To not see the problem with bankers bonuses? Politics of envy?

[What1]

This is not a thread about a them read but I just read a comment which inspired me to ask ; why do so many people have a problem with bankers bonuses or the high salaries in the City? I mean, these are private institutions (nnot supported by the public ; except for the odd bank), so I just don't see why people think the salaries will affect them.

The way I see it, if they paid less and didn't give bonuses, then the shareholders would get to keep more to themselves and the general public don't benefit anyway (I may be wrong?)

It's just quite annoying reading all these comments which seem to stem from envy. So I have to ask ; why do you (oor people you know) have a problem with big bonuses and high salaries ; AIBU to not care about their salaries and be annoyed by these politics of envy?

The government can afford to pay nurses more. They simply have to raise taxes or use the taxes they raise in a different way. They don't do this because they don't believe it's what taxpayers want and they are accountable to the taxpayer through the ballot box.

The same taxpayers are ultimately the shareholders in public companies via their pension funds. Not much democracy there, as the trustees of the pension funds don't consult their members about their investment policy. So the cosy cabal at the top just sit back and wave the salary decisions through.

Ocelot, bonuses are taxed. Almost all private sector bonuses are linked to some element of annual performance. That is how it is used to improve performance.

What: If the Government actually made an effort to collect taxes from the people who don't pay them, then we could actually afford to pay our public sector workers a living wage. But then, why bother. Obviously earning a lot of money for a bunch or already-wealthy shareholders and board members of banks and other large businesses is far more important that educating your kids, emptying your bins and giving you a health service that is the envy of the world.

What1

Have you worked at all in the city? Or in investment banking

It's a culture of greed not to say all that work in this environment are awful people of course they are not I dislike all this bankers are wankers stuff but it is a culture that celebrates and often driven by greed is not good for our society especially when it's allowed to have such an impact

Come bonus day it is quite sickening to hear how much is going to be spent on a car or set up in ways to avoid tax on further earnings

Risk, spreading that same money further down the payscale is usually better for the economy.

If someone's already eating out 7 days a week, they're not going to eat out 14 days a week if you double their bonus.

If another 20 people aren't eating out at all, and they each decide to eat out once a month if they have a small pay rise, that's a net increase of 240 meals out for the economy.

Sometimes that might involve closure of one restaurant in the Square Mile and opening of a dozen restaurants elsewhere.

It's a crude example, but broadly true. Poorer people spend more of their income than rich ones.

I think that, prior to 2008, if shareholders wanted to overpay their employees, that was s private matter. Given that most banks would have gone bankrupt in 2008 were it not for a massive bailout, all the jobs have been subsidised by the taxes of 'ordinary' people. Post 2008 there should have been much more sensitivity about payong big bonuses.

Incidentally,ist banks are owned by pension funds in the main. So, it is your pension funding the bonuses. If you don't like it, you should make sure your pension is not invested in these institutions.

240 meals out per annum

Isn't one of the issues that a lot of people have that they are well remunerated to start with and are then paid huge bonuses on top of that.

There is no envy, as stated by many eminent economists this causes short termism with bankers only thinking about their next bonus rather than what's good for the company and the investor. Many of them will have moved on by the time the shit hits the fan.

Also, to be so richly rewarded for "taking risks" is a falsehood. They take no risk, its not their money, they maybe risk a disciplinary or losing their job but they aren't taking risks with their money like entrepreneurs and individual investors do.

Finally, the " they work hard" thing. Yes, many in the city work very hard doing long days. But if you are paying "half in tax" as one quote said ( actually not possible with tax thresholds) you are earning 6 figures, many packages also include far greater than the normal amount of holidays and all sorts of added incentives (private healthcare, gym membership, expense accounts, travel allowances) please do not try to make anyone feel sorry for poor bankers who have to work for their money. Feel sorry for the poor sods doing 12 hours a day in many essential service jobs who earn 10 % of what bankers get.

So no, no envy, just most people realise that it was the financial institiutions and their short term greed that caused the financial crash ( IMF, IFS et al) and the ensuing recession and debt because of it. However they have take no responsibility for it at all where as public services and the poor have borne the brunt, which generally effects people who are "hard-working" just not privileged enough to be protected like bankers, that's why people are angry.

Royal Bank of Scotland?

I think pretty much every bank except Barclays took money from the government in the crisis. Only 3 were taken over by the government.

The government bail out stopped a much bigger meltdown because it basically gave reassurance that they would bail out others. The banks, bankers and business would have gone under without taxpayer support but now they ignore this and do all they cannot to pay the tax they owe

zee I was just making a point that the government does not pay bankers so should not be bale to dictate what they earn. And that nurses are paid by the government so that is why they are paid less. That's why i also believe in bonuses and higher salaries because it means that more 'ordinary' bankers can earn more instead of shareholders just keeping all their money.

Freudian No I havent. My post isn't about the personality or spending habits of these people. Just that i think its unfair how everyone claims they don't deserve their money and attacks these people because elf hoe much they earn. them being greedy and buying cars has nothing to do with me - I know plenty of greedy people who are not rich.

It is no good being angry or jealous. The only thing to stop this waste of money (and talent) is to stop pension funds investing in bAnks that have actually produced negative returns for their investors over the past 15 years or so. Write to your pension fund asking them to justify their investment decisions, get a petition etc. Barclays is one company like this. Investors get screwed, employees live like kings. This is NOT capitalism. The risk takers are the shareholders not the employees.

Why does everyone think that the bonuses aren't taxed?!

Also, are any of the people giving views on here actually involved in designing bonus schemes under the FCA regulations on variable pay, or sit on or advise Remuneration Committees?

"That's why i also believe in bonuses and higher salaries because it means that more 'ordinary' bankers can earn more instead of shareholders just keeping all their money."

Its the shareholders money they play with you dolt. This is the problem, bankers take no risk and are richly rewarded, the shareholders invest and take the risk and are thought of as "keeping all their money" without the shareholder there would be no capital to invest, in fact there would be no bank. You're a fool.

So you completely refute the evidence that the structure of the bonus system in parts of the industry was a direct contributor to behaviours which led to undesirable (sometimes criminal) actions in some areas of the industry, with direct adverse consequences for a range of people and companies?

Or do you accept that, and say that you just don't see what happened as a problem?

As someone pointed out upthread the government could pay the public sector more but choose not to and, as taxpayers, we are shareholders in our public services - but the government chooses not to consult us on how our money is used. I didn't want to see banks collapse, but I don't like how things haven't changed since 2008 and how no lessons have been learnt.

If banking were a great 'success' banks would be producing great returns for their shareholders. They have not. Pick any major financial institution. Look at their 5,10,15,20 year performance and dividends. They have been pathetic. Meanwhile have a look at the directors' remuneration over the same period. Something seriously amiss..,,

What1 "That's why i also believe in bonuses and higher salaries because it means that more 'ordinary' bankers can earn more instead of shareholders just keeping all their money."

What1 - I'm very interested in this comment because I've not come across this. And what do you consider an "ordinary" banker, I'm not sure what that means.

The government does not pay bankers so why should they dictate what they earn?

Without government intervention, all banks even Barclays, would jhave gone to the wall in 2008. They want free market economics when the times are good and Keynesian economics when things go wrong. If the banks had paid out 20 % less in bonuses and dividends from 2004 they wouldn't have needed to be bailed out or have needed quantitative easing to take place.

So essentially, yes bankers are paid by the government, they only have jobs because the government backed them. A good analogy would be that of the teenager, demanding freedom with one hand but asking for a £20 sub so they can go out with the other.

longtime Name calling is uncalled for when people are having a debate. Pathetic.

Besides that, my point all along is shareholders want to pay the bonuses and high salaries and so none should have a problem with the bankers salaries

If you bothered to read the thread , instead of jumping to insults, you would realise that actually our opinions compliment each other.

It is not individual personalities it's a culture an environment

You may know greedy people we all do but when that is such a collective drive ambition so often driven by high salaries entitlement occurs and this is what has happened once we bailed out the banks we should not have been paying such high bonuses but the government has played into this entitlement

What,

Do end shareholders want to pay bonuses or have most shareholders been removed from the decision taking process via misincentivised institutional investors?

Interesting fact: at the RBS shareholders' meeting prior to the ABN Amro takeover ( the final distaster for RBS), 93% of indivifu investors present voted against the takeover. It went through with 80% of institutions supporting it. Why do you think that was?

Butterfly What I mean (and I maybe misinformed) is that if bankers were no longer given their bonuses or higher-than-average salaries, then surely shareholders would just keep more of the profits to themselves and this wouldn't benefit the general public anyway. Atleast this way, shareholders and bankers like a PP's son all get decent pays.

whirlpool I have my opinions about the crash, but thats another thread. Though those found to be taking part in criminal activities should be arrested of course.

larry and my point remains...the shareholders ^still want to pay those salaries* so even if they are not perfuming well, its none of our business. Its like me owning a shop and paying my employees a lot of money. Even if they are doing a bad job and I continue paying them lot of money - its not your business because its me making the loss and me paying them. Not you.

larry My post was in reply to your previous post

I thought that many shareholders were pension funds, which are managed by people in the financial services industry?

I don't think that Bob who has 6 shares in X bank, and a small pot in a pension fund which has been sitting in a managed fund for Y years, really has much say in how much the management gets paid, in reality.

I find this argument that shareholders = lots of ordinary people and therefore lots of ordinary people endorse the renumeration packages a bit disingenuous TBH.