Bankers going to get their bonuses anyway

[jujumaman]

here

I don't know what to think about this.

We have a friend who works at another bank that has been bailed out by a foreign govt. He was telling us this weekend that he's planning to sue because he may not get his promised bonus of £2m or so, and will "only" end up with his salary which is prob around 250k

I know bonuses are intrinsic to banks' cultures but how - in these god awful times - can £2m bonuses be justified. My friend says his was the only division of his bank which made money last year, so why should he be penalised for others' faults? My feeling is every taxpayer is being penalised for others' faults and someone who is still earning an excellent salary should graciously accept it and be grateful he still has a well-paid job. But my dh tells me I'm being naive and that bankers will carry on getting these vast bonuses just as before. Not convinced by arguments in article I've linked to. Anyone with more knowledge of the city than me like to defend my friend's position (I v much like him personally.

Agree, dare I say it... Thatcherism... That anything is for sale. Desire for everyone to own their own home, which I think socially is a good thing but the price... Reduction of public housing stock. Consumerism, which in turn did create jobs. Saturation of the consumer market (how many handbags do you really need or want or for that matter Chinese toys.) Iraq and Afghan wars. Lost of trust of the West. You bright sparks tell me?

Socially home ownership isn't a good thing unless you want a compliant workforce who is forced to work as long as possible, hardly the capitalist dream is it ?
The champagne socialists have yet again screwed it up by being as corrupt as the torries before them, time to give the Liberals a turn maybe ??

Only my opinion not researched but those that own their own home are more socially responsible. Care for their home, do not accept Gov handouts, aspire to good education etc.. or do you disagree?
Work isn't a bad thing being exploited as a workforce yes

I think the current wave of repossessions as a result of using the house as a cash point and remortgaging proves that home ownership and responsibility don't go hand in hand.
Some people would and could have perfectly happy lives in a secure rental property.

There is very little secure rental property in the Uk in the private sector. My friend has had to move 4 times in 4 years with 2 children!
We go back to the bankers and sub-prime market!
I wasn't referring to responsibility with money but to their environment. Sadly people have been sold a dream they cannot afford. it doesn't make them bad people, just bad with money.

chocdot clearly we are only working for our pansions after all money is all that matters. I'm not going to bother you with an explanation beyond that since I don't think you'd get it. I feel like we're speaking different languages but only one of us understands the other!
I'd like someone to come on here (?lawyer)and say whether banks can avoid paying bonuses ie whether there is a get out clause in the contract. I'm guessing by the nature of the word the answer is that they are discretionary and avoidable but the gov. (and some on this thread) want us to believe otherwise.
I don't believe that in the whole of mumsnet there isn't some one who knows the answer to that one.

Oh and I think there are a huge number of causes, the gov and crash Gordon's actions, the banks, the media for leading people on, our own stupidity (property only EVER goes up, I must be loaded my house earnt more than I did last year and that's such a good thing for society), etc etc

Well when considering redundancies the banks could make those who are preparing legal action if they don't get a bonus redundant.

One lawyer I know has taken on 145 new cases on behalf of employees who are suing for their bonuses.

And if they got made redundant for this they would also then have solid cases to claim for unfair dismissal.

Discretionary bonuses in theory do not need to be paid. But in practice, if someone has been told to go and generate £100 million in revenue for the business and promised, say £1m, if he does this, and if he then goes and does generate that £100m for the business then the bank is going to struggle in court to justify not paying him that bonus. Hence the huge rises in legal actions.

And the bank would be mad not to pay it anyway. All that happens if they don't is they get sued and they lose the person who made them a net £99m to put towards paying back the taxpayers.

"I'd like someone to come on here (?lawyer)and say whether banks can avoid paying bonuses ie whether there is a get out clause in the contract."

As S says above, it depends. There was a case where the bonus was upheld. Will depend on various factors.

The more bonuses paid the more that 40% (41% if you add on NI) of those bonuses goes to pay the unemployment benefits of all the newly employed from the tax on those bonuses.

I was talking to someone this week whose relative made £900k for their bank one day in the last few months. Would be pretty cross if the bonus weren't paid.

Where they are discretionary if there is no risk people will walk or set up on their own (and the risk is definitely less as there are fewer jobs) then they could risk changing the remuneration structure.

But how much did he lose on the other days?!!

Actually bonus' are always at the companies discretion, I saw somebody get sacked and try to sue the company for the £60k bonus they were meant to pick up the next day, the company stopped the bacs payment which must have meant the MD made the call to the bank to recall it, nobody else could have done that.
He went to court and lost.
I've also known people achieve target but say be late twice in a month and not be paid bonus.

What I cannot fathom out is how the geniuses who run the banks are able to pay thousands to accountants to help them evade paying taxes but these same social shirkers claim that they and their employees have to be paid their bonuses because it is in their contract?.

I see Lloyds is now looking to payout £120m to its staff in commercial banking. Don't they realise that without the taxpayer's injection, there would be no bank, the employees would have no jobs and bonuses would be a mute point. I don't care that Lloyds say that most of those getting the bonus earn around £17k. IMO, their bonus is the fact that they have a job, courtesy of the taxpayer!

Sometimes I think the world has gone mad!!!

As a Lloyds TSB account holder I am furious that they took on HBOS in the first place.

If the government give any more bailouts without the bonuses being temporarily scrapped they are stark raving bonkers.

As I have said on this thread many times you cannot expect to receive a bonus if your company has made a loss however great your personal contribution has been.

I used to work in a sales environment making a considerable amount for my company in the media industry. I expected to be paid a fair salary for the job I was doing, and a bonus if I made my targets and the company was solvent.. Lloyds TSB appears not to be solvent so how does anyone they think they can afford to pay bonuses?

LLoyds TSB know the government won't let them go bust so they think they can get away with giving out nice handouts despite their terrible results. Luckily I only have my current account with them and savings are elsewhere.

PS I will try to persuade DH to move our account to the co-operative bank who I've heard are a lot more ethical.

Good idea happywomble I would too but I'm with First Direct and they have been really good. My first account was with Lloyds that treated me so badly that when I moved home with a new job (They messed up the move from one bank to another)I don't think they cared as I wasn't earning them enough money. BUT then I did their loss.
P.S I would not touch internet banking. I know for a fact that it cannot be made secure.

Have just emailed my MP (tory) for the first time ever, on the subject of the banks. Wonder if he will reply?!

What have you said?

I have been fascinated (and amazed/appalled) to read about the companies who are paying existing senior employees 'retention bonuses'. The theory behind this payout is the companies need to ensure they hold onto their top 'business brains' because it is those people who have the vision/intelligence/skill to help navigate out of this mess.

My first thought is...hmmmm, so these people often get contractual 'signing bonuses', are then paid their salaries + bonuses, and now can possibly receive retention bonuses? Seems ludicrous to me. I also wonder where all these 'talented' people (who must be retained) would go work in this business environment. Can't think there are many firms hiring atm, and certainly not (I would think) at high salaries.

In a free market people pay what they have to pay to get people. In some areas salaries are dropping or there are no rises. Plenty of people are still making money - volatility in markets gives massive opportunities which are not normally available so they will set up on their own if they have to but we may well want to take that risk with them, particularly those organisations we now part own as tax payers and I see today's news that the tories qwant in the state owned banks to cap bonuses at £2k and say you only get your share options when there is no further state support. Brown will have to follow suit given the mood of the nation.

£2k is still quite generous considering they are offering the Northern Rock shareholders £0.

At least the tories are pushing the govt in the right direction on the bonuses.

I haven't read the whole thread, and I certainly think the 'bonus for risk' culture is wrong, and the 'fat cat bonus' too.

But I know someone who works for Lloyds, and who has had to work all the hours God send recently - most evenings working till past-midnight, working full-time in the office on a part-time contract (with 2 small children). The banking mess is not her fault, and her salary assumes she will be paid a bonus. Does it seem fair to penalise her financially for all the hundreds of extra hours she has had to put in over the last few months, not to mention the additional childcare which has had to be paid for, in order to get 'media-friendly' news-releases? Bear in mind that lots of previous bonuses have been paid in shares, so lots of loyal employees have already lost hundreds/thousands of pounds.

Well I know people who worked all the hours god sent to keep Rover open and guess what? They lost their jobs anyway. Without taxpayers cash, your friend could very well be out of a job.

In any other industry, there would be no taxpayer cash (e.g. look at those at Mini who are losing their jobs) Why bank workers think that just because they put in extra hours (as if they are the only ones in the world who work extra hours) they are still entitled to a bonus courtesy of tax payer, many of whom will probably lose their job this year, is beyond me.

If there are no bonuses paid in state owned/controlled banks all the good people will leave, that is the reality. As a taxpayer I would like to see a return on my investment and therefore belive bonuses should be paid to the top performers.

Let them leave, especially as there are many of them looking for work anyway.

There are many industries where there are a lot of valuable employees who do not earn bonuses. What is so special about those in banks that they have to be paid a bonus anyway? I get the impression that bank workers will only work if there is a bonus. There is something seriously amiss with that attitude.

Well my DH worked till 10:30pm every day last week, he has achieved his objectives for the year and has heard that there will be no bonuses in his company (not a bank). Is he going to leave and work elsewhere? No. He is loyal to his company and is happy working there. He is just glad to have a job in the current climate.

I am sure there are new bright graduates who would rather work in a bank than macdonalds and will apply for any vacancies that arise in Nationalised banks.