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Bankers' Bonuses

(23 Posts)
annodomini Thu 28-Feb-13 22:12:19

Should we be worried that capping bankers' bonuses at the equivalent of one year's salary would drive banks out of London? Boris and Dave think so

annodomini Fri 01-Mar-13 08:21:54

I posted this too late last night to get a discussion going. I feel sure that there will be some opinions on this issue!

Bags Fri 01-Mar-13 08:30:08

Where would they go? London has been a financial centre for a long time. I suppose there's New York, or Hong Kong??

I don't really know if we should be worried. Maybe we should, but maybe they are just talking scary to avoid their chums being "defrauded" of big bonuses.

I'm not sure we can do anything but wait and see how the political discussions pan out.

Bez Fri 01-Mar-13 08:51:29

I wouldn't mind the bonuses so much if the banks were actually making a profit - especially those which were baled out - I think it is obscene they are getting what we must assume is MORE than a years salary in bonus when so many people, badly affected by the mess they or their mates made, are having a dreadful time and so many jobs being lost and businesses closing. How can it be right morally?
Some of them may move away from UK but many of them will still be able to have a very good life style with what in effect will be double pay and they will have family ties and reasons to remain here. Call their bluff I think.

absent Fri 01-Mar-13 10:00:38

America doesn't want our greedy bankers; it's got plenty of its own. Do our bankers include fluent Chinese in their vast array of talents that require them to be paid vast sums of money or they would abandon ship, according to Dave and Boris? How many billions has RBS lost this year; I know it's paid out £5 million in bonuses. Imagine how much it would pay out if it actually made a profit.

Mishap Fri 01-Mar-13 11:02:50

I do not know whether we should be worried either to be honest.

I do know however, that the idea that some people require riches in such obscene quantities in order to be persuaded to do their job well is somewhat offensive.

What do they do with all that dosh? What shallow minds must they have that lead them to need these riches to boost their egos? Are these the sort of people we want to be running our financial institutions?

absent Fri 01-Mar-13 11:32:07

It will be interesting to see of the new regime at Barclays really does change the ethos of the bank.

Humbertbear Fri 01-Mar-13 11:38:50

Bankers can go anywhere in the world. With so much done online a major bank can re- locate its head office to anywhere in the world where the taxes are lower, the weather is warmer and the government friendlier.

absent Fri 01-Mar-13 11:42:07

But bankers also have families and relocating to another country might not suit family life.

Aspen Fri 01-Mar-13 16:09:46

Where do they all think they are getting jobs. Banks the world over are laying off staff so why would they want our lot. The pool of "brilliant" gamblers who are employed in UK can't be that small that they think they can hold us to ransom. Try doing without our medics of all levels, dustmen and road sweepers, teachers, shop workers etc etc and we soon feel the effect. These bankers should roll up there sleeves and try manufacturing something if they are so clever. Call their bluff I say.

annodomini Fri 01-Mar-13 16:16:21

Why should other countries want a bunch of overpaid tossers who have already messed up our own banking system?

Badenkate Fri 01-Mar-13 16:20:04

We're told that we have to pay them these obscene amounts of money because we need to keep the best. These 'best' are the ones who cheated, misread the way the markets were going, promulgated schemes which were dubious at the best and generally caused the misery that so many people live in today! Let them all go and let's try some of the 'not-so-best' that I'm sure are quite capable of coping with running the banks - and may be more trustworthy than those doing it at the moment.

Galen Fri 01-Mar-13 16:26:48

Yes. Call their bluff.

soop Fri 01-Mar-13 17:11:58

anno grin

Movedalot Fri 01-Mar-13 18:00:30

Its just not going to happen. We might lose a few to markets outside Europe but then others will get their jobs. The markets outside Europe are just not big enough to take all the spare ones from Europe.

I don't think it was just our bankers who screwed up though was it?

FlicketyB Fri 01-Mar-13 20:52:32

Somebody pointed out that the salaries of many bankers are relatively low to keep fixed costs down for the bank and they reach their market salary by their bonus.

My own experience suggests that this may well be true. Back in the 1980s, before the Big Bang, I went for an interview with a large overseas bank in the City. My job was not directly connected with bank activities but the salary I was offered was about 30% lower than that I would have expected at my level in my profession, but I was told I would receive an annual bonus that would double this low basic salary. I turned the job down, despite the promise of the much higher remuneration I would receive from salary and bonus.

I knew from bitter experience with my husband, whose profession was nothing to do with banking, that bonuses are fine while they come. His then employer paid large bonuses every six months for his first five years with the company and then without any warning they stopped. We were always cautious about anticipating the bonuses, but several colleagues had ordered new cars, booked holidays etc on the basis of the anticipated bonus and found them selves financially embarrassed as a result.

POGS Fri 01-Mar-13 20:55:59

There is a valid point to what has been said.

The UK does have a higher financial sector than other EU countries. France would not and do not allow the EU farming subsidies to be challenged because that is in their national interest. The UK has a national interest in keeping the financial sector on our shores. That is the what Cameron and Johnson are trying to say.

There is a back lash against Bankers, I understand that. Their greed and disreputable tactics caused a banking crisis. The, then, government did not control the financial sector and it got away with murder. Along with the prolific wasted spending of the last government, which gave us the highest debt in Europe, the public now wants to get it's revenge.

The fact is the tax revenue from the financial sector is a very large portion of the UK's tax collected. The tax from the financial sector pays into the pot for our schools, NHS, defence etc. etc. That alone makes it a neccessity to remain a big part of the UK P.L.C.

If they are restricted to a bonus of no more than 1 years pay, all that will happen is they will increase their wages. That is bad working practice as when a bank/company want to cut it's finances having to pay out redundancies for exaulted wages is bad news. It costs more to run the business and that is not a good thing either.

It does leave a nasty tast in the mouth, I agree. It has to be evaluated on common sense though, not just to get our own back. I would like to see a few more facts before I make my mind up.

grumppa Fri 01-Mar-13 22:33:51

Some bankers' bonuses were obscene, but I'm not sure the EU approach makes practical sense. First, how is a bonus defined and measured? Does it depend on personal performance measured on appraisal or on meeting specific financial targets, on the profitability of a division within a company, or on the company's overall profitability, or on a combination of any or all of these?

So there will be ways round whatever is decided.

Second, structural regulatory problems will not be resolved by regulating just one aspect of pay.

Third, finance tends to attract clever, greedy people. Dissatisfied bankers will go somewhere else, e.g. hedge funds, where there is scope for different sorts of damage.

I confess to having worked in the City for 30 years, but NOT in banking!

annodomini Fri 01-Mar-13 22:56:34

What is interesting is that some politicians seem to believe that it's a good stick with which to beat the EU - to attack this proposed restriction of bonuses to a mere 100% of salary. However, I suspect that the majority of people in this country would be pleased at some restriction of these obscene bonuses - preferably to a lower percentage than 100%.

Eloethan Sat 02-Mar-13 00:13:37

After everything that's happened, why are we surprised that this government thinks it's perfectly acceptable for bankers to demand bonuses in excess of 100% of their salaries. And people complain about unions!

POGS Sat 02-Mar-13 00:45:20


Didn't Labour think it was perfectly acceptable for bankers to demand bonuses in excess of 100 % too?. They were in power until the ass end of of 2010. The crash happened in 2008.

It is not what the political parties think, it is what safe guards taxes being paid , jobs kept in the UK. Sometimes there is a bigger picture than wanting revenge, even if it stinks. This is a global issue and not competing in that field is possibly financial suicide.

I for one am astounded at the wages footballers get, BBC presenters such as Grahan Norton, Jonathan Ross (when he was there), sports presenters etc. Some earn vast sums of money, MORE than bankers.

I would like to see no public sector employee, or public service employee receive a wage higher than the Prime Minister. The Prime Minister should be the top public servant. Will that ever happen, no, even union leaders earn more. Go figure.

absent Sat 02-Mar-13 06:56:35

Bonuses should be just that – a one-off payment for having achieved something especially good for the employer. They should not be an automatic regular payment, regardless of performance, written into the employment contract.

The Prime Minister's remuneration is rather more than generally stated because of the "perks'. The figures given are misleading.

POGS Sat 02-Mar-13 13:06:27

They are all misleading and they all have perks, whether they work for the NHS, BBC,etc. or are the Prime Minister. He still has a lower wage,perks than some other public employees and that is wrong. This point is rarely raised because it would cause mayhem. I would be delighted to see the top civil servant, the PM, to have the top wage, paid by the public purse. It would be for us as a country to decide, not the bloated, beaurocratic EU Parliament though.

Why should the EU dictate bankers wages only. That is not their remit. If they go down this road, what next. Spain will have to pay shop workers the same wage as a shop worker in Germany. Poland will have to pay the same wage to it's nurses and doctors as France do. Roumania will have to pay welfare to it's people the same as those on welfare in Britain. It's a slippery road and I think they are getting at the UK because we have the dominance over the financial industry. It is not sound practice what is being proposed. Like a lot of things with the EU, common sense and sound judgement are not the main agenda.