to think that bankers who sue take legal action to protect their bonuses should ...

[MmeReindor]

be made to live in a grotty mouldy B&B for a month, so they can see the consequences of their actions. There are people who have lost their jobs because of the recession, who have lost their home, lost everything.

And the bankers still insist on a bonus. On top of their already well paid job?

I am speechless.

The Guardian reports today that this may happen.

Already in Germany, the Commerzbank is facing a legal challenge from its subsiduary, DresdenKleinwort

The bankers claim that Commerzbank, which bought Dresdner Kleinwort, should have honoured an agreement to provide a ?400m bonus pool for 2008. Dresdner Kleinwort reported a ?6.3bn loss for 2008, which Commerzbank believes changed its commitment to the bankers

What really gets my goat is the comment about taxes, from a think tank.

City bonuses are expected to total £4.2bn in 2011, down 38% on the £6.7bn paid out last year, ... will generate about £2.5bn for the Treasury, ... this is still some distance ...from the £6.8bn collected in the peak of 2007-08, clearly illustrating how the taxpayer also misses out when the City pays lower bonuses,"

How in the name of all that is holy, does that even make a bit of sense?

We bail the banks out with taxpayers' money, but should be grateful that we are getting £2.5bn back - if we even get it back, as no doubt some of it will vanish in an off-shore bank account, or via shady tax avoidance.

I think anyone who has something written into their contract deserves to get it if they have performed as per expectation, and providing the company is in proft and in a position to pay it. Especially if their position is sales-driven one, where it is a clear cut case of bringing money into an organisation and being entitled to a percentage share of it.

I don't think it matters whether you a banker or a double glazing saleman.

Now if you are asking me do I think that the banks should look carfeully at how they structure their employees' contracts in future, the timescale they pay out over, the bonus:basic salary ratios, and whether they should pay in cash or shares, a long term incentive plan with deferred payouts, or paying in options to buy shares at a preferential rate, then YES, I agree with all of that.

There may be a legal challenge because the banks in question are in breach of contract if your employer confirmed that in 2010 you would earn 25,000 and actually paid you 18,000 if there was not a caveat included relating to profits you too would be unhappy.

Your second point is very simple to answer. If profits decline the corporate tax bill declines with it whether the organisation is based in the City or not.

Not a banker by the way but I don't think the recession is just the fault of the bankers, a great deal of fault lies with the last government who allowed spending to spiral out of control.

Whether you like it or not the financial services industry which includes banking now represents 20% of this countries GDP and if measure are too punitive in relation to taxes it is an industry that could very easily transfer itself elsewhere.

company profits should go to enhance the living standards of the countries in which they are allowed to to trade- not to bankers.

as already said if a jr banker can earn 75k, why dont they just make better use of their money? you dont have to have all these expences- you make them yourself. no one needs or deserves million pound bonus`s

I am in support of the public sector defending their rights too, so this does make me a little sick but I would be hypocritical to slate them completely.

Many people would depend on bonuses because they were an integral part of the pay structure, for tax reasons as much as anything else, so whilst I find it a little incomprehensible as I am naturally a fairly frugal person I can see how people would expect them.

And whilst we depend on a capitalist society Knitted, company profits will never just be given to the country the company resides in, otherwise where is their motivation to exist?

Marriedandwreathed
No, I don't believe that they will go elsewhere. It is an argument that is wheeled out each and every time someone suggests that bank regulations have to change.

The threat of Switzerland - they will not come here because it would be more expensive for the company as a whole (extremely expensive expat packages, high salaries for support staff) and the bankers from London generally hate it here.

Many companies are moving out of Switzerland, and away from Hong Kong at the moment.

what do you mean because they are an intergral part of pay structure? for tax reasons? so they dont have to pay it you mean?

bonus`s should be scrapped or kept in place and paid straight to improving the lives of people living there, the poorest. if your on silly money you DONT need it.

id really like to see one person on here give me a morally comprehensible argument that someone on 75k needs their bonus more than a homeless person, more than the nhs, more than the disabled who cant work, more than the elderly not eating so they dont die of cold.

just because it "happens" dousnt make it right.

they still earn great money, if you want to earn 75k a year become a banker, its the bonusus they could easily do without. they dont need them, but there are people who do and socially responsibility, and morality should mean that this money is taken and redistrbuted.

knitted
I do see the difference between "legally" and "morally".

And I can understand that if you have it written in your contract, then the company (or bank) is obliged to pay you a bonus.

But in the case highlighted, the bank made a HUGE loss.

So if they had a provision for a bonus payout regardless of profit or loss (in which case yes, we should be angry at those who drew up the contracts) they should legally get the money.

Morally is a different matter.

no business should act in morally responsible way- how on earth can you expect individuals to act tha way if just cos your a compnay you have carte blanche?

as everyone says money trickles from the top and we want a society based on good morals and ethics EVERYONE inc business should act in such a way.

If you have something written in your contract it should be upheld, but im talking about bonus`s in general here, their uses etc

An enormous chunk of what is earned does get redistributed to society - well in excess of 50% in the UK, I believe, once you take NI into account as well as PAYE.

knitted breast do you really think that £75,000 is a high salary?

I spent 11 years as a Eurobond Salesman in the 80's/90's. Those years were fantastic. Could you calculate a potential profit on the basis of a basis point, ie, 1/10 of a percentage quickly in your head whilst under pressure, could you analyse the difference to the desk your every move would make on your feet and fast? Could you, over a sustained period, be in the office at 7.30am every day, under huge pressure, and leave at 7.30pm (if you were lucky) every day. Would you be prepared to be in bed at 10pm every night sacrificing a social life in your 20's to stay sharp and be early? Would you be prepared to be charming to everyone you came across to survive and be salesman of choice to people you didn't care for? Would you have been prepared to stay jolly against the banter of a man's world? Could you have coped with hard and fast decisions against the sheer volume of a trading floor? Could you have lived knowing that if your position on the book slid you would be out in nano seconds, no procedures or support to fall back on.

I earnt £100,000 from about 1986 until our ds was born in 1994. A great deal of that went on tax and what was left doesn't actually go that far in London but it set us up and meant I could support DH when he was carving a far more long term and intellectual career. By the early nineties I was burnt out, I was not going to go any further in the City and certainly could not have sustained a career there with children.

Please don't think that those who work in the City are a bunch of fat cats who do very little. They have little job security on the whole, they work incredibly hard and it is a tough world where although the rewards might be very high for a small minority, the markets take their toll. Certainly on a trading floor you don't see many old men.

Married
I don't think that £75k is a huge salary, for London. We thought about trying to move back to UK, but the comparatively low salaries put us off (DH can earn more here, or in Germany, with lower cost of living).

But people live on much less than that, and have just as stressful jobs but in a different way.

Teachers start their working life on £21k. Is that only a 1/4 as stressful?

I don't think that you can put a price tag on stress factors. Or hard work.

Basically, some jobs are more valued than others, and more highly paid. It has little to do with how hard the person is working.

We don't earn £75k at the moment, but it really isn't a fortune, and wouldn't be enough to entice me into that level position in a bank. I have an issue with the concept of getting money being an end in itself, but can still see that it is necessary to a point to keep society driving forward. That doesn't mean I agree with, or condone morally reprehensible actions by any means. But can understand why if your contract said £100k plus 10% bonus say, you'd be pretty peed off it they just knocked the latter half off to avoid irritating.

bankers create wealth for pension funds?

There is a fundamental instability brought about by a very unequal society, I'm afraid one day that will come to a head.

ive done your hours for 7 and hour. what you give up- well you chose that profession, either accept it or change it.

do i think 75k is alot? do you?

who has security these days?

75k isnt much to you, but it is to most people.

the money can be better used, and to be honest your comments are very off, even when not in the current climate.

by the way, you dont have to live in london, and the 50% tax isnt the whole way is it? and even it it was, 50k a year is plenty. trust me, as most of the country do very well on less

Ninky
If the contracts said, £100k with 10% salary, then that would be ok.

They are getting many times that.

And don't forget that many of the wealthy have clever tax accountants, so I would not bet on the 50% income tax ever reaching the Treasury.

Bankers don't create wealth, they move money around.

I don't think my comments are off, just because you disagree doesn't make me wrong.

I know Mme, I was just using random figures for ease.

Just to be clear, Ninky used £75k as an example.

I am talking, not about those at the bottom end of the pay scale (ie. the starting salaries), but the guys making the big bucks.

Yes, it is a highly stressful working environment. I know guys who have not been able to cope with the stress, but once you get past the first couple of years it gets easier.

I found this blog, it is American and a couple of years old, but gives an idea of what these guys are earning:

Salaries in Investment Banking (with bonus)

Job Level Salary Range Typical Comp Prerequisite

1st Year Analyst $60K - 150K $90K Bachelor's

3rd Year Analyst $120K - 300K $150K Bachelor's

1st Year Associate $150K - 250K $170K MBA

3rd Year Associate $250K - 450K $300K MBA

Vice President $350K - 1MM $500K 3-6 years

Director / Principal $400K - 1.5MM $700K 5-10 years

Managing Director $500K - 20MM $800K 7-10 years

Department head $800K - 70MM $2MM 10+ years

Salaries are now typically higher than £75k in an investment bank. Post 08 salaries were raised since the regulators were unhappy with so much of total compensation coming from bonuses. In the US firm my DH used to work for graduates start at £50k, Associates £70-100k, VP £100-200k, ED £200k-300k and MD £250k-500k.

Of course in London it's easy to get through a large salary. We pay £3.5k/month in SW London (zone 3) for a 4 bed townhouse, £2k/month for childcare for 2 DCs; probably 8k/month in total. So we need £150k/year pre-tax to breakeven.

Now we could choose to live somewhere cheaper but we don't because it's convenient. However, its fairly clear that London has been caught in a vicious cycle. High salaries/bonunses result in high houses prices/rents that require ever higher salaries/bonuses etc etc. That is coming to an end but it takes time.

i dont think i said you were wrong, just distasteful to imply you wouldnt be tempted by 75k, as it isnt anything special when you know (i hope) that most of country will never see a salery of that scale.