My employer is still in profit, although way down, so the pot has been reduced.

    The other factor is your performance and how much of the pot you get as a result.

    Obviously with a reduced bonus pot and my bonus increasing, my performance has been recognised as excellent. And so it should given the huge number of unpaid hours I put in, and the cost savings I've delivered to the bank.

    Just because some guys at the top screw up, it doesn't mean that everyone else in the organisation did too. Even in the likes of RBS there are some very hard working people who have done nothing at all wrong.
     
  22. loz

    loz
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    Not sure what you mean. Surprised that people have a compensation scheme based on basic salary + bonus? :confused:


    Isn't that exactly what I said? Twice.
     
  23. kav

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    Spot on, except it was actually £100bn. Did you know that as of December, five of the world's biggest banks, together with General Motors and Chrysler, had a combined value of less than the £100bn RBS paid for AMRO in September? Pretty incredible.

    And squiffy is spot on. Let's not forget that the slick-talking city-boy stereotype generally makes up a tiny percentage of the overall employee population. Most other employees are on far more realistic bonuses that they work hard for by putting in the hours without any other form of compensation. And many of them aren't even getting a bonus this year, even when their employer is profitable.

    I agree that a company should be profitable to be paying bonuses.
     
    Last edited: Feb 9, 2009
  24. nheather

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    @loz

    Yep apologies twice.

    The first point - I didn't write down what I meant. I meant to convey that just because you have a contractrual bonus doesn't mean that you are guaranteed a bonus.

    Second point - sorry I didn't read your posting properly - we are indeed saying the same thing.

    Like you I was responding to all these comments (including Mr Darling) that the bonuses are contractrual. And our response is, yes they are but that doesn't stop the bonus award being zero and abiding with the contract.

    Cheers,

    Nigel
     
  25. tony brazao

    tony brazao
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    I hear what you're saying.

    But.....

    Banks are a team of people. If the team of people have failed and have had to ask for some coffers from the Govt, then the team does not deserve a bonus as this is rewarding failure.

    Think of it like a football team. Even if most of the team play well, assuming the goal keeper lets in loads and the strikers are off target, that is a big fail and, the team does not win. Even though most of the team worked very hard and did 'their' bit very well, this is not a win, it's a fail.
     
  26. loz

    loz
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    apologies accepted :smashin:

    I think we are generally in agreement
     
  27. Squiffy

    Squiffy
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    OK, but to take your analogy further.

    So the goalkeeper makes some appalling decisions, and even though it isn't the defenders fault, they let in 5 goals and lose. So the whole team fails to get a win bonus. OK, fair enough.

    But what about the lady in marketing who has managed to increase merchandise sales from the club shop. Does her bonus get stopped too? Would it be fair for all the fans to be moaning away that everyone at the club is a useless git of a goalkeeper who doesn't deserve any sort of bonus?

    Actual bankers are few and far between, and those responsible for the decisions leading to the recent disastrous results a tiny percentage of that.
     
  28. jay mc

    jay mc
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    Yes and No, depends a lot on what role the banker played in all the mess ups.

    My otherhalf works for the rbs call centre in southend and has been told this year she wont get a bouness despite hitting all her sales targets and not being part of the bad debts side. So for someone who helped brake the bank to then get a huge bouness just sucks.
     
  29. tony brazao

    tony brazao
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    I can see the thrust of what you're saying but its starting to look like we'll have to differ or risk becoming very pedantic with this thread! :D

    If the bank has had to go 'cap-in-hand' to the Govt and ask for tax payers money, then these begging-banks should not get a bonus - not only because they've brought the world economy to it's knees, but from another perspective: If the banks had not had our money, they'd have gone bust. Bust = no wage and, no bonus. Simple. :thumbsup:
     
  30. Woodywizz

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    I work for RBS and what in the hell gives you the right to say that no bank employees deserve a bonus? Do you understand the amount of work that many many many thousands of staff put in each and every year - bringing in income to the bank. As has been said in this thread, much more eloquently and reasoned than your typical Daily Mailesque knee-jerk rant, the losses were due to the write downs caused by tha ABNAMRO take over - how many retail/commercial staff do you think were involved in the decision making behind this acquisition - I can tell you, none.

    Of course bonuses should not be awarded to recognise failure, but when a "bonus" is contractual and is part of your salary - then it should be paid.

    You obviously have no idea about the banking world - I imagine you think that all staff are walking around a la Gordon Ghecko, smoking cigars and driving porsches. The reality is far far different from your insular ill informed view of the world.
     

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