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Original poster

Bankers going to get their bonuses anyway

469 replies

jujumaman · 05/02/2009 11:07

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.

OP posts:
dittany · 05/02/2009 14:06

This reply has been deleted

Message withdrawn at poster's request.

MmeLindt · 05/02/2009 14:07

The basic question is

If the government hands over taxpayers cash to a bank/company to save it from bankrupcy, do they get a say in how that money is spent?

And if they do, will the politicians then be held responsible for any resulting losses due to bad decisions made?

Merrylegs · 05/02/2009 14:10

Point taken Bubbs. £2mill is a whopper! And I guess he has a lifestyle which expects that kind of dosh and is therefore cross when it is not forthcoming.

I am ashamed to say I have family in the latter category - which is so beyond obscene you cannot help but shake your head and wonder at the sheer chutzpah of it all.

TheFallenMadonna · 05/02/2009 14:10

Perhaps it should be an issue for the banks MmeLindt, rather than the governments. Perhaps they should say, hey - we've made enormous losses this year, we'd have gone under if it weren't for the billions handed to us by the taxpayers so perhaps paying over millions in bonuses isn't really a great idea.

But yep, let's bring it back ot the politicians...

Original poster
jujumaman · 05/02/2009 14:12

Brownsuga

Much as I am fond of my friend I don't think not getting £2m when you're on 250k is a disaster and I don't think you can compare it to a redundancy

This couple have paid off their mortgage. They have enough in the bank to pay their dcs' school fees. His wife, anyway, earns a fortune - not getting £2m when you expected it must be a bummer but the only impact it will have is they'll be unable to buy a country mansion as they'd planned for a few more years.

I agree if everyone else in your bank gets a bonus and you don't for whatever reason it would be a massive kick in the cojones. But when many from the same bank are being laid off, no one is getting a bonus and taxpayers are keeping you afloat then expecting a £2m bonus seems a bit ... greedy.

I just wonder what will happen next. Even if these guys are paid their bonuses, will it be possible to promise them such huge bonuses next year? If everyone's cut bonuses then there'll be nothing to jump ship for.

OP posts:
DaDaDa · 05/02/2009 14:17

No one who has been on a £250k salary for any appreciable length of time 'needs' a £2million bonus. Their mortgage should be paid off, and they should have savings. If their lifestyle needs to adjust because their employer is failing, then welcome to the real world.

Obscene. There needs to be a cap on bonuses for banks that have received government money/guarantees.

MmeLindt · 05/02/2009 14:17

How can you pay some employees huge bonuses while making others redundant?

DH's company are talking about a lot of redundancies but the top managers are taking the biggest wage cut so at least there is no bad feelings about that.

DaDaDa · 05/02/2009 14:18

X posts jujumaman.

thumbwitch · 05/02/2009 14:20

juju, that is discrimination, surely! Although I can't work out what sort - poorist, I suppose. Unreasonable anyway. Anyone worth their salt as a decent human would say no, I don't need that bonus, use it to pay 10 people their salary for another year.
Well, I would anyway if I was in that position.

Original poster
jujumaman · 05/02/2009 14:23

Sorry thumbwitch, what is "poorist?"

Even if you did turn down your bonus they wouldn't create 10 jobs on the strength of it, they'd just laugh at you for being a namby pamby sucker. I v much doubt any banker would be as altruistic as you, it's not in the nature of that culture.

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thumbwitch · 05/02/2009 14:26

no I know, I was being somewhat tongue in cheek, or ironic about it, not sure which.

Poorist = picking on the lower paid while still paying out to the higher paid.

Anyway, this topic gets my goat too much so shall bow out now.

georgiemum · 05/02/2009 14:27

As my old boss used to say - the axe always cuts down, never up.

OrmIrian · 05/02/2009 14:30

Hey wtf when the rest of us poor bastards get made redundant due to the screw ups in the banking systems I shall probably be relying on hand outs from the government too. For me and 3 DC. So I guess that makes us all equal

MadameCastafiore · 05/02/2009 14:33

Oh bloody hell - it is not the fault of every banker out ther just a select few.

And you should count your luck that they were bailed out or the whole economy would have gone to pot and we would have been in an even worse situation.

ilovemydogandMrObama · 05/02/2009 14:35

It's like privitization of gain, but socialism of loss...

thumbwitch · 05/02/2009 14:35

sorry, couldn't help myself - just wanted to correct something - I was suggesting that they could use the £2m bonus to keep 10 other people on rather than making them redundant, not create new posts.

as you were, I'm off now.

OrmIrian · 05/02/2009 14:35

Yes madame. I am aware of that. But somehow it doesn't make it feel any better.

BrownSuga · 05/02/2009 14:36

I suppose you're right then if it is not needed. In my mind I was imagining million pound mortgages that still need to be paid etc. I guess though 2008 started off well and it's only been in the last few months the crisis has hit. So perhaps a pro rata of the bonus should be paid for the 2008 year and going forward they should be capped at reasonable levels or become more truly performance based.

As an aside our company, privately owned, handed out bonuses this year (less than 1000 for the minions), while still making people redundant, only a few weeks after getting their bonus. With more on the way and my job and DHs at risk in the next couple of weeks. Our managers here, have seen nothing like it before, 30yr veterans in the industry. Everyone is reeling.

TheFallenMadonna · 05/02/2009 15:19

Ihave no problem at all with the bail out MadameCastafiore. Just with the use of some of it to pay bonuses.

expatinscotland · 05/02/2009 15:25

I feel what I've always felt: if you're going to be a capitalist government/society then be that - no bailouts of failing industries. Shit or get off the pot.

So I'm not at all surprised the bonuses will be paid out.

It's just as ilovemydog put it: privatising gain and socialising loss.

DaDaDa · 05/02/2009 15:34

"It's like privitization of gain, but socialism of loss..."

I like this too.

spokette · 05/02/2009 15:38

The financial tsumani that has engulfed us and destroyed Lehnmann brothers and decapitated Northern Rock was caused by the banks. You see, they thought that they were really clever and used securitisation to package up wonderful products like Collateral Debt Obligations. They thought it was an easy way to make money and to sell these packages to investors who in turn packaged them up again and sold them onto other investors.

They even created a market for their wonderful packages. They created mortgage products for people who should not have mortgages, i.e the NINJA market (no income, no job or assets). They offered up loans to people who should not have received loans. Did they care? Hell no, all they saw was lots of money for themselves because when these poor fools defaulted on their loans, it was nothing to do with them because they had sold on those loans in those nice neat packages called CDOs and idiots like those in Northern Rock bought thinking that they were manna from heaven and they were going to be very,very rich.

This banking crises was caused by greedy banks and greedy investors who knew exactly what they were doing and gave absolutely no thought to what would happen once the gravy train came to a halt. The people that the banks targetted with their fancy loans and mortgages were victims because the banks exploited their ignorance and desperation to get on the property ladder. The banks had the knowledge and they must take full responsibility for their irresponsible behaviour.

Now that the taxpayer has to bail these same institutions out, they still expect to be rewarded for their greed and incompetence. The payment of bonuses to these people is immoral, deplorable and indefensible. They are a disgrace.

Original poster
jujumaman · 05/02/2009 15:39

I still think the problem is with the meaning of the word "bonus". The rest of the world thinks a bonus is something to be earned and enjoyed in good times.

Whereas the banking world sees it as an integral part of their salary.

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MadameCastafiore · 05/02/2009 15:59

No spokette - not every banker made decisions that created the tsunami just some of them and the rest should not be punished.

My husband has done nothing but work very hard and make lots of money to ensure people are paid decent pensions.

OrmIrian · 05/02/2009 16:13

But madame, so have many other people - worked hard to deserve their (cancelled) pay rises etc. But most people (just read the thread) are not only not getting expected bonuses and pay rises, but even getting pay cuts. Regardless of whether your DH (and others) deserve bonuses, if the money isn't there it can't and shouldn't be paid. Other companies that are fighting for their lives are holding back, why shouldn't the banks?

The fact that it's the other tax payers, who may or may not be losing their jobs or their pay rises, that are partially funding the banks atm, adds another unsavoury dimension.