Bankers are bloody getting away with it.

[julesrose]

unlimited bonuses and this crappy government can't / won't do anything about it.

I think I'll move my bank account to the bank who pays the lowest bonuses. Anyone care to join?

"these guys have contracts and a specific means to decide remuneration.

as they refresh staff, they can change that package, or tweak it within the terms of the package.

but they can't just bin those contracts once signed."

The govt are trying to retrospectively change the contract terms of thousands of public sector workers though. How can they do that? Those workers signed contracts too.

As I understand it, it's not just about where the head office is. Trading in the UK is favourable because of the timezone.

Is the UK that competitive when it comes to taxes (for banks). If so why haven't they all shipped to Ireland already? What is keeping them here?

The govt are trying to retrospectively change the contract terms of thousands of public sector workers though. How can they do that? Those workers signed contracts too.

whatever they are doing there has to b lawful...there is presumably a procedure to follow..usually set down in the contract itself....

It will be lawful because the govt are trying to change the law so they can do it.

If they get away with it it will mean contracts will be worthless.

Iggy, the UK timezone is an advantage but a european timezone 1 hour ahead wouldn't be a dealbreaker.

I think the problem for large investment banks is that their operations are quite complex so it takes a while for them to analyze new sites/tax/law etc. The staff are reticent to leave with children in school etc. So there is considerable inertia.

Its noticeable while banks have typically only reallocated a few staff overseas, many hedge funds have upped sticks completely. They are smaller and far more mobile operationally.

At this point, investment banks and HFs are in a much better position to move if required. The've had a year to prepare business plans. Motivation is now higher than before since staff have experienced the 50% tax rate. EBT/EFRBS loophole has been closed. FSA bonus restrictions are getting quite punitive.

Also other countries have been approaching IBs and HFs with attractive tax deals. Some Swiss cantons have offered 10-15% flat income tax rather than 20-30%. Spain has been offering 20-25% income tax locked in for 10 years. Germany also but not sure about the numbers. It seems a quite competitive market for tax revenue!

I doubt moving your bank account will do any good - the big bonuses are mostly paid to traders etc in the investment banking businesses (e.g. Barclays Capital), which does not have much to do with the high street retail banking operations.

I really don't care much about who gets what bonus. I left the City because I hated the culture and environment and wanted to do something more useful with my life - I'm paid much much less now but am happier and content with my situation. What someone else gets paid really isn't my business and doesn't affect me in any way, and I don't see the point in getting wound up with anger and jealousy about it. There will always be people who get more than you, or more than you think they deserve.

Ephiny I am not jealous. We are well off. We pay the 50% tax rate and that's fine. I think after the shit that the banking industry has put the whole economy through they should be bloody ashamed of themselves and not rewarding themselves.
The fact that without help from the taxpayer and the government they would probably be all without jobs should be taken into account before they pat themselves on the back with huge bonuses.
I am angry becaues through their business of selling shitty mortgages etc etc they have left a hell of a lot of people in real dire straits (and yes they shouldn't have bought them, but the fact is you often trust 'professionals' who advise you).

But Ephiny I am glad you are feeling happy with your life and the lives of others don't affect you.

If moving my bank account won't do any good then tell me what will?

Thanks siasl that's interesting. So what made them set up here in the first place and do you think a small tax increase could make them move or would it have to be marginal? There was a big hooha about the 50p tax rate but it wouldn't make much difference to the big earners (as only an extra 10p in the pound plus I bet their basic salaries are not that much compared to their total remuneration anyway). Capital gains tax didn't result in banks leaving. Take the point on HFs.

To be honest, I'm not sure there's much you can do, it seems to be that whatever restrictions are put in place, loopholes and workarounds will be found so people still get the payout they expect. When the latest restrictions were brought in (the 'supertax' on bonuses over 25k) at our place at least they just reduced bonuses and introduced a new 'fixed additional payment' of similar amount to be added to our salaries to compensate for it. As it technically wasn't a 'bonus' (they have whole teams of legal and regulatory people working on the exact terms to use so the loophole is watertight) it wasn't subject to the tax.

That's why I feel the best thing is to leave them too it (and the overpaid footballers etc), and be thankful for what you do have instead of worrying about others having more than you and everything being perfectly 'fair' (as generations of mums and teachers would tell you, life isn't fair!).

Iggly, remember it isn't just the 52p tax rate (NI goes up to 2% in Apr). Added to a zero personal allowance, a banker on a £250k salary is around £20k worse off.

It's the other changes that cause people to consider leaving. Tax relief for pension contributions limited at £50k and a max pension pot of £1.5mm. The tax avoidance loophole of EBTs and EFRBs have been closed this month. So compared to last year, when bonuses could be realized almost tax free or at a 10% haircut, for some it will feel like bonuses have halved. Also remember the UK bonus pool has dropped from £15bn in 2007 to around £7bn this year, so the pre-tax amounts have fallen 50% anyway.

Moreover, bonuses are being paid in 60%-80% stock (rather than 30% in 2007) and deferred for longer (3-5 years rather than 1-3).

It's a big disruption to your personal life to move country so it requires a big carrot. A 10% or 20% tax rate elsewhere is starting to do that but it takes years not months. People are leaving slowly but surely.

It's none of the governments business what private businesses choose to pay their employees! If the government wanted to be able to control the bonuses paid by the banks that recieved bailouts, they should have got a legally binding agreement to that effect before they handed the money over.

I work for a bank and I get the "your bonus's are ridiculous" all the time at work!

Little do they know that we are all given ridiculously hard sale targets which are near impossible to reach and even if we do hit them the bonus given is not worth all the effort. For example, I finished last year with 256% of my target and got the massive sum of £150 for all my hard work!!!!!! I don't even work for a bank that had to bailed out by the government its still privately owned but because of all the media they feel they cant give us any more but still think that its alright for them to increase our targets each year!!

I have to stop myself from shouting at customers and pointing out that when they are discussing bank bonus's on the news they are not actually talking about branch level staff but are actually talking about the 'big boys' at the top.

Last year someone came in and asked for the manager to move 'his' BMW because it was blocking him in. I pointed out to him that the manager was in fact female and unfortunately on a managers salary I can't afford a BMW and I come to work on the bus!!! Another misconception of the general public is that all bank managers are male and that we all get paid vast amounts of money (A managers starting salary is £16K!!)

I also have to point out that majority of the people that complain to us at work about our bonus's are in fact people that have never done a days work in their life! So it is beyond me why they are so concerned over the amount of money the banks have lost, non of it could possibly of been theirs!!! Or do they think that had the banks not lost this money they would be entitled to more benefits?!!!

Hi etta

An ex of mine is a bank manager. Some of the stories of the muppets she dealt with on a daily basis would make me laugh and on occasion cry with laughter!

I take my hat off to you for having the patience to deal with them.

I guess in that context I don't have to remind you how stupid certain part of the populace are and blame the banking industry for their reduced benefits because they are too stupid to look beyond the red tops.

Etta there might be some eejits who blame branch level staff.

However most of us are intelligent enough to realise that as you say, it is the big boys at the top who are monopolising the money.

£150 a year isn't something most of us would begrudge you.

It's not what this is about.

The threat to move staff overseas is specious and will not happen.

Even those hedge funds that have gone have often only moved very senior people the operations and some trading stayed in London. Its the highest paid Directors and bonus earners that are making the move or threatening to for personal tax reasons in the main. For anyone under £0.5 million per year though it is a marginal decision if you have DCs in school, and settled in the UK to move the move to Switzerland or Frankfurt.

I used to work for a commodity trading firm and our head office was Switzerland, taxes were quite legally paid in Switzerland but 95% of the traders and operations and finance staff sat in London and New York. Only the top people were in Switzerland for legal and personal tax reasons.

If someone in a bank that didn't take govt bailout funds, works their way into a senior enough position to be eligible for millions in bonuses, then fair play.
They pay their taxes, the govt will get half anyway.
sick of this whole topic and the ignorance behind it.

I've worked for banks and building societies and IME it is only the top people who get paid these big bonuses. Their employers recognise that they have certain skills that are valuable to the company and pay them accordingly. They are usually under a lot of pressure and work long hours (including weekends)- not saying the bonuses are right but if someone values them that much and are willing to pay them - they'd be a mug to turn it down.

Banks (not BSs) are owned mainly by shareholders. If you really want to have a go about it - buy some shares and attend the AGM's and ask specific questions about the bonuses. As a shareholder you have a right to question what is happening to the profits of the company that you are part owner of.

Building Societies are 'owned' by their members - same thing - you have a right to attend the AGMs and ask questions.

Eric Daniels - the Lloyds boss who is about to walk away with a £2m bonus is a horrific example of these ludicrous payouts. This is the man who did the horrific HBOS deal and bust the bank, yet still apparently deserves a bonus.

They say that he deserves his payoff because he has brought the bank back to profit. Well off you fuck sir, anybody else who had spectacularly bust a company would have lost their home, their livelihood and their income, and would never in a million years be paid a bloody bonus. They would be lucky to have food on the table. I hope he can sleep at night while his organisation is simultaneously re-possessing properties and putting people out of their homes partly because of bad decisions he personally made. Yet he walks off with £2m on top of his £1m paycheck? Inequality rules.

The government are over a barrel with this disgusting lot and need to gain some control over them. The added tax on the bonuses would have been a start, but truly the solution lies in breaking down their power.

In a way, the bankers getting their bonuses is good because they'll pay 50% tax on them, whereas if the banks retained that money, they'd only have to pay 28% corp. tax.

Plus, what the bankers don't spend in tax, they'll probably spend in restaurants and shops.

Yes, so all the lowly people can serve them

Inequality is good for nobody. Greed is a very unattractive characteristic.

And just for clarity on what it is this government have done to persuade the banks to show some restraint with their bonuses.......

During his appearance before the Treasury select committee on 11 January, Bob Diamond, chief executive of Barclays, was asked if the Prime Minister or the Chancellor had urged him to "show restraint" over his bonus (reported to be as much as £8m this year). "They have not," he replied.

NOTHING !!

Haven't read the whole thread OP try the nationwide they are a building society.

Just another point as I get infuriated with the counter arguments to taking measures to changing the bonus culture....

Psychology is quite clear that pure monetary rewards for individual work, such as is set up for bankers / sales people, is the worst way to incentivise people for productivity. Making the work rewarded at an extrinsic level takes away any of the "just for the hell of it" enjoyment people get from jobs.

It is totally the wrong way to get productive workers, and so there is even justification on that level to change the bonus culture.

Greed is a very unattractive characteristic
Really? Last time I looked, the highly paid footballers don't seem to be short of young blonde ladies throwing themselves at them.

niceguy people assume that footballers are motivated by passion, ambition, enjoy what they do etc. Not that they are purely motivated by greed.

And I believe that young women who throw themselves at footballers are generally not well thought of.

Of course greed is unattractive, extremely so.