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.

The thing is that you can call it a bonus but if you pay it every year then it becomes custom and practice

It's not called a discretionary bonus for nothing.

Is it not performance related at all then? Or related to the success of the company? Because DH's bonus (and we are talking more in the region of OrmIrians's rather than OP's friends here!) has an element of both. SO I wouldn't really have any problem with a successful bank paying big bonuses, but paying them to people who work for unsuccessful businesses, from our taxes, is somewhat

But as I said earlier, that isn't happening int he case of the OP's friend, so I'm not sure why the thread is called what it is...

But clearly it isn't discretionary if - as LadyMuck says - it's part of the salary package. Or am I missing something?

You can see why I would have never cut it as a banker

FallenMadonna - sorryfor the confusion.

There is a link at the start of my OP to a story in the Times today about how RBS is going to be paying bonuses despite its ignominious bail out

Then I went on to give example of my friend who works for another bank, who may or may not get his but will sue if he doesn't.

I'm not sure whether I will be getting a bonus this year.

The bonus scheme does say it is discretionary and can be withdrawn at any time.

It is split into 2 parts, one which is supposed to depend on your performance alone and the other depends on how the company has done. The company has done really badly so we are expecting there to be no corporate element to the bonus.

The personal element though basically forms part of our salary as long as you reach the required performance grade. There is talk of them refusing to pay out that bit which I'll be really pissed off about as the corporate element is supposed to cover bad company performance.

It's nowhere in the region of banker's bonuses though!

Ah!

I can't see links so clearly now with the new format. They look the same colour and I just miss them.

Ignore me

Georgie, The thing is that by the sounds of it this guy is NOT talking about a discretionary bonus.
Discretionary bonuses are NOT promised. Often what happens in banking is that to get a top performer to change banks they are offered a "gauranteed bonus". That is a certain amount of money for a certain number of years and it is part of their employment contract. The reason for this is that a lot of bankers bonuses are paid in shares (of the bank) which they cannot sell for a certain number of years and they lose them if they leave the bank. So the gauranteed bonus is compensation for the loss they make by changing jobs.
IF that is the case then I guess he has a bit of a point.

greedy selfish cunts and that is my final word on the subject

Why is he telling you how much his bonus is/isn't? I don't begrudge him a well paid job (most of us would never do the hours they do to get to that position) but I think it's horrible to go discussing your remuneration with people who can't relate.

Yup, this pesky new format again

BTW is anyone having the same problem as me that they're logged out of mn every time they close the window, it's damn annoying having to log in every time I want to contribute.

But is is a BONUS, which sounds like the icing (and the cherry) on the cake.

To be clear, normally bonuses in banking are discretionary. Not getting a bonus or getting a v low one is essentially being fired.

He's one of my dh's oldest friends

And he wasn't telling him in a big swinging dick way, purely relating the circs.

As I say, our friendship with them works because although at times we are wildly jealous of their cash, dh and I make an effort to suppress this and remind ourselves how lucky we are, compared to many. We're very fond of them and just have a giggle and teaste them when they're being ultra bling.

My best friends husband works at RBS his department are flying high on the success - their own particular success - of last year - it would be incredibly unfair for him not to get his bonus because of the Boards decisions (mainly buying ABN).

And DH works for a bank and he is expecting a bonus because his funds are also doing very very well - he should be rewarded for investing your pension pot very wisely and having the responsibilty of your retirement on his shoulders whilst he decides where to invest billions each week.

And most bankers bonuses are a long way short of millions.

It is the top people in these banks who knew what risks were being taken and those taking those stupid risks that should be penalised not the other bankers who have kept away from all the shit and done their jobs extremely well.

The amount of the bonus is subject to discretion but in reality it reflects a market rate for the particular job/skills. Certainly dh is due a bonus on the basis of his contract, though in theory a nil award is possible. The salary package will vary slightly from company to company - they seem to try to avoid being directly comparable, presumably as a tactic in recruitment and retention. In his last company he was on a higher base but lower bonus. His bonus is more important in this current job, and requires a reasonable amount of negotiation each year.

He could be on a fixed salary I suppose. But the bonus does tend to concentrate the mind, and I suspect he works harder on the basis that it may impact his package.

Riven,
"its disgravefgul. They should be fined for the disaster. Not handed more money. Why get bonuses when they were shit?

Most of the bankers were no more responsible for what has happened than the guy who cleans the loos.

Also, it's worth baring in mind that although the figures quoted for bonuses often sound high, but this year many of the banks have been paying them in shares or in the crappy assets that they have on thier books. That way they don't have to hand over the cash and they get to clear up thier balance sheets.

But MadamCastafiore, RBS is only functioning because it was bailed out by you and me and all the other taxpayers. My job is at imminent risk of redundancy. So is DH's. No one is going to come along and bail us out. And our jobs are at risk because of the banking sector propelling us into a global recession. I don't see why it's "incredibly unfair" for your friend's husband not to get a taxpayer-funded bonus when many of those taxpayers are facing far worse issues than an absence of a bonus.

Agree with Madamec
Surely they should get performance related bonus ? That is down to an 'individuals' performance.
Otherwise you are blanket punishing the entire workforce for undeniable mistakes of the few.

Yes it should be performance based. So if a dept did well, they get their bonus, if another in the same bank didn't, they don't. Even if it is taxpayers money being used, once that loan is handed over it should be at the discretion of the company to manage that loan. But I think I'd be more discreet about what bonuses were paid to whom and how much, to prevent public ire.

From the friends point of view in the OP, if his bonus of 2m is EXPECTED and he doesn't get it, it will be essentially like a redundancy to him. Yes he'll still get his 250k salary during the year, but more than likely his lifestyle is based on the additional guaranteed 2m. His life could be very difficult indeed, and would be worth him suing to get it.

If it weren't for the bailout there would be no bonus and no job. I have no issue with businesses paying bonuses out of profits. I do have issues with paying bonuses out of taxpayers' bailout money.

Yeah but, there are bankers - and then there are bankers - and then there are bankers.

If you are in the first category, you are probably investing people's pensions and savings and, if you do so wisely, could reasonably expect some kind of renumeration to compensate a salary which, while peachy by most standards, is, frankly, monkey nuts to the Big Guys..

If you are in the latter category, you will get your bonus anyway because you will get a percentage cut of whatever billion dollar deal you are negotiating (arranging company buy-outs etc). You are an untouchable mega-god because billions begat billions. There are normally only a couple of you in each company. You are The Guys!

Then there are those in the middle who wish to be in the category of untouchable mega-god but whose banks do not make those kind of deals and therefore rely on profit which isn't happening. So your £2mill bonus may sound huge to others, but is in fact small fry in comparison to where you think you should be. So when you don't get it, it really really hurts. Ouch.

But we are already blanket punishing the entire workforce (all those people who don't work in the banking/finance sectors but whose jobs have been hit) for undeniable mistakes of the few. Why should banking/finance employees be exempt?

(And I do take the practical argument, really. But from a primitive "IT'S JUST NOT RIGHT" standpoint I agree with myself)

Merrylegs, a £2mil bonus is V large even in banking. This guy is not a mid-level wannabe.