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.

Errr, greedy banks started with mess.

I know I am not clued into the subtlety of the language of investment banks. Does not detract from the fact that they started this mess, expect the taxpayer to bail them out whilst at the same time still receiving their bonuses.

So you don't know what happened nor who really was responsible, do you?

Would you like a recap?

Who was really responsible for this mess?

Hmm... well obviously absolutely nobody working in the finance industry

Another enlightened viewpoint

Oh glad to see I'm correct then.

CoteDAzur: You are really not doing yourself nor the bankers you wish to defend any favours by this witless point-scoring and the extremely smug and condescending tone of your posts. If you believe that you have some top secret information on what caused the credit crunch - and all those not allied to the financial industry with any credibility from Robert Peston to Vince Cable seem to be pointing pretty unwaveringly at the overly complicated financial shenanigans of many banks - then why not tell us rather than sit there sneering at those of us who never would have made it in the big, ballsy, super-intelligent world of finance ?

Incidentally, I note from your profile that you live in Monaco so presumably pay very little tax and presumably have not had to bail out your UK and US former colleagues at all. Do you think that may have some bearing on your sympathy for the sector?

hear hear lalalonglegs

Let's not forget that bankers (and not all those who work for banks are hallowed as such) pay taxes too, and would on any bonusses at higher rates. As in most big businesses it is those grafting hard and quietly, away from this minority at the top, whose salaries and bonusses hit such headlines, and have little day to day influence on policy who are most likely bear the brunt of the downturn and a government mandate.

only heard the news reports not read the thread. but they really should not be getting these bonuses

The reason why RBS and any bank which had to take state funds should not pay bonuses this year is simple. Without taxpayers' money they would be bankrupt. The banks simply do not have the money to pay bonuses - no matter how many hours people worked. The only reason they can do so is by redistributing taxpayers' money.

As for - why has the world changed forever? The previous model of financial deregulation and faith in the efficiency of markets has been proved to be misplaced. The concept that one could pass-on risk through securitisation and so that banks could survive on very low capital ratios has proven to be misplaced. Result? The City will have to accept more regulation, banks will lend less than before, will pay less to their employees (as they need to maintain higher capital ratios) and the financial system will be a smaller part of the economy.

Cote - you really cannot see the wood for the trees. You are so lost in your own self-importance.

I said :"And they were using phoney statistics with very phoney morals"

You said: Have you somehow discovered some incorrect data or is this yet another baseless prejudice?

If you take a look at some work by Phillip Tetlock who followed investment bankers and economists for over 10 years, you will see that the decisions and predictions they made were no more accurate than ANY other (non- 'qualified') person who made the same prediction.

So, as I said, all the crap you have written about it being an intelligent 'sport' where you can attempt to predict (even though you concede it is unpredictable ??!). You actually can't. There is no proven skill AT ALL to investment banking.

So get off your high horse.

You know, I hear lots of stories at the moment about people taking pay cuts to keep their companies going and their jobs.............some chance of people like you having a bit of humility and saying that too.

Only the deluded like Cotes believe that it was not the banks fault that we are in this crisis. So who was it Cotes? The pygmies on the moon?

Liz, you also need to remember that in most industries, when an organisation does not do well, bonuses are not paid, regardless of individual performance. It is only in the cocoon world of banks where this sense of entitlement persist for individual enrichment, regardless of overall performance by banks as a whole. It is high time banks joined the real world, especially when they are begging for money which largely comes from the mere mortal taxpayers who are, we told, not as clever or hardworking as those indispensable genius investment w bankers.

You can say it was "the banks" fault, but it certainly wasn't the fault of everyone who works for a bank. Many of them have lost a lot more than their bonuses, having had money tied up in shares int he company they work for and a good number have/will lose their jobs too.

Banks have many divisions and most of the ones in the RBS made good profits last year - the board screwed up big time, but many many "bankers" continued to do an excellent job in their own areas. When Sir Fred was appointed the press welcomed him as a hero and the share price rocketed, so it's a bit much for them to be so all knowing now.

Cote - you know very little about nursing if you think it merely involves taking bp, inserting catheters and being kind. There is a little more to it. (I'm not a nurse, btw, just irritated by your ignorant assumption that they are stupid drones while you and your banker friends are jolly clever chaps.)

does anyone remember that Ab Fab (I think) episode where Edina (I think) went into the Stock Exchange and started waving her hands around and share prices started to go mad - she was hailed as a financial guru for a while until one day she did a bad hand manoeuvre that wiped the value of the lot (everything came down to zero)?
I may not have all the details correct (for e.g. it might have been in French and Saunders, and it might have been Dawn French, not JS) but I have a strong recollection of the subject of the sketch - has always stayed with me.

OK, so the rule now is that people should be paid bonuses by the taxpayer if the company they work for is essentially bankrupt as long as the bankruptcy wasn't their fault?

Does this apply to everybody in all jobs that might not be getting bonuses or just those who happen to work in banks that were "too large to fail"?

If RBS hadn't been bailed out, where would the money for these bonuses be coming from exactly?

It's like listening to children: "it's not fair, I worked so hard, it's not MY fault that the country is fucked, I should get the money I was promised, please Daddy get the money from somewhere, I DESERVE it"

Absolutely pathetic.

Haven't read much of thread, but my DH works in a small international bank (it's not in trouble). There's rumours that they won't get any bonuses this year, but as his friend pointed out, this year their bonus is that they still have a job.

I don't understand why bankers and city types are being blamed for the credit crunch. It seems to me fundamentally unreasonable.

Imagine that you were playing Monopoly with your DCs. You get a set of properties. The orange set (my favourite). You start building houses on it. Your DCs land on the orange set, get bankrupted, and have a tantrum because they've lost the game.

But you were playing by the rules, right? Because that's what the bankers were doing. They operated in a very badly regulated industry. They followed the rules of the game.

If you are looking for someone to tar and feather - which seems to be what people feel the need to do right now - look at the regulators.

absolutely robberbutton - I mean, I wonder how many of the city bankers who have lost their jobs think it is right and proper that those who still have jobs also get bonuses? There is no amount of justification that can make this a fair outcome.

I work for RBS.

I think the bonuses promised to my staff will be paid because contractually they have to. But we are not talking mega bucks - maybe £5000 maximum for the top performers. These are people who have worked hard all year and were given objectives to hit. The incentive scheme was agreed - they've delivered - so they expect the payment (and yes, their family finances depend on it). As a manager my bonus scheme is discretionary and I presume I will get nothing.

Because we all believed in the company we work hard for we ploughed our money into the shares when encouraged to by the Directors. Now a substantial amount of staff have lost their life savings. Personally I've lost £10k of shares which were to fund my childcare for the next few years (pg with my second baby at the moment).

Every year we receive profit sharing of 10% salary - obviously no one expects it this year - but only realised that last Sept when it became apparent that the company was in trouble. Most of the ordinary staff I know rely on that payment every March for vital things, clearing credit card debt etc.

On top of all of this we are facing redundancies. No idea what will happen to our jobs over the next few weeks. I appreciate that is the same as lots of other people in other industries.

Just wanted to say as someone who can't quite work out how the hell she'll pay the family bills now or support the second baby she's having it is a bit sickening to constantly hear that all bankers are bastards and are getting what they deserve. Just wanted you to appreciate that not all people in banking are city boys drinking champagne and driving ferraris.

And don't anyone DARE say "life ain't fair, get used to it"!

Quattro - the "greens" were always my favourites. Didn't realise other people had favourites too

The money should only have been paid to the banks on the provison that the staff waived any expected bonus in lieu of the bonus of keeping their jobs. The head of merril lynch got sacked for doling out bonuses after they received tax payers money. his argument was that they would walk. Where exactly are they going to go at the moment - from rbs to barclays maybe or perhaps lloyds no I know northern rock. Every other business has employee that dont get bonuses if their bosses have made such bad business decisions that their business is about to fall of the edge of a cliff. Why should banking be any different.

poor industry regulations are no excuse for bad business decisions.

Tangent alert

the orange properties are best - not only is orange a lovely colour but it has a higher probability of being landed on, and the returns are good for the investment