Anyone have the energy to discuss the Goldman sacs bonuses?

[1dilemma]

I heard this as I was running out of the house so I'm not giving super accurate figures, it's over 100,000 pounds on average isn't it (and no doubt to be replicated in many banks), nurses have been capped below inflation for 3 years I believe (admittedly a poor decision by their leaders but....) and over 25,000 Woolies staff are loosing their jobs. In the light of the global financial situation and the gov bailouts it's not really OK is it?
I feel for the poor Woolies staff, what a time to hear such news.

There's very little correlation between how hard you work or how long your hours are and how much you are paid in this country. Plenty of poor people work bloody hard for many hours.

Is Goldman one of those firms which has a policy of getting rid of 10 per cent of its staff every year?

apparently so yes according to dh's friend who works for them.

I think it's also worth remembering that if someone earns a £100k bonus, £40k of that will be paid in tax. So if you stop all bonuses what impact would that have? Given millions of pounds are paid in bonuses every year, who is going to cover the shortfall if they're all stopped?

The sort of person who earns a bonus of £100k or more is VERY likely to have all sorts of tax dodges/tax efficient schemes to avoid paying their fair whack. (I mean, fair as in lower earners have very little chance to avoid tax.)

I would love a job where your hard work is appreciated by way of a massive bonus.

Wannabe, they might have to tighten their belts like everyone else at the moment.

Is it just mainly financial companies that shell out huge bonuses? And is it every year?

It might feel more irritating, but as they have had no government bail out money, I don't think their remunerations packages are anything to do with us quite frankly. Yes it's terrible what's happening to other people but if this particular employer has enough cash flow to pay bonuses and/or considers them a judicious investment in staff as a major asset, I don't think anyone else is in a position to moan about it really.

I am entitled to be cross. It's my pension and endowment that is ultimately funding these bonuses - if everything's so hunky-dory, how come I'm not getting huge returns on my investments? And neither is anyone else with a pension or endowment?

I don't think it is hunky-dory though is it? I expect these bonuses are less than they have been in the past. They are a commercial operation and it's up to them how they spend their income, distasteful as some may find it.

Edam I think it's a very small proportion of people who are earning at a level where they are avoiding tax. Anyone who is on a PAYE contract is paying tax at the same level as the rest of us. And even a 100k bonus might be a 100% bonus to someone and it's unlikely he/she is avoiding tax.

The only exception tends to be the managing directors who receive part of their bonus in shares, but even this comes with a risk - imagine getting your bonus in shares last year and then watching the markets crash.

Crackfox i wasn't referring to the impact on the individuals I was referring to the impact on the economy.

Say 10000 people receive a £100k bonus (it probably isn't near that many but I'll use that figure as example), out of the £1 billion paid out in bonuses, £400m will be paid out in tax. If those bonuses aren't paid then there is a £400m shortfall in the tax system. Who is going to cover that shortfall? What services are going to suffer as a result of that shortfall?

A bonus is not an entitlement - it is by definition a bonus. However if companies are not relying on the government to fund them then they have the right to pay them.

flowerly - well put. In both your posts. What i was thinking, but said more eloquently.

Goldmans don't administer pensions afaik - they're an investment bank. Yes, it's possible that they trade shares or issue securities that are in people's pensions, but there's no way they can take money out of someone's pension pot (or endowment) to pay their bonuses - it just doesn't work that way.

Yes, huge bonuses are how it works in the financial sector. There used to be a lot of interesting tax dodging options on bonuses. (At one point, people got paid in gold. ) Not so much now - the government has sensibly closed those down. At the £1M bonus level, there may be some options, but at the £100K - no. (Or maybe at £100K they get £15K of shares - which vests in three years, so they only get the money if they stick around, and it's only worth something if the shares are worth anything then!)

No, I never said they administered pensions, but pension funds are the largest investors in the stock market. That money that Goldman's plays with is our pensions.

Yes - but Goldman's doesn't try to make the stock market go down - granted, they benefit from liquidity and movement, but up is better for them than down.

No, my point is the money they play with belongs to ordinary people. They get multi-million pound bonuses, while pension funds tell us life's hard, your money's worth less and we are having to shut our final salary scheme.

That money seems to be making Goldman's rich, rather than the people who saved it in the first place. Disproportionate rewards.

There is no relationship between what Goldman Sachs employees earn and what nurses earn and what is happening to Woolworths' staff.

Everyone on this thread realises we live in a capitalist society don't they?

Edam, to be clear here, Goldmans 'plays' with very little of our money - they have a relatively small balance sheet and comparatively very limited funds, and the funds which they do run are invested in by other funds (not by individuals). The pension funds, insurance funds, investment funds and commercial banks are the ones that 'play' with our money.

Goldmans, along with many other companies, does also advise these funds how to invest their money but ultimately the decision on how, where and when to invest is taken by these funds. If they are losing money (and our pensions) it is the fault of these funds - I entrust my money with, for example, Clerical Medical, and expect them to deliver what they promise and it is their responsibility.

Golman Sachs were bailed out by the American Government.

By KerryMum on Wed 17-Dec-08 23:28:29 "they're all arseholes.

In the old days the government didn't bail them out and they flung themselves out of their office buildings

as they should"

Can I just say what an uttterly horrible thing to write. Do you seriously think that people who work in companies that haven't hit the skids should all top themselves? Or anyone else who's not on the breadline, for that matter? Jeeez.

So what about their bonuses? - this company hasn't been bailed out and it has no correlation with nurses / Woolies. Believe me, every person at GS who is getting a bonus is thanking their lucky stars because they've all seen at close hand what the alternative could so easily have been. I expect most of them will be investing their bonuses VERY prudently so in the very possible event of them facing redundancy next year they won't be in a position whereby they have to sponge off the state.

FFS the very obvious hatred displayed towards people with money by some on this site is foul. Money doesn't make people bad, you know, rich people still can have values. Try watching that Secret Millionaire thing if you need it demonstrated to you.

Criticising inequality and disproportionate rewards is not the same as hating people with money. That kind of exaggeration is a cheap debating trick.

And people who have lost their jobs are not 'sponging off the state'. You are the one who is displaying contempt.

"FFS the very obvious hatred displayed towards people with money by some on this site is foul"

Yep. Really makes me angry too.

Edam, it's not just on this thread, where people advocate hunting them down with tigers and saying they should kill themselves, but all through MN.

Bamboostalks: Goldmans were not bailed out by the US government. They were, to use your term, bailed out by a US$5 billion investment from the privately owned investment group Berkshire Hathaway, run by Warren Buffett.

And all through MN you get threads slagging off people on benefits.