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.

squiffy - a bit rude to refer to my opinions as bollocks. I think they are just not what you want to hear.

If you are a higher rate tax payer pre bonus you cannot claim to be badly off on a skimpy salary. Most well educated mothers I know with pre school children don't work as they would earn too much to have free childcare (or their DH would) but not earn enough to have anything left if they had to pay for childcare and commuting costs out of their salary. Therefore whatever their DH earns is what they live off until the children are school age and childcare becomes cheaper. (sometimes it may be the mother working and stay at home dad depending on who is the highest earner)

I have nothing against bankers. It is just frustrating to see bankers complaining that they are now having to put up with the same working conditions that everyone else (non bankers) is on, as if it is impossible to live on a salary of 30-40k without the additional bonus. I don't know what you imagine people in other sectors are earning but I expect most are on basic salaries of 50k or less unless they have a professional qualification and are doctors, lawyers, top accountants etc., or run their own businesses or at the top of their field (company directors, Headmistresses).

I expect the outcome will be that bankers are given higher basic salaries and less in bonuses as most people think the bonus culture has encouraged excessive risk taking which is one cause of the current economic crisis.

dorothygale..why did the banks and the government allow people to borrow more than 3 and a half times their salaries? It was madness. If the banks and govt had refused to lend such ridiculous amounts house prices wouldn't have risen to such high levels..maybe the government wanted the high house prices to make all that money in inheritance tax!

page62 if basic banking salaries are more than 80k why is anyone complaining about not getting a bonus?

Happywomble, because that's not very much for someone with those sorts of qulifications ect.

Oh..I'm going to retrain as a banker then (although am past 30 so maybe too old!)

Could you hack the hours? I wouldn't do the job no matter what they paid! Bloody horrible!

well RBS and the gov't just announced the bonus pot for RBS has been cut from £2.5bbn last year to £175m this year (it has to honor some of the contracts it entered into with individual employees). That is a 90% cut to the bonus pot.

The average banking salary is £35,500.

Average for a bank manager is £55,000.

Have just found another figure, that says the average salary in 'banking' (more general) is £21,000. Hardly a massive salary.

link here

A 'no bonus' rule would hit everyone, from the massively earning fat cats to the people on 18k, struggling to make ends meet. And I know many people have to manage on that, but imo it's down to what you agreed when you took on the job. Like taking tips if you're a waitress.

Bankers dont earn that much money I am married to one and he works for llyods please dont get the impression they earn thousands that is just the top dogs. £ 21 000 is the high end for average.

And my dh works bloody hard to get his bonus as its target related.

I think there is a lot of confusion as to what a 'banker' is on mumsnet. People are lumping hedge fund managers, high street bank tellers and investment bankers and other people in financials services into one big group.

The hours truly are horrendous as an investment banker - 20 hr days, working EVERY weekend, a couple of allnighters a week and holidays constantly cancelled at the last minute. No one with any experience is going to do that job for £80k a year, sorry.
Juniors in investment banking are paid less than minimum wage if you work it out hourly, they are all doing it to a) learn a lot b) get to the top of the tree eventually/ If the top of the tree is £80k no one will do it. You may argue that is a good thing but if you want a return on your investment it is not. Talk about cutting your nose to splite your face!

dorothygale - so true. Virtually everyone in the developed world benefitted from cheap money in the past decade or so.

More locallly (in the UK), people were also happy to enjoy the feeling they were getting richer as the knock-on effects of bankers' bonuses helped to boost property prices.

Um, actually quite a few people were really quite frustrated at inflated house prices, and bankers' bonuses were a contributory factor, especially in London and the South East (but also in places popular for second homes).

Susie, in theory, if no-one wants to do all-nighters for £80k, the industry would have to adjust. Maybe some investment banking activity would shift overseas. I wouldn't shed any tears. Let's get back to having a real economy based on actually doing stuff, not playing pass the parcel.

Edam, I think the UK ecomomy without the financial and professional services components would be pretty diabolical I'm afraid. It is a HUGE driver and I fail to see what other industries could replace that sector. If you have ideas though, I bet they would be very well recieved!

It's a huge driver because the whole focus of government policy since the 80s has been to promote the City at the head of a service sector economy. Unlike Germany, for instance, we decided manufacturing and primary industries were so not exciting or flashy or sexy. It's not written in the Wealth of Nations the the City has to be the be-all and end-all of the British economy.

Turns out all shutting down the mines has achieved is threatening the security of our energy supply - and we are about to discover an unhealthy reliance on imported food isn't too clever either. Maybe we should have been paying attention to primary and secondary industries and not fooling ourselves people in the City were so darn clever they could spin gold out of thin air.

It's a sector in which the UK has strong competetive advantage, unlike most of the primary/secondary industries that used to be relied upon. Do you really think the UK could compete as a manufacturing based economy (for eg) in today's globalised economy? I can't see why you would want to walk away from it rather than re-build it because of one unfortunate down-turn.

Edam - yes the inflated house prices were frustrating to those not on the all-important ladder, yet virtually the entire country seemed happy to think prices could only continue to rise, and that it was a good idea to take out a 125% mortgage to get their piece of the pie.

in this case, the have-nots are getting the last laugh, which imo is fabulous. (being a have-not myself)

Yes we need to keep our financial service industries but people would probably work more effectively if they didn't work 20 hr days 7 days a week!

It would be good if we could be more self sufficient as a country in other areas such as energy, water supply and food.

Other Western developed nations have hung onto manufacturing industry - Germany and France, for instance. We seem to have been unusual in our determination to get rid of ours.

France's economy is a study in disaster!

In countries where labour costs are high, as in the UK compared with say India or China, it makes sense to invest in industries that depend on a skilled labour force, rather than one which relies on manual labour.

Hence, the UK turning to financial services, which thrives on a highly educated creative group of professionals, supported by high end technological infrastructure.

That is not to say manufacturing or other industries should be abandoned. And indeed for diversification of risk and national security, it would make sense to invest in those as well.

I am just saying financial services is a good fit for the sort of people the UK's society and education system are capable of turning out.

Do not underestimate creativity and flexibility.

Speaking as someone who did not grow up in the UK and who now works in a global firm, there are cultural traits found in the British, perhaps in the way British children are raised and the product of the education system - but it produces thinkers and problemsolvers in quite significant numbers, as opposed to drones.