Should Lloyds pay a bonus?
On 13 October, after receiving significant financial support from taxpayers, Lloyds TSB said this: "Although they will be entitled to take cash as an alternative, Lloyds TSB will ask executive directors to receive their 2008 bonus entitlement in Lloyds TSB shares. These will be subject to a restriction on sale until December 2009."
In other words, the board of Lloyds - which is now called Lloyds Banking Group - expected to pay substantial bonuses to the bank's most senior executives in respect of their performance last year.
There are five of these executive directors, led by the chief executive, Eric Daniels. And their aggregate entitlement to bonuses will run to millions of pounds.
As of now, Lloyds still intends to pay this bonus.
However, Lloyds' board has a few weeks to decide whether to press ahead. What should it do? Should Lloyds' executive directors be paid a bonus?
The executive will feel they have earned it - in that the financial performance of Lloyds TSB, before it bought HBOS, was quite a lot better than that of many other banks.
Also, Mr Daniels and his team will feel they've already made a sacrifice, by agreeing to take the payment in shares that can't be sold for a year rather than in ready cash.
But paying any bonus in any form to any banker right now is contentious, to put it mildly (see my assorted notes of the past couple of days).
And at least one reason for not paying the bonus to Lloyds' directors is that the bank's recent share price performance has been lamentable. As I've pointed out many times, it's tricky to pay fat rewards to managers of a business when the owners of said business are being mullered.
That said, part of the explanation for Lloyds' weak share price is that it recently bought HBOS, which has been incurring horrible losses on loans to companies and is expected to suffer further as mortgage borrowers run into difficulties.
Lloyds would argue that it was doing the world a favour by effectively rescuing the battered owner of the Halifax.
But Lloyds didn't buy HBOS as an act of charity, even though it was encouraged to do so by the prime minister and the Treasury. Eric Daniels expects to make good profits out of HBOS in years to come.
So if the City has become nervous of the risks in turning HBOS around, then it might be sensible for Mr Daniels and his team to show restraint on pay and cancel their bonuses for 2008 - in the hope and expectation that they can prove in years to come that their confidence in the benefits of the takeover were well-founded.
Oh, and then there's dirty, grimy politics.
Taxpayers own 43 per cent of Lloyds, via the state's shareholding which is managed by UK Financial Investments.
Although that's not majority control, it's big enough to veto any substantial decision that Lloyds might want to take. So if Lloyds' board decides to pay substantial performance-related wonga to Mr Daniels and his senior team, that puts on the spot those who are looking after the taxpayers' shareholding.
Which means, as if you needed telling, that the prime minister - who made his reputation in the early 1990s as the scourge of the so-called "fat cats" - will have to decide whether Eric Daniels and his team deserve a few million pounds of bonus.
The partial nationalisation of the banking system is generating all sorts of intriguing new challenges for government.
I'm 
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dump 'em like a sack of potatoes
build replacement uk institutions
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This bonus culture from management upwards to boardroom is crazy - it is the workers/braves doing the work, meeting deadlines/sales/targets that are the ones whou should get some recognition.
Some managers have no idea what it takes to get the job done and create unrealistic targets/deadlines and in meeeting those deadlines get 10%+ bonus whilst the worker gets nothing.
With the banks now part owner by the government and joe public, they should not get a performance related bonus for the short term target they met especially when long term it is unsustainable - wrt Credit crunch/toxic loans/etc.
Anyway, hasn't the goverment got a bad bank in Northern Rock?
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FAO: HunkieDunkie
Re our little RBS Share Price wager from a couple of weeks back - just drop 3 of your finest pounds into the next charity tin you pass by and we'll call it quits...
As for the bonuses, their share price pre-merger fell just like every other bank, affecting thousands of pension pots just like every other bank.
No bonuses in the banking sector are justified during this period of uncertainty, but the government do not have the strength to stand up to the banks and tell them this.
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Many business people who have sat across the table from a funding bank or venture capital player will no doubt have experienced the accusations of shamefulness and outrage that have greeted any management team expecting a pay rise or bonus in the midst of sub-target performance. The fact the banks are not just ignoring the taxpayers but now being so hypocritical would not be credible but for its actually happening.
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Robert I think you know what the sentiment is on your blog: No bonuses, full stop.
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I can't pretend to know enough about the details of Lloyds' finances to judge this particular case. I know the question is complex, but my prejudiced view is that bonuses look and smell bad to those of us who, working hard on lower earnings, are financing payouts to the rich.
Nevertheless, I'm not comfortable with the idea that bonuses shouldn't be paid to those running companies whose share prices have fallen. Market sentiment is fickle at any time, and has been swinging from irrational exuberance to blind, indiscriminate panic for years. To reward directors for rising share prices when investors were over-optimistic was mad - but it would be no more rational to punish them because the same herd are now negative.
Share prices are no guide to anything.
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Stop messing about worrying about what to do with these bonuses.
Given the damage the financial sector has caused, just legislate for a 95% tax on all bonuses over £2000 in the financial sector.
Then get on with staving off the depression. Print money, lend directly to businesses, get on with public works (infrastructure, housing etc). It's really starting to get urgent now!
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It's an easy decision for me even as an ex LTSB employee. None of the UK Banks should pay bonuses to management of any grade. The bankers need to show some contrition. They have lost small shareholders and large alike a lot of money. Similarly they are paying nothing on savings accounts and millions of ordinary people are struggling to make ends meet, so why should they still be cossetted.
Final point Robert. Lloyds may argue that they were better positioned than most but they were still making big losses weren't they ?. Daniels was no more in control of his Corporate bankers than anyone else, he was just a bit luckier which is amazing considering he has an American at his right hand !!
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The purpose of a bonus is to retain the services of 'good' staff - how is it possible to argue that the staff at any bank are 'good'?
Our pay rates need to be competitive in the global market for bankers. Quite apart from the problem that all of them are complicit in the global economic collapse one should also consider the Obama wage cap. So now UK ctotal ompensation packages need to be more than 350 K as that is all they could get in the US. So no bonuses and a pay cap seems most appropriate to me.
Or as one company boss put it 'there will be no more buns pushed through the bars of your cage'. It is obscene to pay huge remuneration when their policies have quite literally stolen the widow's mite! (her savings)
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Interesting view of fiscal responsibility! If you're a bankster, you can lose money and expect to be rewarded; however, if you're a customer, you can expect to be evicted, bankrupted and potentially be on the streets.
Obama was correct: screw down the maximum level of pay until it hurts. Yes, this is a form of revenge - but the maximum pay rate for banksters in the USA is still over 9 times what I can expect to earn.
Any argument that these people are the finest minds and need to be paid accordingly is just so much tosh. If they were that good, we wouldn't be in this mess and they, like pigeons, could still leave a deposit on a porsche!
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Having had a lot of dealings with Lloyds TSB recently as a Business Customer I have to say that they are an excellent bank, displaying insight, caution and an entrepreneurial spirit, and that they are an excellent prospect for any investor.
Their staff are motivated and excellent and the share price reflects the recent acquisition, which will stand them in good stead.
They deserve to be rewarded well for their hard work, especially since the shares have been battered they need to be given a signal that they are appreciated.
If anyone deserves a bonus, and a good bonus at that ....they do!
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Come on moderators !! or are you all in the green room ?
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No way!!
They should not get any bonus and HMG should use its effective veto power. Bankers and their greed are mainly responsible for the mess we are in. It is a very bad precedent to reward such abject failure.
We could all go down to Lloyds TSB and take our money out to show our displeasure. With interest rates at 1% I suggest that there is no point in lending money to banks. Drink it, spend it, put it under the mattress but dont lend it to banks.
Thanks for asking Robert
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A key problem with renumeration packages has been their short-termism.
Do a dodgy deal now, collect your bonus and then the deal blows up.
If Lloyds got a good deal out of HBOS, this will become apparent in time.
So there is no need for multi million pound bonuses this year.
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Nah... that era is over now, and they're too late. Bankers are a bunch of bunglers, and I can't make do with lower interest so they can get a gigantic bonus.
I mean, look - banks are just a web sites with some IT attached to the backend. Can't anyone just buy a bank on the Internet and set it up? It can't be hard - the computer programs do all the work, so forget bonuses.
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Another dilution of shareholders assets, both public and private, no thanks.Were these people absolutely blameless (maybe not as greedy),don't think so.Are'nt they the people that agreed to keep Hornby on for a year at an astronomical salary?
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More nonsense. Nobody should be paid a FARTHING in ANY bank. NOBODY.
It hardly matter that taxpayers own stakes, these are just the worst of the banks. But even HSBC / Barclays would have gone under if the BoE liquity schemes hadn't been carried out, which means that the risks associated with collapsing housing and commercial property markets now rest with us, the taxpayer.
The sense of entitlement to a bonus is mind-boggling. And just because markets go through different cycles, some idiot at some desk has made money for SITTING there and now demands a bonus. Right now its the turn of the bond traders. But is the Quantitative easing succeeds as authorities fervently hope, inflation will return and there will be the mother of all bond market crashes. The bond traders will sheepishl say 'ok no bonus this year and fire a few of us'. But this thinking is simply nonsensical and this is exactly the kind of nonsense that resulted in teh credit traders being paid astronomical sums in teh last few years.
Considering that most banks have lose their shareholders a DECADE of profits, it is fair to say that NO BONUS WAS EVER EARNED by ANYONE.
Riding different cycles is hardly 'skilled' or 'talented' and as a taxpayer i would like to see these 'talented' ppl leave for their 'better jobs'.
Lastly but MOST IMPORTANTLY, in the case of RBS / Lloysd, let's keep it really SIMPLE. Take 10 taxpayers or 100 or 1000 and ASK them if they would like their money to go towards ANY bonus for any employee. The taxpayers ARE the owners after all. Let's not forget, its all voluntary here and no one is forcing these 'talented' employees to work in these banks. They can like it or LUMP it.
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Enough.
The iniquity of these bonuses stops now. RBS is crippled. No one except us, the UK taxpayers, will lend money to it. The money we’ve given it exceeds the total of all tax paid by it since 1998. We, the owners, are propping it up while it hemorrhages money. And the bankers want a bonus from the company. Because they’re worth it. And our politicians are more worried about the PR than the actuality.
No. You bankers take a hit as an employee like anyone else. Stay and work your butt off to rebuild the company, and repay the taxpayer who is keeping you in a job. In no other “business” would the bits that make a profit be ring fenced for hefty bonuses when the company is effectively insolvent, the shareholders are wiped out and the taxpayer subsidises the loss making bit and takes on the risk of further losses.
It is time as a society to decide whether we will tolerate this behaviour and do nothing. If you feel moved, please click on a link below to sign an e-petition to 10 Downing Street. Politicians apply a multiplier of several thousand to each signature. This is your chance to be heard.
This one is a petition to stop the banks we are supporting paying bonuses. http://petitions.number10.gov.uk/Antidote/
The other is to windfall tax the bonuses http://petitions.number10.gov.uk/Taxbankers/
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It seems that Gordon's workload is increasing by the hour. Well, he did insist on having the job of Numero Uno so he might as well get on with it!
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This is pathetic beyond belief. What's the point of teaching children any kind of values anymore? I give up.
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The best and the brightest were never in banks in the first place. The scary kid with half-inch thick glasses who stayed after school to help the lab technician so he could get access to dangerous chemicals is probably a professor at Cambridge or Harvard, and the nerd who hadn't seen sunlight since his parents bought him his first computer at the age of 3 is probably working for Apple or Microsoft. It's the kids who were always telling everyone how great they were who went into banking, and - no surprise - their self-promotion skills got them huge bonuses and they're not prepared to give them up just because they've run their banks into the ground.
I won't comment on the politicians.
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I think we get it now Rob. Your last three blogs have just been echoing the thoughts your loyal posters have had for weeks.
Its like your reading our homework back to us.
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Two factors that militate in favour of paying bonuses:
1. is a corollary to the argument that they might otherwise leave. Surely it must be better for the economy to know that these bankers are safely confined within the Bank. Heaven help us were they to get loose amongst the last remaining bastions of Great British industry such as our whelk stalls or breweries.
2. Careful analysis of the performance of the Salt and Grit futures desk may well identify one or two brave souls who staked their careers on the weather and should now be justly rewarded.
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No obvious geniuses at Lloyds, the HBOS 'takeoever' was served up on a plate by G.Brown, and then rammed down their throats when they were about to gag on it.
Still, as you say, not as bad as some, who are lucky not to be looking at the inside of a jail, let alone wondering about bonuses.
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Pay bonuses? Absolutely not!!
How utterly ridiculous! If the great leader and his sidekick chancellor allow bonuses to be paid it will go down like a lead balloon with the electorate! THis is particularly so, considering what is being said by the Obama administration in relation to banking executive pay.
Have these idiots lost t complete touch with reality? We are living in a new economic era. The bankers have been caught with their pants down. The game is up and we all know it. Are they so stupid that they don't get it?
I would say once the post office and other new companies fill the gaps that the banks have left we should desert the banks forever. They are still screwing every penny out of vulnerable people - exorbitant interest rates on credit cards for those who can least afford it; slashing interest rates for savers while charging borrowes percentages many times over base rate.
Do the government and the bankers think that the British public are fools? Lets demonstrate to them that we are not! The public should march on the streets if the greedy nakers get a penny of taxpayers money to fund their bonuses.
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No, they should not get a bonus. I have had to sacrifice my dividend, whilst the government are getting 12.5% on our outlay. The bright sparks agreed to buy HBOS in a market where the asset book was dropping like a stone. I do not see why any bankers or civil servants should get a bonus. This should apply across the board. It is hardly as if there are lots of jobs for them to swag off to. The grim reality is that the savers and pensioners in this country are paying for everybody elses mistakes.
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These banking scum really are taking the Michael. Portable gibbets coming to the square mile soon.
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When will these people learn this country is sick of giving to the banks, we have gone into hock for the next 20 years because of them and now they want a bouns.
If Flash really wants riots in the street he will pay these people just one share or one penny in bonus, either will light the blue touch paper.
By the way Robert would it not be easier if you just printed a list of questions in one go, to enable Gordon to judge the mood, rather than dribbling it all out like this.
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Offer them shares, only redeemable a year after their contract ends. If the shares increase, fine, (unless the profits are false !)
NO bonus and NO fancy salary
These people need dragging into the real world. Politicians do to, but they are so far gone from reality that there is no hope with them, Broooon being the biggest culprit.
We need an Election now.
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Boy are you a sucker for punishment! Twice in a day,
Lloyds is a slightly different case but not that different.
As the new LBG is being propped up by the taxpayer then no bonuses should apply across the board until they no longer need the support.
Whilst it will surely be very unfair on most ex Lloyds employees, that taxpayers are propping up the new group cannot be overlooked.
No one forced Lloyds to resuce HBOS (did they?) - if they hadn't then presumably overall the 2008 performance of the Lloyds group would have reflected their previous prudence.
But the directors did and so delivered new company afloat only with taxpayer largesse.
I would expect the staff to be very upset at Lloyds and grateful at HBOS. Sure they have internal processes to feedback their displeasure to their directors.
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Can you please cover something other than these wretched inept banks. There is more to business than banks. Or is the BBC now the Bank Broadcasting Corp.
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Robert,
I had thought I’d wean myself off this blog but find I’m suckered in again. I had also thought I’d put paid to your use of the expression “Muller” in a polite way.
Wrong on both counts: Mullahs are Islamic religious leaders just as Ayatollahs and Imams.
May I suggest you stop using the term “Muller” with my, now, ruder directness?
There used to be a time when every successful applicant to a job in a Bank could look forward to preferential mortgage acceptance and in-house rates. Also, even the new female tellers could smile exceptionally at clients whose bank finances that they had access to.
If anyone thinks that is sexist, do a survey of the frontline m/f composition of tellers in local branches.
With regard to the bonus situation, are not employees of the various banks in benefit from these preferential terms anyway, all the way up the tree?
N.
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Why dont City banker boys make the tea?
They've got peasants in the basement to do that.
And besides, you dont get a bonus for making the tea.
This lot need to come off their "golden pedestal" and join the real world.
Everyone has had enough of their greed and ego.
Who says that a banker who is just doing his job is worth any more than a doctor who is just doing his job?
They recieve a "country estate" per year.
Why dont the top 1000 workers in Tescos, an important and successful international company, recieve 5 million a year?
Because that would be ridiculous.
Bankers seem to think it's OK to help themselves to other peoples' money in bucketfulls, even if they have proved themselves to be useless.
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Dear Robert,
I'm getting worried about the lack of breadth to your recent blogs.
After having us vent our spleen over RBS and their bonus plans, you now throw the Black Horse to a river full of virtual piranhas, which can only have one result.
So even though I am unlikely to see this post appear for another 90 minutes, during which time none of us are able to comment on anyone else's comments, I am no longer sure that I care since I confidently predict that 95% of posters will say NO THEY SHOULDN'T.
Isn't there something more important that we should be discussing? I'd even rather talk about the effect of mixing heavy snow, ice and the no-risk safety culture on UK businesses, after all there's no buisness like Snow business!
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Look clearly people have got this bonus outrage all wrong. The bonuses should be much larger.
One of the reasons bonuses are paid is to attract the best talent. Judging by recent performances banks are being run by those not up to the job so bigger bonuses are needed.
There, simple isn't it? You just need to think clearly.
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They just don't get it do they???
YOU AINT GETTTING ANY MORE MONEY!!!
Please will someone bring this sector of industry to task and let them face some serious scrutiny:
FRAUD
DECEPTION
DODGY ACCOUNTING
MALPRACTICE
LACK OF DUE DILIGENCE
are the charges.
I am further incensed that this is even up for debate. What world are these bankers living in!!!
GO TAKE A HIKE GUYS!
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Dear Mr. Preston,
In the blog below you paraphrase the arguments for paying a bonus thus.. No bonus = exodas of better staff. You then add..."If the Banks were staffed only by dunderheads and mediocrities - well, the bank could spiral into disastrous, irreversible decline"
Have I missed something? I thought that the banks had already crashed, even with the better bankers on board. If we the taxpayer hadn't bailed them out, they would have gone bust.S o just how can the dunderheads and mediocrities do any worse than the wizz-kids?
As for Lloyds -
A) Bonuses to branch staff: unnecessary luxury. In a recession your average bank teller/manger, isn't going to quit because they haven't been paid a bonus.
B) Bonuses to city traders: only those with an exceptional track-record i.e. those likely to be headhunted. No across the board payments.
C) Bonuses to board members: Political suicide for the GVN. A big, big NO!!! Lloyds TSB may have been better run than the RBS, Northern Rock etc... but that's a bit like saying that Southampton are having a better season than Charlton, so the Saints boss should get a bonus. In fact, he got the sack, because Southampton have been performing poorly as well. Ditto Lloyds - After all, haven't they also written off billions in dodgy loans?
As a guide, bank executives should only get a bonus, if operating profits (after write-downs) were up on the previous year and above city expectations. If either of these hurdles are not met, then there should be no bonus - not in cash, not in shares, not in tins of baked beans or anything else.
And if some GVN troll is reading this post - pay a bonus (of any hue) to a Lloyds or RBS board member, and you can kiss my vote goodbye. Period!
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The position that Eric Daniels and his little team are taking if they insist on their bonuses, which they no doubt will, could cause quite a massive headache for HMG.
I hope that Gordon Brown will see that a real "sacrifice" is when you take pain in order to spare others suffering, and not some diminution of booty after your jolly buccaneers have sunk a treasure ship.
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Robert,
Dont you mean that this is a decision for UKFI at arms length from Government - has the framework agreement for its operation been published yet?
Glenn Moreno ( Chair) - Pearson / Fidelity
John Kingman ( CEO) - HMG/FT/EIB
Peter Gibbs-Merrill Lynch
Michael Kirkwood- Citigroup BBA Chartered Bankers
Lucinda Riches-UBS equity banker
Tim Sykes- analyst UBS/Credit Suisse/Standard Chartered
John Crompton - Merrill Lynch / Morgan Stanley
Any non-banker / financial world connected people in there? Too much to ask?
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Lloyds were strong armed into buying HBOS. The reason that there was no competition to the acquisition was that HSBC were being kept in reserve to takeover RBS.
I feel sorry for Lloyds shareholders, forced into taking that pile of rubbish over. Yet not that long ago Lloyds directors were being pilloried for being risk averse and not pilling into what became toxic investments
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Sure, Give them their shares as options with a striking pricee that will reward them when/if the shares recover, say, 80% of their peak value. Their bonus will then be well-earned. And if the shares don't recover....
Fair shares
ed
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Shareholders have a vote, the government should vote according to public wishes, which have been made abundantly clear here and elsewhere.
Anything else would be a betrayal of the public trust that would call into question the legitimacy of the government's claim to represent the people.
Brown and Darling should be reminded that their decision in this matter will be remembered come polling day.
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The Board should be immediately dismissed for even considering paying themselves bonuses.
THIS HAS GOT TO STOP!
As a private shareholder (in addition to my taxpayer stake) whose Lloyds shares have crashed I shall be at the AGM making a lot of noise if this is on the Agenda.
Our government can expect riots in the streets unless they intervene and stop these greedy practices - we've all had enough.
A bloody disgrace.
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The taxpayers have contributed generously to the rescue of most of our major banks thanks to the Government's intervention. The jobs of staff and directors have been saved and this is their bonus. It is quite unreasonable to offer them further pay beyond their fair remuneration which can only be at the taxpayers' expense until the banks are once again running profitably. Only then would it be fair to offer additional remuneration for a job achieved.
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We need some joined up thinking at the BBC.
Synchronise blog posting times with having enough moderators to deal with responses in a decent time period!
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Should LLoyds pay a bonus - NO!!!!!!!!!!
See about 400 out of 424 blogs on exactly the same subject re RBS including mine at #103.
If this is a forum for public opinion then my opinion is that bonusus paid to bankers at whatever level and particularly those at the top is an incitement to riot and if I was a banker who might get a bonus I would decline it publicly to avoid the risk of being lynched by an angry public.
NO BONUSES
NO BONUSES
NO BONUSES
NO BONUSES
Get the message?? NO?
Well here it is again.
NO BONUSES
NO BONUSES
NO BONUSES
NO BONUSES
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It seems both the UK and US governments are running a horse and cart right through employment law.
If you put in an employee's contract targets and bonuses for meeting those targets, surely you are legally bound to pay those bonuses, regardless of company performance, change in circumstances etc.
What Gordon and Barack are encouraging is pocketing of these monies by the company. End result will be that the employee won't believe future promises and will either go where he/she can be guaranteed a bonus and trust the guarantee, or they will work as if there was no incentive - as in government departments.
End result - REAL banks will attract the best people and these people will do a better job and nationalised banks will do less well - just like history tells us all nationalised industries do. Ho Hum!
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I believe that the question is best settled by the board under present circumstances. Should the government wish to get into the day-to-day running and operations of a bank, then they should formally take control. However, I don't believe they would wish to do so, because this would quite rightly be seen as being a serious mistake. It would leave the business of running a bank open to the influence of the government, which in turn is influenced by the hoi polloi and 'special interest' groups. This would inevitably lead to further interventions in business decisions which would lead to ever greater market distortions. We are still dealing with the aftermath of Greenspan's interventions to lower the equilibrium rate of interest and to encourage the growth of new financial instruments. What is most desperately needed now is a removal of government interference from the market, not more of it.
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Let's hope Gordon Brown realises the weight of feeling on this matter.
This is the time to ban obscene bonuses for good, we should never again get into this mess by people who's only objective is their own vast greed
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If Lloyds TSB announce a profit I see no reason why the Executive members should not receive a bonus in shares this year providing the HBOS executive doesn't receive a bonus if HBOS announce a loss.
Now will the two newly government appointed directors receive bonuses next year if the newly formed Lloyds Banking Group group turns the ailing HBOS around?
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COME ON??
THE ANSWER IS NO!
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In any event the take over of HBOS will
no doubt take down Lloyds TSB.
I just wish i had PETITIONED HALIFAX PLC
WHEN I HAD THE CHANCE IN 2007.
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I repeat my previous comment
Gordon Brown must call a halt to all banking bonuses
at least until the present crisis ends
not to take firm action now will be seen as
being scared and hypocritical
having a vested interest in his own future job in the city
being totally unfair to the rest of the population, all of whom are suffering and WHO HAVE VOTING RIGHTS
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It's official, Joe Muggins,aka the taxpayer, is the national milch cow. The bankers will get their bonuses, Lord Mandlesson may make weak mutterings but it's nothing to worry about. Democracy is now reduced to legally dipping into Joe's back pocket. Let's fund a stupid, costly war, no problem!Let's bail out the banks and let the bankers take their cut, no problem! These things are apparently unconnected but democracy only works if the people trust it. Do people in shiny offices have any idea how cross an awful lot of people are?
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No
This sounds even better than cash!!!!!
The banks shares are at rock bottom and there is no chance it will fail with the Gov behind it.....
At some point in the future the shares may very well be worth 3 or 4 or more times there value today..... but I doubt very much less!
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It must be glorious to be paid to be incompetent!
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They certainly shouldn't . I have some £60,000 in a savings account with another major bank and am now recieving virtually zero income from it, this is causing me some problems to say the least.Thanks to Messers Brown and Company. Every day he stays in charge means more and more problems why can't he just go quietly .
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Bonus??? What bonus? The financial performance for 2008 should include HBOS -
it was their decision to buy them.
"They hope to make good profit out of HBOS in years to come". We shall see!
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Listen it will be news when the Banks dont pay bonuses. It makes it all easier when you understand that these are liars, cheats and fraudsters so of course they are going to take a bonus. Why the suprise ??? No banker has been investigated or arrested over the fraud that has taken place and they wont be.They have gotten away with it and intend to make merry.
And as for the government they are only good at posturing and blustering until someone tests their resolve and then they fold. It has happened on every "initiative" they have ever instigated. Make a noise and hope that when push comes to shove the public will have forgotten .Basically they are usekess and should all resign and get back to being pretend politicians somewhere else.
Is Paddy Power taking bets on whether the banks pay bonuses...get your money on.
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If they pay themselves bonuses, then they are asking for trouble.
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We just dont get it do we !! this is going to cause public outrage. Any bank that has needed taxpayers money to continue in business should not give out bonuses until they have paid all the taxpayers money back. The execuse to use bonuses to retain the best staff cant be used as I don't think anyone would be that silly to change their job in this economic environment because of a lack of their bonus. Are the banks aware that their refusal to lend is hampering business and people are losing their jobs left right and centre. Gordon Brown have some backbone and say no to any bank bonuses until this mess is well and truly over.
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Its a no brainer. The bank has made massive losses.the banks shareholders and depositers have taken a huge hit.They are very lucky they still have jobs.The bonus culture has to go. IT has destroyed million,s of pensions paid in the form of interest to retired people. There must never again be a bonus culture,evan if the bank makes a profit in the years to come.
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pay it in shares with a lockin of 3 years...that should be fine...
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RP: Should Lloyds pay a bonus?
No!
They would be bust without our money.
Buster Brown must stop it.
If any bonus is paid then there must be no more taxpayers money paid to them.
It is a dull question.
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Lloyd's should pay a bonus, but it should be taxed at 99%
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I didn't used to like Clarkson, but apart from the apology, he is right up there now!
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Under Crash we have endured years of " stealth taxes"
What's the betting on "stealth bonuses"?
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Paying these bonuses is typical of the immediate rewards in return for long term risks taken approach, endemic within the global banking industries.
If I went into a bookies and placed a bet on a ‘dead cert’ for a race that is to be run in a couple of months do you think I could collect my winnings immediately?
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Come on moderators or are you all stuck in the snow?
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These bankers have created our present problems through reckless lending and idiotic investments. What was Eric Daniels thinking getting involved in the basket case HBOS when he had mostly avoided getting sucked in before? As a shareholder I would remind him he works for me and NO, no-one gets a Bonus until we get our money back.
There are plenty of Bankers around. If they don't want the job many of us could do a better job at half the price. A Bonus is for success not for losing as much money as possible. Hornby on £60,000 a month for cocking up HBOS? Sack him or it is time for another Civil War.
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Lloyds should take their published figures. Subtract the money it has taken from the government and the value of an audited valuation of its exposure to toxic debt. Only after that should a determination of anyone's right to a bonus should be made.
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We need to escape this bonus culture, let bonuses be in the form of a profit share.
I suspect shareholders attitudes will harden when they see millions being taken out of their slice of the cake.
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Any director that is in a senior operational position in any bank in the world clearly would be acting irresponsibly if that director accepted a bonus in respect of 2008. The Banks are in the position that they are in,we the public are told, because the banks do not trust each other and will not therefore lend to each other. However, logically it is not the banks that cannot be trusted it is the executives that run the banks that cannot be trusted as they do not trust each other. Self condemnation!
If therefore those executives collectively have no trust in each other they cannot have earned any bonuses as Banks are about trust. If a bank cannot be trusted there is a run on the bank and then when it cannot pay its depositors it is out of business as insolvent.
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Brown leglislate to make any bonus 99% taxable or hold a referndum and they would get nothing.
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As a shareholder of Lloyds who has taken a severe hit over the past 12 months or so I would be disgusted if the board received any form of bonus for that period. Accountability and responsibility now has to be demonstrated by these people - they won't apologise for their ineptitude and poor decision making but their refusal of a bonus would be a good start in the process of renewal of shareholder respect.
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kiki_dread.
Your post #1 has just appeared.
I was wondering if there had been a new bout of broadband snowfall.
Like your posts and look for them too.
Perhaps some of the fear has sublimed from the Economy but the thaw will still leave very many out in the cold.
I'm obviously not typing from Cardboard City; London, NY, Tokyo, Beijing, Moscow,...etc.
I cannot even name those Capitals of the 'Group of Twenty' off the top let alone those Countries but it seems the World is awaiting something positive from their get-together.
Hail to Bob [M not P].
N.
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Wot no moderators.
Posts at t 4.15 still awaiting moderation.
Its a disgrace.
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Why is this even an issue for discussion at present?
No bonuses,got it? And no more talk of bonuses for two years, then a review.
Got that?
Let's see if this punch-drunk government can show some leadership mettle, and move on.
John C.
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Before any bonus is considered what about a visit from HM Revenue & Customs?
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Surely the banks will not be awarding bonuses this year to higher management simply because they cannot possibly have hit the targets required.
What possible wording can there be in a banking target to justify a bonus?
Your target this year is to reduce the share price by 90%
You will need to induce a run on the bank to ensure you reach OTE
Exceptional rewards will be given for exceptional achievements such as bankrupting a country
Within any bank there is a pyramid of objectives where small goals add up to large goals achieved.
Clearly the large goals have not been achieved, in fact the reverse, so no bonuses for high up managers.
The small goals can be rewarded.
eg Area manager signed up 100 new company accounts in the year.
eg Teller had yearly discrepancy of less than £100.
Generally these will be small awards and unlikely to invoke public protest. Thus I think it would be unfair to introduce a blanket ban on bonuses, but it should be a matter for shareholders if any higher management get bonuses.
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From the Independent (1st Feb)
"A group of Cambridge entrepreneurs and businessmen are so outraged by the behaviour of the banks that they are setting up their own.
Telecoms guru Dr David Cleevely said: "We are sick to death of the way the banks are operating. They are offering people almost nothing for deposits but charging small businesses up to 15 per cent for their credit facilities. There is something fundamentally wrong." Dr Cleevely, the founder of Cambridge Wireless and Abcam, the world's biggest catalogue for antibodies, is working with a number of businessmen on plans for a bank serving depositors and commerce.
"Quite apart from the social issues, there is an arbitrage opportunity here to set up a bank because of the huge disparity between borrowing and lending," Dr Cleevely said. "Talk of their being no money around is nonsense. There is tons of money but no one wants to put it in the banks earning next to nothing."
Other businessmen involved include Nigel Brown of NW Brown, the Cambridge-based corporate financial house, and Dr Alan Goodman, a biotech entrepreneur who has founded more than 30 companies. Early talks have been held with Cambridge University and Cambridge City Council.
Dr Cleevely said they are looking at a vehicle known as the Industrial Provident Society, which is regulated by the Financial Services Authority, to use as the mechanism for the bank. This needs a minimum threshold of €2m (£1.8m)capital and allows its members to lend and take deposits: "I see a renaissance of the mutual societies and co-operatives which we saw in the 19th century." The entrepreneur added that fury is growing around the country over the behaviour of the banks and how they have failed their customers. "There is no doubt in my mind that the way the bankers were rewarded has led to their reckless lending. "Big fat salaries distorted the risk and led them to take risks they shouldn't. We need to change this and it could be that commercial and investment banking must be separated by law."
The Cambridge group has been in contact with the Treasury over the project. They have also expressed their dismay that the Small Loan Guarantee Scheme is not working properly."
I'd move my money in an instance if my Bank pays Bonuses.
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Can we please make a distinction between the Executive of banks and the 'average' bank employee. The vast majority of staff in banks work very hard to deliver a good service to their customers and are paid an average salary.
These staff had nothing to do with the massive losses made in other areas of their organisations.
Over the years, many of these people have taken their profit sharing in shares, or saved to buy shares, through SAYE. I know people on £12-15k per year that have lost tens of thousands of pounds.
Lets also be clear that the UK tax payer has not 'given' the banks anything - they have made an investment, which could deliver a significant profit in years to come.
The banks and their employees have paid billions of pounds in taxes in recent years - RBS, and it's staff, has paid over £15 Billion to the treasury, over the last 10 years.
By all means, have a go at the senior people, that made ill timed and ill thought out decisions, but please don't tar all banking staff with the same brush
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Unless I'm mistaken Lloyds have said they intend to repay the Govt money this year. Presumably they could do that when announcing their 2008 results on 27th Feb and then they would be free to act as they choose.
Incidentally I hope they will on that day announce their lending amounts for each of the months in 2008 compared to 2007 thus demostrating that the major reduction in lending comes NOT from many of the UK banks but the absence of lending from O'seas banks that operate in the UK. That in itself would to my mind be very full justification for paying bonuses to those responsible
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Now maybe Lloyd's has been run as a paragon of management competence, and they will be able to turn around the HBOS dead dog................ but maybe not.
What they have to realise is the critical searchlight is very much shining on the banking industry, and they will be tarred with the same brush as every miscreant.
All banks make filthy and unreasonable profits from their customers, Lloyd's are only less grubby because they managed -as far as we know- to keep clear of the sub-prime debacle.
It would be perhaps politic for them to lie very low for a while and not mention bonuses, incentives or profit share for their senior executives. I suspect none of them are on poor-man salaries.
If they run their business well over the next few years they are going to make a fortune from the rump of HBoS and will surely be able to syphon off some filthy lucre for themselves during that time.
So why be even more greedy at this time ........
I don't reckon any of them deserve a bonus for just being sensible and conservative, but bankers can't help themselves I suppose. So shame on them, they just don't get the message.
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Say No to Greedy Bankers' Bonuses @
http://www.facebook.com/group.php?gid=49114669212
Social networking CAN make a difference
Please join the group and have your say
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What about the FSA? They have been responsible for the regulatory failures which have caused this crisis, yet the FSA pays bonuses to its workers, just like the banks.
The banking crisis was a failure of regulation. Get rid of the FSA, I say. They receive funding from the very organisations they are supposed to regulate and that has to be a nonsense.
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not only do lloyds directors not deserve a bonus they should be all fired for gross incompetence.........there was no commercial reason to takeover hbos, they just let the government strong arm them into it! They should have resisted, it was a good bank before this deal brought it to its knees! they are supposed to act in the best interest of the shareholders not to bail out incompetent governments.
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Unbelievable. Is it the banks fault for the no boom and bust picture painted by the prime minister. Perhaps given his failure he would like to forgoe his perks and privileges. Now I am not saying the banks have shone in glory however it is so easy to blame them for all the troubles. Recession is like nature it is part of a cycle. Who knows what has been said behind closed doors between the government and Lloyds over HBoS - remember Lloyds was and is a traditional bank on good lending values but was critiscised for poor performance when many banks were making bumper profits from activities which have now been called toxic. Equally the media needs to have some responsibility. Tell the public enough times a particular story and they will believe it! Where is the balance there is good news out there search and you will find and until such time as this balance begins we will continue to circle downwards on the spiral of negaive journalism and hence no confidence in the markets. I hope Peston is a proud man for his part in alot of this negativity!
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N N OOO
NN N O O
N N N O O
N N N O O
N NN O O
N N OOO
the government seriously risks protests on the streets if they award any bonuses to staff at any bank that has had money given to it by the taxpayer.
it cannot be justified.
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Robert
Re : earlier post, UKFI will settle the bonus issue as follows :-
"UKFI will work to ensure management incentivisation based on long-term value maximisation, which attracts and retains high quality management and which minimises the potential for rewarding failure"
..............minimises the potential for rewarding failure????
Takes a banker to know one.
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Robert:
Simply put - without taxpayer funding those Banking Organisations were insolvent/ are insolvent/ are likely to remain insolvent for the forseeable future...
Notwithstanding the Billions of direct Capital injected into the Banks, they have had need of a further £200 Billion to meet day to day liquidity 'issues', and a further £200Billion to be available as standby...
And still we have not heard the simpering truth!!!
The taxpayer is now in this for 'life', literally in many cases... so perhaps some of the whining Bankers should be considering whether they deserve 'life' for their part in the country's obsequious demise - rather than adopting their self-serving snivelling to cloak their snuffling in the 'Peoples' trough...
"Wake up - smell the coffee", as 'they' say all too readily to errant personal and business customers when they approach their local neutered Bank Manager ...
In any other walk of life it would be expected that the business would 'fold' and there would be utterly no question of 'bonus'.
Imagine also, if you will, the Good Bankers' response to your pleaded request on bended knee, for 'an extension to your overdraft'... The explanation being that your employer is insolvent/ bankrupt/ has just written of £250Billion (with the expectation that this is not the half of it). You do of course reasonably expect that the liquidator will pay your 'bonus'... and so the Bank is at no 'risk'... Eyes would not expect to meet as you were invited to 'Close the door on your way out, Mr Err, Err, Err, Lubbock did you say?'
Personally, I am not minded to exempt the mindless and feckless few who led the country to this unholy situation - just because they have been 'bialed out'.
Unimaginably, there remains a stout bulkwark of Senior Managers who will simply not accept their own complicity. To-day brings word that Senior Risk Professionals consider that they have had their 'Best Year Yet' and expect to be rewarded accordingly - albeit there is a grudging acknowledgement that there will not be much left for the 'numpties'!!!
So palpably arrogant and demonstrably 'unfit for purpose' are these individuals that it is difficult to see where their futures might lie... other than the 'Dole'
"Bonuses for a 'failed' and 'discredited' industry..." - at the taxpayers expense!!!
Quite, quite unacceptable, and must not be permitted... Under any circumstances!!!
It's time to line up the tanks...
There is another way...
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The inference that if you don't pay fat cats fat cheques as a 'bonus' (I call that theft of MY and YOUR money, folks!) then you will lose able brains in banking. Rubbish! Be happy if they resign. If a small miracle occurs and banking becomes once again - was it once? - an honest profession, then people of brains AND integrity might take it up, that is if we are lucky.
You only have to look as far as your local council merrily deciding on ridiculous salaries for non-jobs and vast expenses, grinning over their oh so secure pensions (which I, as a low income pensioner of 4 score years, make a tiny contribution to) and you might come to the conclusion that actually, it doesn't take brains and ability to syphon off money from the populace, only a certain type of low, self-seeking cunning.
Now I come to look at it more closely, the answer could lie in emptying the prisons of all those convicted of fraud, and put them in charge of the banks, with any left-overs in charge of the local councils. This way, they would know they are under constant scrutiny and perform to a high standard of honesty! How simple! The problem is - are there enough in prison to supply all the banks?!! If not, convict the present thieves and self-seekers running the banks of fraud and then let them back in - with criminal records, of course!
There you go!
Just wait while I calculate if I can afford to live another few years.
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The question of these bonuses is a distraction. The US welfare net is failing because it's being overloaded with claimants, if it fails because of blind faith in technology - always an American failing - then their society will be on the verge of meltdown, as the urban poor, without hope, will simply take what they can. And when America melts down...
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Real simple.
If the bankers think they are worth a bonus let them explain why.
If they have come up with a real good hum-dinger of an idea that brings in millions for their (our) bank then so be it.
However in order for them to make millions you have to consider where the bank actually gets the wealth which translates into money and bonuses.
That is right. The banks get the wealth, money, from us.
So. The banks make loads of money.
From us.
Then the bankers take that money from the banks as a bonus.
Job done.
We know our place.
Of course that model only works if the banks are actually profitable.
Otherwise the bankers have to get us to bail them out and recapitalize them, and more, so that they can pay themselves bonuses.
Job done.
We know our place.
The real moral hazard here is that the general public will start to understand how banking works.
Where money comes from.
What money is.
Then the bankers WILL be in trouble.
But then of course so will we all.
Much better that we just know our place.
Give the bankers as much as they want.
Whose money is it anyway?
What is money?
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Given that 99% of all the well educated posters on here are adamant that bankers do not deserve bonuses then it's a pretty safe bet that it's a bad idea.
In fact it's blindingly obvious to anyone.
Yet when you hear government ministers or people from the finance world talking, you get the idea that it's a difficult balance etc.
I have yet to see/hear anyone on the BBC absolutely slamming bonuses or suggesting they should be repaid. Why is this? It seems like we are allowed to vent our opinions on here where nobody sees them, and that's it.
The country is falling apart around our ears and yet all we get is a load of rubbish about fiscal stimuli, global measures etc, none of which will do the slightest bit of good in the long term.
On Question Time last night the questions mainly covered subjects such as the snow and Carol Thatcher. There was a bit about the foreign workers which didn't really go anywhere.
Why was there nothing about either the economy at large or the disgraceful way that our rule of law is being trampled on by the USA?
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The fact that these banks are even considering bonus payments for management positions just completely proves that they are living and always have lived in an alternate universe.
Over the last year we have all sat jaw dropped, aghast at what these guys have been up to. Now we know for sure that they really are totally disconnected from the real world. And to think of the taxes I and my children will be paying to have saved them is enough to make your blood boil!
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Yes they should be allowed to take a bonus in shares.
1) They make a profit, they deserve to be rewarded. The HBOS deal was a rescue bid enforced by the Govt, let them be rewarded for their diligence in the previous year.
2) Giving a bonus in shares gives them a real incentive to ensure the company performs well, ensuring they give back the tax payers money with 12% interest quickly, and making our Banking sector stronger again.
3) Once they have their bonus, make them share it out with the cashiers in the branches who work very hard for their £12500 a year for their 35 hours over 6 days.
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3. At 4:04pm on 06 Feb 2009, 25_and_no_hope wrote:
FAO: HunkieDunkie
Re our little RBS Share Price wager from a couple of weeks back - just drop 3 of your finest pounds into the next charity tin you pass by and we'll call it quits...
As for the bonuses, their share price pre-merger fell just like every other bank, affecting thousands of pension pots just like every other bank.
No bonuses in the banking sector are justified during this period of uncertainty, but the government do not have the strength to stand up to the banks and tell them this.
I can only smile and shake my head... Will do, and in good RBS style, I'll double it and tell the local press just how 'Community Focused' I am...
Cheers
I do agree with your sentiments (see previous posts) Banks and their Management (Senior, Middle & Junior) in my experience are inept, and failing to understand all but rudimentary concepts of Corporate Enterprise...
Bonuses are awarded for 'fortuitous' deposits these days! Absolutely incredible!!!
I have no doubt that HMG lack the 'bottle' to intervene regarding bonuses... (But I have lost money to your name before, so nothing 'on offer' this time...)
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If the executives [muppets] at lloyds tsb are not able to judge the current mood towards executive bonuses then do I think care in the community is failing
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I do not often comment but read regularly. I have decided to comment today as I have been involved in one way or another with financial institutions since I was first in the emplyment market. Some of the entries on the blog are seeming to be from ill informed, ignorant or just plain rude participants.
#11 I agree - I don't work for LBG but I know exactly what you mean. The comments from others are so frustrating.
#15 You have no idea how an international bank works. You may not need a cashier or a personal/business banker to speak to or telephone banking but amazingly enough hundreds and thousands of our customers do. Others also may require the back office guys (of which there are many) to actually process your requests. Strangely the internet has not taken over the whole of the banks processes and controls!
#17 "In any bank" - I think you'll find that HMG has no control over the independent banks re bonuses.
#21 You have a serious chip on your shoulder. Which group do you fall into? oh yes it must be the no hopers.!
#27 "Banking scum" - a little harsh. Have you voiced your opinion to your local bank cashier recently face to face or can you only hide behide a blog?
#32 Preferential rates - in your dreams!
On that note I will leave the blog and defiantely return later. I have seen Governments, recessions, banking policy, etc come and go. I feel more confident than ever in who I work for. Maybe I am wrong but at least they are still giving me the hope for a future with career progression, innovative projects for the future, customer focus at all times and definately improved performance for our shareholder. AND I have confidence in the future if we do not set hares racing by media stirring.
I would also like to point out that all those people you think will not have jobs from banks have many transferable skills e.g. Trained and experienced in negotiation, communication, motivational, team mangement, IT skills along with risk assessment, project, legal, compliance, organisational, HR etc etc etc skills. These can all be used in any industry.
Finally #53 Gordon Brown cannot call a halt to all banking bonuses as HMG does not own all the banks!
Now I have got that off my chest I can retire to my pizza (buy one get one free cos I haven't got a bonus. LOL)!!!!
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Let them pay the bonus Brown.
It will make the ad campaign at the next election for the Tories all the much easier and cheaper.
Pay the bonus.
Pay the price.
Get out of my country. You work for me, not the other way around, and I say it is time for you to go. You're stealing from my child's future - if this was a company you'd have to go this weekend rather than hang around for a few more months.
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What a load of tosh from the posters on here. Firstly, the banks weren't bailed out and wouldn't have gone broke. Lloyds/HBOS had several billion in assets, the government just wanted them to have a bigger balance sheet to reassure the city.
Eric Daniels has done a superb deal, backed by the major institutional shareholders, in taking over a bigger bank than Lloyds at a massive cut price. He's probably pinching himself every day that the government allowed such a deal to happen. HBOS will make a loss, but the Lloyds side that Daniels had influence over is expected to make a healthy profit. Given the job he's done both he and his board deserve a bonus. I'm sure he'll be delighted to take it in shares and share in the massive growth potential the low share price offers.
The staff on the ground who have made the company money in its profitable arms (insurance, wealth etc) also deserve their bonuses. If you've made the company millions of pounds as some will have, you deserve some kind of reward for that. If you're in a division (corporate) thats suffered massive losses, you probably don't deserve a bonus and most would accept that.
Its typical of this country that we need a scapegoat for our own mistakes. Individuals borrowed too much and brought houses at over inflated prices, no bank put a gun to their head to do this. Despite that Lloyds has increased lending during the 2008 and will do during 2009. There is no credit crunch at Lloyds. The architect of the economic disaster is Gordon Brown who has done a great job in shifting blame onto the banks.
Voice your anger at the politicians who have taken us into recession after promising the end of boom and bust, not those in the city who will deliver great long-term value to their shareholders, which is their job. Their job isn't to panic about a short-term share price driven by market negativity and short-selling.
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Every case is different, you cannot make a blanket rule for all banks.
Shareholders employ directors to manage their business,
Directors should decide on executive pay.
Most importantly shareholders should register their approval or otherwise by reelecting the directors or firing them at the AGM.
For too long shareholders, particularly institutions, have abdicated this responsibility.
Commentators can stir the pot and encourage the above to good effect.
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I am beginning to wonder if it would have been better to set up an alternative banking system using the already nationalised banks like NR. You would just need to transfer the data on the current balances and carry on from there. The exisiting banks could then have been liquidated.
It took a decent riot before Maggie abandoned the poll tax. You can't help thinking that something similar will have to happen before the government gets the message.
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The moderation is as fast as Gordon Brown's understanding of exactly what is going on...
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What's going on here Robert ?
You have already asked the Q about Bank bonuses on your earlier blog - and you were given a clear answer.
So why ask the same underlying Q again ?
Are you hoping for different answer to the same underlying question this time round ?
Here is the same answer (twice this time as you may have missed it earlier)
No Profits = No Bonuses
No Profits = no Bonuses
If we have to repeat it a third time it means that
The first time you weren't listening (attention deficiency syndrome)
The second time you didn't want to listen (fixed viewpoint and standing with fingers in ears shouting la la la)
A third time of telling would be a total waste of time as that would indicate that the recipient has an outlook of somewhere between mild wackiness and comprehensive acceptance of everything that comes under the heading of wackiness in the totality of all universes both know and unknown.
OK a third time
No profits = no bonuses
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I don't quite understand. The point of a bonus should, if I'm not wrong be for exceptional performance. If true, why in this case, did banks need recapitalising last year? The bonus it appears has become a discrete addition to the bankers standard wage - for both the overpaid member of staff in the board room and the sales people running their high street shops.
Should all staff equity savings schemes be scrapped while the country has large stakes in the banks or should their share bonuses be allowed to dilute the relative portion of the company the country holds an interest in and thus reduce any future return we have risked considerable on?
Hope Mr Peston isn't receiving a bonus from the Beeb this year. If he is getting a bonus hope it's being donated to a beneficiary fund for former Northern Rock staff.
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I'm not sure if you are naïve or just playing the governments game for them by focusing on the bonus issue and not on GB and the regulators role in creating this mess. Remember the so called credit crunch is a consequence of the bursting of an asset price bubble that both the UK and US governments stood by and watched as it grew and grew both failed to regulate or curb monetary supply over a seven year period. In fact both deregulated the markets allowing greater leverage in both the banks and the derivative markets. No it wasn’t China’s trade surpluses that drove the asset price bubble but US and UK monetary and fiscal policies and failure to regulate
If some of the bankers are guilty of perpetrating a massive fraud let them be investigated and let the courts decide whether they covered up the problems of their devalued assets and left their share holders and the UK tax payers holding the baby. But please note their fraud was not buying the new mortgaged backed securities this was just a failure of judgement the fraud if it can be proven is that they failed to disclose information to the market that would have affected their share prices.
Why have you not been calling for a full fraud squad investigation into this aspect of this saga which has cost our pension funds billions?
Before banging on about bonuses wouldn't it be prudent to check whether they are a contractual right or not. Most compensation packages in my experience are contractually binding and the majority are linked to measurable outcomes such as revenue earning, earnings/share, market share, share price performance etc lower level staff bonuses are generally linked to the companies overall performance and specific KPI's that they are targeted to achieve.
I can only believe that the current media campaign aided and abetted by your good self is and has been orchestrated by GB and Mandy to try and deflect the publics’ attention from the GB's direct role in helping to create this sorry mess that we are all paying for.
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DO you THINK the MEDIA are HYPING this SITUATION up SOMEWHAT? Sigh. Whatever happened to objectivity?
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This comment was removed because the moderators found it broke the House Rules.
No
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It's clear now that the profits that the banks have made over the last 10 years or so are based on assets that were never actually worth anything like the sums they were claiming, and hence the salaries/bonuses they paid their executives, and other highly paid colleagues, were never justified in the first place. Their packages were simply inflated in exactly the same way as those assets were and its time that that bubble was burst too! As for having to pay high salaries to keep the best staff, I think that the current mess puts paid to that argument! These guys are a bunch of virtual idiots who have played fast and loose with the money entrusted to them by their customers!
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Respectfully, I admonish the moderators for slowness. Get a grip.
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Should RBS staff get bonuses? No.
Should LloydsTSB staff get bonuses? No.
I don't have anything original to add, when the case has already been put so eloquently by many others here. But if, as many suspect, this blog functions as a New Labour focus group, I want to join the chorus of disapproval!
And if that does no good, well, we can always call for a boycott of the offending banks. Seem to remember the anti-apartheid boycott of Barclays had some effect in the end...
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There is widespread anger in the whole country and especially in my heart when we hear that bonuses are being paid to top executive bankers out of ALL proportion to any man's just deserts.. .I am so disappointed with the New Labour governments- First the Iraq war now this poverty of new ideas and failure to come up with determined leadership and inspiration.
Its up to us to demand a ceiling on pay and bonuses and recompense for savers who have lost so much income .I would also like to add that this disquiet about foreign workers is no new thing- It has been simmering just under a rolling boil for a few years now- it has been perceptible even 'out in the sticks'.. What we need is some sincere and rousing speeches so that people's innate idealism can rise to the fore again so we can see that the European project IS worthwhile-Otherwise the demands for protectionism and narrow nationalism will make themselves strongly felt to the detriment of our long held hopes for European tranquility.
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57. At 5:36pm on 06 Feb 2009, caslad63 wrote:
They certainly shouldn't . I have some ?60,000 in a savings account with another major bank and am now recieving virtually zero income from it, this is causing me some problems to say the least.Thanks to Messers Brown and Company. Every day he stays in charge means more and more problems why can't he just go quietly .
If you have been in the fortunate position to be able to save 60k with another bank then well done. What I would say is that for the vast majority of people in this country on average earnings, saving that amount of money is near impossible over a life time at work.
I am self employed and my profit was swallowed up last year by the massive increase in oil prices and material costs. I can not afford to increase my prices in line with speculators on the markets. If I did I would be out of work very quickly.
I think that those bleating about a loss of interest on their savings, or for that matter, bankers taking huge bonuses in the financial climate at present, have little just cause to complain. If in the future interest rates go through the roof, as they have done in the past, will you complain about that?.
The moral of this is that your gain is another persons loss, Your loss is another persons gain. That is a free market economy, do not complain when things are not in your favour. So many people in the world today believe that there is only an upside to the world we live in, get real, there is a down side.
In times like this we all have to bite the bullet, seems to me some have to bite the bullet harder than others, yet bleat less.
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No they shouldnt get a penny in Bonus this year.
If they do then we as a Nation need to see if we have a Lloyds Account ( I have one)
Then we all go down and queue up outside to empty the account.
If the BBC cover it with as much drama as they did when the Northern Rock went Lloyds should get the message load and clear. So will every other bank and the Government.
So its simple if they do close your account on MASS.
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Should they be paid a bonus at Lloyds well simply NO it will set a bad example to all the people who work for them, will do little for internal or public relations and will compound the gross mistrust the ordinary citizen already has of them.
Most importantly though is why do these avaricious people feel that they are exceptions to the society and community they live in, that some how they are different.
Especially when they have proved by their very actions that speak volumes over their closely guarded words that they are not very good at doing the job they are supposed to be doing and have not been since the turn of the century.
What I fail to understand is why they don’t understand how they are living in the remnants of the exploded bubble they created and that has destroyed the lives homes and savings of many of their fellow citizens who while trying to recover themselves will have to pay taxes to prop them up for years to come
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By the way Robert you missed a valuable PR trick in this article you refer to (your recent notes on the subject)
You could easily have referred to the strong feelings of the hundreds who contribute their opinion to your blog every day
Ignore you audience at your peril is an old standby by for any one who makes their living in the public eye.
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From a greedy bigwig point of view, they deserve a bonus. They managed to get billions from the government to boost the balance sheet, and it's time to crack open the champaign.
However, outside their office, millions of people, paying tax who are proping up this company and now many of those loosing their jobs (not being bailed out) and homes to be repossesd by the same company, it's simply unbelievable and I can't understand how they have the guts to announce this, be it shares, free holidays or whatever else.
The best thing these group of directors could do is make a joint statement saying
"we already earn plenty, we thank all the hardworking folk most earning a fraction of what we do, and have propped us up.
Our would-be bonuses will be donated in full to charities and voluntary organisations who are assisting people with financial troubles with immediate effect.
If they did that, people might actually believe for once these directors have a heart.
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So how did they rob us? Banks buy a package of mortgages forming a mortgage-backed asset; they sell 90% of it onto other banks, and are required to keep 10%. That 10% is swapped for existing reserves and sold onto to the public, passing on the risk. The next bank sells 81% and keeps 9%, which also swaps with its reserves and passes the risk to the public. And so fourth, such that, an initial one hundred thousand pounds, will generate 1 million in wealth for the banks involved, and then pass that 10% risk onto share holders. This results is “fraudulent” mortgages, inflated house prices, and guarantees a chain of mortgages failures leading to bust. The smart banks are sitting with enormous fraudulent profits, and the less smart banks and the government (us) pay for it. Is it that simple?
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Any organisation that benefits from tax-payer help should not even think of handing over bonuses.
No means no. The banks have not performed. No fantastic performance, no bonus. Simple.
This has been said over and over again by almost all of those people who have taken the time to blog here.
Everyone in this country is having to brace themselves for the future. The banks need to sort them selves out once and for all.
It really is time this lot of UK directors got down to sorting out the mess they are in. Bonuses are not their biggest problem. Or don't they realise that?
Now Robert, can we please move on to something worthy of discussion? You've had your fun teasing us all now. Change the tune, thanks.
How is our economy doing? Any businesses showing green shoots?
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Its stupid to simply say no bonuses. If bonuses are allocated fair enough. If the owners/shareholders don't like it then they vote changes in at the AGM. If senior bankers feel that they can justify these bonuses and think that they can convince the owners like wise, then fair enough. Not ALL bankers screwed up. If the shareholders disagree with how the business is run they vote for change or sell their share.
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I have never understood why certain jobs should command a very high salary, often with various perks such as travel, car, and housing allowances, and then the person receive a bonus for doing the job being paid for.
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The Lloyds management have earned their bonus this year but the bank should avoid paying it in cash.
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its a bit like a sportsman getting a mbe or knighthood, for doing what they are paid to do.To be honest the banks know they cant fail, if they get in trouble the taxpayer bails them out,its a captive market really.Im in favour of letting banks go under if they fail, most working people will get their money back. .Bonus,s are a disgrace,but, i bet, if any 1 of the people on here were offered 1 they would take it!!! lets face it we are all greedy these days, we are getting our"comeuppence "
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If you look at year 2008, even before taking over HBOS - mid Sept, Lloyds TSB shares were significantly down making owners of the company sitting on a big loss.
In these circumstances taking bonuses (in shares or cash or in somehting else) is immoral. The point is bonus is for exceptionally good performance, not for making your investors much poorer.
If the LLOY share at the end of 2009 is 300p-400p then bonuses are justified for year 2009.
For year to 2008 - no.
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Again, RP misses the target
Harriet Harman has just announced an investigation into sexual discrimination in the payment of bonuses, with the presumed intent of paying even more.
I hereby propose an extension to the suggestion of clawbacks from the bankers, what we should also claw back the massively excessive salaries these useless politicians are pulling in, ditto their Lordships' consultancy fees from the banks.
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Being self employed, I have to work to a very high standard to get paid for my services, which include the safety of people in one area that I work, and attention to detail and very flexible work time are a must in my other area of work...I do not get, or expect bonus payments, I get paid for doing exactly what it says on the box.
It is time these, frankly, over rated , incompenent and patronising clerks realised that they have to work and NOT cheat for a living.
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The argument has been put forward that if they don't get their bonuses they will look for jobs abroad where they will still get the big money ---hmmm, can anyone explain why this is a bad thing??
Good riddance, methinks.
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As Governor of a private school of some 370 pupils of all ages, I have sat across the table from a representative of HBOS who, after unilaterally withdrawing our overdraft facility, then asked why the Governors were not providing the funding needed.
Two things were wrong here- firstly the assumption that, because we are a private school, that we must all be wealthy and secondly that the Governors were not already providing funding, despite much evidence to the contrary.
The school was saved after an appeal to the parents, whereby even some pupils gave us their pocket money to keep the school open.
Perhaps it is time for the executives of the banks, who are so distant from the real lives of their 'customers', to experience the kind of pain they are willing to inflict on others in order to preserve their bonuses.
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You are WRONG no. 102 sausageroll
HMG in fact DOES have control over banks without taxpayer stakes. EVERY SINGLE bank has loaded the BoE's special liquidity scheme with dud loans. You and I are the proud new owners of exposure to Britain's toxic over valued housing market - an asset consisting of primarily poky mouseholes with the world's most indebted consumers living inside!!
Can the BoE not demand that ANY spare cash is used to retire some of the treasuries that have been loaned to the banks against these dud loans?? You don't NEED to have a taxpayer equity stake. It is blindingly obvious that ANY bank would have simply died without the massive refinancing from the BoE. The fact that RBS/HBOS/BnB etc. were such LEMONS that the taxpayer was obliged to nationalize them is DISGUISING the fact that the entire banking system is INSOLVENT and trhe taxpayer is on the hook as Britain defaults on its debts.
YES, we can and MUST stop ANY spare cash going towards ANYTHING OTHER tan repaying the taxpayer.
Read 108's views on bonuses from profits. There are rules and one often needs cour approval to pay our dividends from loss-making companies. SURELY a way can be foud to hold these blood-sucking bank managers to account.
Post 122 sums up the leverage merry-go-round nicely. Its painfully obvious that there were NEVER any profits, and the focus should simply be on the FRAUD that has been carried out with cash bonuses paid out of phantom profits and efforts to recover these.
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May I suggest that when everything was going well for the banks (or at least people thought so) and they were paying huge amount of taxes on their benefit I have never heard the "taxpayers" complaining about it. When these same taxpayers were spending money that they did not have with cheap credit I did not hear these same "taxpayers" complaining either. People need to learn that do not get anything for nothing. Well it is payback time...try at least to learn from it!
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Nonsense.
Let me summarise:
1. The world goes mad, but Eric keeps Lloyds above the fray (safest bank in UK, e.g. measuring by CDS rates, i.e. the cost of insuring debt to Lloyds).
2. Gordon decides to save the world.
3. Actually he can't, so he begs Eric to do it for him: "Please buy this enormous pile of pooh, Eric, mate, you'll be my best buddy!"
4. Gordon "helps" Eric, ending up in effect stealing large amounts of money from Lloyds and owning nearly half the bank:
http://unchartedterritory.wordpress.com/2008/10/22/the-mother-of-all-stealth-taxes/
(contributing greatly, incidentally, to a "lamentable" Lloyds share price).
5. Gordon seemingly makes it known that Eric should be paid partly in IOUs from Lloyds, even though Eric (presumably) has a legally binding contract of employment that states otherwise. If Eric screws up, the IOUs will be worth nothing. Fair do's says Eric.
5. Now we're told Gordon wants to steal Eric's pocket-money altogether.
Two points:
- the Board runs the bank, not particular shareholders. Remuneration packages are voted on at AGMs, but isn't this only advisory? A vote against would be taken seriously, but if push came to shove, the shareholders would have to vote out the existing Board. Since the new Board would be legally obliged to act in the best interests of the bank, not the Government, they might still decide paying generous salary and bonuses is necessary to retain key staff!
- I agree that many executives, traders, professional sportsmen, BBC chat-show hosts and others in numerous occupations are massively overpaid relative to the rest of us. In fact, our society has developed shocking and damaging levels of inequality. But that's a separate problem to stabilising the banking system. It should be dealt with systematically, not ad hoc. Raising the minimum wage dramatically would, for example, spread wealth around rather more evenly.
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I excuse any bias pre comment, but I am a Lloys TSB customer currently getting screwed on my overdraft and general unreasonable banking practices - there is no relief for the tax paying, relief giving customers.
Following the shambolic business practices adopted over the last 10 years culminating in the current economic situation, why do the banks feel their directors worthy of bonuses in the first instance? Why when the country is effectively underwriting their debt do they feel their performance has been creditable to deserve a bonus?
It appears that upon appointment to director level of these financial institutions, all sense of understanding of customer needs and customer psyche are confined to the waste bin. The only sense of customer focus is on how to maximise the amount they are able to contribute towards directorial bonus.
It has been the rigeur of the current Labour government to spin their way through ruling years, and leave behind a legacy of bullsh*t management speak, for which we realise 'customer needs' has now become.
To these directors and board I would say this - ordinary people are losing their jobs, house repossessions are a fact of everyday life, people in jobs are looking over their shoulders for the call to the boardroom - not for bonuses I add. Do you not think that it may be prudent to perhaps suspend the payment of bonus for this financial year and leave some money in the pot to help those in specific need ie become truly customer focused rather that self gratified?
I doubt this would be well recieved around the boardroom table.
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To dark surfer:
You obviously work for a banking institution otherwise you'd have a degree more understanding of other peoples needs.
The feel good factor was created by the banks falsly against a backdrop of poor financial foundations - we now know. They gave the credit cards, they let sub-prime mortgage aplications, they lent to foreign countries with not a HOPE OF A RETURN, yet merely wrote those bad debts off.
I agree of joint culpability, however your comment of customer responsibility holds absolutely no water - indeed its extremely ignorant!
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A view from the other side!
There are hundreds of thousands of “bankers” in this country, the majority of whom receive low pay and work hard. These “bankers” face the same challenges as everyone else in bringing up a family and paying a mortgage against the backdrop of recession and credit crunch.
Whilst facing these challenges, I should also point out that a large proportion of these people have seen their savings decimated (with bank shares given as an enforced part of their remuneration) and are coping with the very real possibility of losing their job.
On the subject of bonuses please understand that bankers of all types are compelled to take a large proportion of their pay in bonuses. This is to the detriment of basic salary which remains very low for most in the industry. Views on whether this is good or bad will differ but, for the vast majority, these bonuses are modest, are kept in proportion and are managed effectively.
I don’t ask for sympathy but I do ask for proportionate and accurate reporting on this subject. Politicians of all parties, newspapers of all types and, most disappointingly, the BBC are all seeking to make capital of the current situation. If you wish to wage a war against Investment Banks (the only institutions that pay bonuses that can equate to a Lamborghini) or the Board Directors of the mainstream banks (these are the only people culpable for the misdirected policies) then please ensure that this is done accurately and without generating the hysteria that is likely to see your average banker take unwarranted collateral damage.
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To # 118 from brunan # 94
How dare you say to people with a few savings 'to stop bleating'! I am 80, a widow with far fewer saving than yours, and suffering from having lived an honest hard-working, tax-paying life.
I did not foresee the rampant dishonesty of bankers, the 'me me' society, the idiocy of politicians cutting the interest rates to virtually nothing. How could I? Especially growing up in an era overshadowed with war, but always with the notion that others should be helped.
Use your imagination.
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I am a shareholder in Lloyds Bank and am astonished that those leading the bank are intent on awarding themselves bonuses in the current circumstances.
They clearly must be paid their salaries at appropriate levels but bonuses, now, are unthinkable.
Bonuses should be paid from profits: the very concept underlying them is that those who create "extra" profit for a company are paid something more to reflect their contribution.
These people are in the position of the senior officer and captain of the Titanic: maybe not personally culpable for the disaster but responsible as the senior people in the company and should accept that no bonus is justifiable, financially,or morally.
What a splendid example they would set if they decided, for this one year, to decline
any bonus.
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No, the gov cant do much about those bankers who have cast-iron contracts guaranteeing them massive bonuses....
EXCEPT that it can very easily bring in a special windfall tax for financial staff...most appropriate given the mess we're in (and they've caused).
90% would be good.
And we keep hearing the argument.."if we dont pay them in millions they will go abroad, and we'll lose their skills".
What skills?
The skills to break their banks and the economy?
Financial centres worldwide must limit the greed, or we'll never get out of the disaster cycle.
Financial staff windfall tax...now.
If the Americans can do it, so can we.
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I think that no bonuses should be paid to anyone involved in an industry that sustained loses.
I think the perceived worry that "if we don't pay bonuses, these high flying execs will go else where" is as relevant as a broken piggy bank!
Please let the high flying execs go else where, and to coin a well known phrase, they can make a sows ear out of a silk purse at the next job they undertake (if theyget a job at all in this climate).
There is plentiful supply of fresh young blood who are queuing up to take their places.
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££££££££££££££££££££££££££££££
LeT tHem EARN aS MuCh aS ThEy Can.
££££££££££££££££££££££££££££££
Then have 96% Tax on earnings over 170k with Draconian Tax Anti-Avoidence Laws.
I believe most MP's earn? (well get) just below this so a good chance to become law without affecting the cushdy little paradise they live in.
This time next year, will all be millionaires!!
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** I temp for a search and selection firm in the City- basically they're a sort of recruitment consultancy.
Over the past few days they have become INCREDIBLY busy preparing to head hunt the best RBS bankers if they don't getbonuses. My boss says that the other banks will always recruit the best bankers, even if there's not an immediate opening.
If anyone really thinks that not paying these guys is a good thing, they've got it wrong. They'll still get their money (probably even more)- just from another bank. Meanwhile RBS will have lost all of it's staff. If it then fails we'll all have lost out (my boss says it may well fail as the bankers will take clients with them).
My Boss says that if the bankers don't get their bonuses then he'll be in for a mega bonus himself as he moves them to different banks.
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No to bonuses of course
Should we also carry on sponsoring sporting events/organisation
RBS Rugby 6 nations tournament
Northen Rock - Newcastle united.
Surely they can use the money towards clearing some of their debts
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118. At 00:46am on 07 Feb 2009, mickthebish wrote:
"If you have been in the fortunate position to be able to save 60k with another bank then well done... " He also goes on to dismiss "those bleating about a loss of interest on their savings".
I can see why this might sound like a reasonable thing to say, but it does seem to express a remarkable lack of empathy. I think of my parents, long past retirement, who really aren't in a position to improve their financial position through new earning, and have seen the income from their savings slashed by 80%. I had a very nice childhood, but they had a pretty thin time of it, and I hate to see them getting anxious now despite years of sensible frugality and a great deal of hard work. There will be many others like them, some of whom, without families to support them, may be wondering, now, if they should be turning down the thermostat.
Just at the moment, I have quite a lot of money in the bank; in fact, on a bank statement, it is, to me, a quite eye-watering sum, and I'm tempted to think of myself as rich. Then again, I don't own a house (having sold my own a while back); if I bought one now, in my area, I could afford a slightly dodgy terraced house - as long as I also got a mortgage. At that moment, I'd look what I am - a teacher, clinging on to the lower edges of the middle classes. So the assumption that significant savings equate to abundant wealth is, I think, naive.
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Why doesn't Pesto have the common decency to respond directly to these comments, otherwise it's a waste of time talking to myself. Are us bloggers to be regarded with such contempt as to be ignored??
If the arguement is that intelligent people should be rewarded for performing well in their job, why not give surgeons massive bonuses for a good operation or pioneering work?
These bankers prey on people's fear of financial matters.
What if they leave us to go abroad? How will we cope without their parasitic morality?
Look, we the taxpayer now call the shots and many of these intellectual geniuses are now unemployed.
So we make clear to them:
"No bonuses and you can be replaced in minutes if you so choose to leave so please go you tortured soul unrecognised for your monstrous genius in incurring mind-boggling losses"
I anticipate a direct appraisal of my comments by the mighty one, praise be him.......PESTO
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my fellow brothers and sisters. I have read and listened to many points of view, I have followed Roberts blog and his reasons for why this economic phenomenon has presented itself. I wonder when and how we are going to discuss a plan for the 'moral capitalism' and 'capitalism with a conscience'. The point is we seem to be trying to rebuild the old pot but its quite clear its not only cracked , its disintegrated. The future of sterling and London as a centre for international fiscal dealings is teetering - and yet those who control the money are the ones who are trying to recapture the past. Surely bonuses are rewarded in exceptional performance circumstances. Don' tell me that the high roller beneficiaries actually need them. The whole question of salaries and reward needs to be overhauled.
Question: How do you reward a person for making the right decision not to grant a mortgage to an applicant if that person does not fit the credit criteria? Bonuses can't be linked to turnover in isolation neither can bonuses be set solely by those who will benefit most. That trust has been sorely tested.
The problem remains that banks have moved from being fiscal gaurdians of our funds to economic wheeler-dealers believing survival and reward are bound up
in status, takeovers, hedge-funds and the visible trappings of wealth.
The government have a duty to remove the fat from the banks - this must be used to support the more vulnerable - pensioners, the unemployed and to redistribute wealth to those professions that are undervalued and profoundly necessary to the future wellbeing of the country. I'm thinking the nurses, teachers, social workers and the many low-paid and voluntary sector citizens.
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Well said SteelyGlint2. Although I suspect that Gordon had nothing so ultruistic as saving the world on his mind.
More likely he was quaking at the thought of job losses in the Labour heartlands from the terminally weakened Bank of SCOTLAND & Royal Bank of SCOTLAND.
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145 finrec2005
So what. Hearsay. Bonuses if paid are real. Staff movement is opinion and may happen anyway. You are talking as though this is finished and more problems are not in the system. It is finished when it is finished, not because somebody says it is. Until then money paid into the system to stablise it should not be abstracted by loss making banks as bonuses. Simple init.
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Great. Load up the people with trivia like this.
Robert, if you want to REALLY report business reality, why is there NOTHING at all on the BBC about IRELAND. Ireland have just decided to make 7% pay curts on all public service workers, reductions in Doctors fess and just about everything else you can think about, and still know they are coming up short.
This is our closest neighbour historically, and it is COLLAPSING, yet the Beeb makes not a mention.
I wonder why?
The Irish situation is coming over here, and soon. Stand by folks, you've seen nothing yet.
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w.r.t my comment 112, and to clarify:
If you put 10 thousand pounds into the bank, the bank can lend 100 thousand pounds thanks to the credit multiplier. Now if the bank lent itself this money to buy a mortgage, then sold it on as shares, it stands to make an immediate profit. Throw in extremely lax regulations, and the bank is free to make a killing, legally stealing from shareholders who have bought into "fraudulent" mortgage backed assets. While it may be legal, knowingly being fraudulent is most definitely not. This needs to be investigated, as we are paying for the banks stuck with debt, and the others are giving themselves a pat on the back.
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145
Looking at the sate of the banks and the system as a whole, they can;t be that good
as 142 suggested
May be we should let in some young blood in. I am sure they will be happy to make their proofs at a slightly cheaper rate and they we can know how much they're really worth, when staff are recruited they get given target, objectives they put together a plan and get on with it
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Gordon Brown really is an economic genius.
With hindsight his abandonment of the competition laws to save HBOS ("too big to fail"), by steering it into the grateful embrace of Lloyds, creating "much much too big to fail", seems more like the advice of a man who comes across someone sinking into a quagmire, and recommends to a naive passer-by that they should reach out and save him.
"There'll be a handsome reward for you, Sir Victor - he's a very rich man !"
Sir Victor thinks of the reward, steps up, stretches out his hand and pulls lustily. But the weight ! The man is too heavy ! He pulls his hardest but with horror he finds his feet slipping inch by inch towards the swamp ... he wants to let go, but the sinking man has his hand clasped in the iron grip of fear, and feels himself being dragged inexorably towards the quicksand ... it's giving way under his feet, and the man, still clinging, pulling, is sinking down ... down ...
The Lloyds 'rescue' is going to be the death of the rescuer.
PS - not a penny of bonus for any bank taking taxpayer cash.
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It all depends on who you are and what you do in bank.
If you're a cashier or a call centre person who had met their goals, why shouldn't they get a bonus?
If you're an investment banker with massive losses then no you shouldn't get a bonus because you've not done your job.
If you're the CEO whos bank was hours away from shutting up shop then no you shouldn't get a bonus.
With Barclays due to report it's 2008 performance on Monday (and bounses later in the week) - remember the following:
1. Barclays board members will not be accepting a bonus this year
2. Barclays has already said it will make a profit
3. Barclays did not accept any help from the UK govenment
Oh and #17 your comment (But even HSBC / Barclays would have gone under if the BoE liquity schemes hadn't been carried out) - this scheme had nothing to do giving money to the banks, it only forced them into raising more capital and thus forced many to go cap in hand to the BoE. Barclays was in good shape before this rule and even better after it
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It's not such a hardship taking shares at the current (probably discounted) market price.
Also when the directors say they will take shares in lieu they do not say at what price.
Director share deals can be structured through options/whatever so that they are offered at a discount to the prevailing market price, with the further benefit of CGT exemptions I suspect that the directors will be BETTER off.
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No-one minds a modest bonus of a few hundred pounds or a few thousand at the most if a job has been done well.
The objections raised here are due to the huge bonuses that have been payed by executives to themselves.
The outlook for the majority is a falling income and big bonuses at the institutes that lead us into this mess could result in serious protests.
Surely in the situation we are in today these institutions can show a tiny little restraint.
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any of the financial institutions that have received cash help from the tax payer should not be paying bonuses, if they do then the government should ask for the loans to be paid back immidiately as the loans were not given them to pay bonuses
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Barak Obama has it right. The only reason these banks still exist is because they have taken huge, incredibly huge, absolutely monstrously huge amounts of tax payers money. If they hadn't done so, they would have gone into administration.
As has been the case for other 'normal' companies, like Woolworths, their employees would have been made redundant, and the adminstrator would have sold off the assets to the highest bidder, and paid off whatever of their liabilities they could from the proceeds.
No employees would get a bonus.
Point is this. You should get a bonus for delivering performance. If you work alongside idiots (Scottish or otherwise), and they bring the house down, you suffer as well. It's part of your job to stop your fellow work mates from being idiots. Casually strolling in, after the event, and saying "...'course, I would have done it sooo differently.... now you're going to have to pay me a huge bonus if you want me to hang around and clear this up..."
You get your bonus once you've cleaned the mess up, not before.
Bankers earn so much money because they operate an effective monopoly. You get rid of this monopoly by REDUCING the amount of regulation in the market, not by increasing it. You increase competition, and allow banks to fail once they've messed up. Everyone moves onto the new banks, and life goes on. Fear of failure drives performance improvement. Knowledge of the safety blanket just makes risk-taking worse.
Hanging aroung in this purgatorial turpitude whilst we try and manage our way out by doing exactly the same thing that got us into this mess in the first place (extending credit and handing out big bonuses) is surely one of the dumbest things ever to have been done in the name of the UK economy.
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Mr Peston
According to the above, it is NO!
Please pass this back through you comms links.
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"... Greed is good... it is right.. it works.. "
http://www.americanrhetoric.com/MovieSpeeches/moviespeechwallstreet.html
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Pay bonuses to retain key staff? Where are these rats-deserting-sinking-ships to go?
I am not sure how far the Obama salary cap goes within the US system, but if it affects all the banks who have taken the taxpayer's dollar, it would seem to be very pervasive. Surely through the all-conquering "market" will it not have the effect of capping banking salaries everywhere after a while?
Sorry fellas - you have been in a sellers' market for years and years; but the Obama cap turns it into a buyers' market.
And in the medium term, the "buyers" will no longer be restricted to their 'you scratch my back...' mates on the remuneration committee.
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It seems all this whingeing and wrangling, and my goodness, threats of resignation even, is going on just because there is serious greed out there. There seems to be no sense of contrition either - "mea culpa? oh no, not me - and you need my expertise!" Maybe this is expertise that we can well do without.
As far as I know, none of the top UK bank people, let's say existing directors, because they are responsible, have expressed regret at the outcome of their doings and the devastating effect it is having around the world. They just seem to be toughing it out, ducking all the flack. Hardly any went to Davos. That is the sign of guilt in my book. They don't even want to defend themselves, because they have little to say, except when it comes to bonuses.
I think we should also tough this one out and say no bonuses in Govt supported banks - that's simple and just, and everyone understands that. That would settle it and then we can get on with the business of turning Britain around.
If the people are now threatening to resign because of not being paid a bonus this year, I think we do not want people with this sort of thick-skinned thinking on board. Especially if they don't feel responsible.
No-one is indispensable either!! There is always someone qualified to fill your place, always.
Why on earth should we pay bonuses to the rest of the employees in the failed banks either - can't they realise that they are part of the same organisation? Bonuses are paid if an organisation does well. Wasn't that the deal? Would they feel happy about accepting the bonus from a failed organisation. The decision should be "The company cannot afford bonuses this year". End of story.
I seem to remember at Prime Minister's Questions some weeks ago that GB confirmed there would be no bonuses in the Govt rescued banks. Are we slowly backsliding on this one?
Part of the problem of the banking industry and now the Govt to a certain extent is that they are making decisions and dealing with such vast sums of money. They seem to be sloshing the billions around now like it was confetti. Not so long ago a million was a vast sum.
The stock in trade of a bank is money itself, and that has an effect on the minds of people with power in the bank. It tends to dim the faculties and moral correctness, I feel. Other emotions start to play in the awareness. So in this industry I feel that regulation and controls - internal and external, surveillance, supervision and similar precautions within a bank at all levels need to be reviewed.
Risks such as defalcation, fraud etc. are probably well policed, but there are risks of mismanagement which can arise from the organisation structure chosen. Certain areas of a bank are extremely risk-prone. At the coal-faces of lending and investing in all the different markets in which a bank funtions, the risks are critical on a deal-by-deal basis.
But what about the overall risk profile? How well is this analysed and monitored? And how well does the board manage this? How much use of the technique of "what if?" scenario planning is made? And the assumptions!!!!.........?
These assumptions need to be agreed at board level surely, not just the preserve of the expert analysts.
Let's look forward to the forthcoming meetings of the G20 when these and other matters can be internationally reviewed and agreed, and let's avoid future crises as best we can.
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as per usual Robert very very apposite
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151, 154
Whilst I agree with your sentiment, I must reluctantly conceed that 145 has a valid point.
I have never worked for the RBS Group nor the LLoyds Group, although until five years ago I held a senior position at the head office of a 'big 6' (as at it was then) commercial bank. (I now work for one of my former clients outside the world of banking).
The sad reality is that if bonusses are not paid, the best staff will leave. I couldn't comment on the results of the newly formed Lloyds group (nor, I suspect, could they). My understanding of thr RBS position is that the vast majority of divisions were highly profitable in 2008 (with the profits being undone by a few hundred badly supervised individuals).
If the staff who have generated these profits are allowed to leave, I truly fear for the future of the bank. And leave they will- as 145 points out, banks will always poach staff, regardless of the economic climate- I've seen it up close. And when bankers leave, clients follow.
As taxpayers we need OUR bank to succeed, and paying bonuses is essential to that. I believe some of the high level payments are morally wrong. I also believe payments to some football players are wrong, but I wouldn't wish to see top players leave MY club because we wouldn't pay them the going rate.
We must ensure OUR banks keep there best straff. It's in OUR interests.
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Quite frankly it is surprising that any directors or senior executives, who were in part responsible for the calamity that has struck the banks, are still in post. By now more competent people should be in charge and they deserve bonuses if they are doing a good job sorting out the mess left by their predecessors.
The banks have been shedding staff and surely the first to go should have been those who did not realise that lending money to fuel an asset price bubble was bound to eventually lead to disaster.
The excuse that there was an entirely new situation is not valid. The 1929 crash, for example, was due to the bursting of a share price bubble fueled by buying on margin, a form of credit. The only difference between it and the more recent crash was that the assets were shares rather than mainly property.
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Why not make the bonus payable in share options to be redemn at the same time and price that the goverments shares are sold back to the private sector.
Surely that would concentrate minds on clearing up the mess and getting a good return for the tax payer.
It might of course cause a problem for a future goverment. But its not like Gordon has not already done that else where.
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It is the directors of the banks who agreed the policies of their companies.
It is those policies which have brought about the downfall of some banks and have lowered the value of my shares and stopped the dividends from those shares.
It is not a matter of receiving a bonus or not. There is no question about that: they must NOT have their ineptitude rewarded.
It is a question of honour. Do they have any? If they had any honour at all they would say, "I agreed the policies. The policies failed. I will resign WITHOUT any golden handshake."
Will they? What do you think?
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Robert,
Surely all bonuses should be, at least, put on hold until the banks produce comprehensive up to date valuations (and therefore systems that allow the government appointees to accurately oversee what is going on) on their loan books that must include all and every off balance sheet transation included related party ones.
I fear the banks will persuade lazy but highly paid government consultant to accept stress test that are so weak and inaccurate but provide 'answers' that are ifanciful and result in years to come even larger taxpayer debts that will fall on our innocent children to pay.
It is far better for us to accept a loss now than proceed without knowing the facts.
Why haven't the banks lLoyds and RBS included, been able (or wanted to) come up with accurate 'mark to market' valuations of their total loan books and other liabilities the pay they receive and tell us they fully deserve surely includes such a task being within their capabilities?
These valuations should be signed off by the directors, noting their legal duty of care to ensure accuracy and no collective amnesia or ignorance.
Only then will it be seen if these banks including Lloyds are actually solvent or totally reliant on continued and increasing taxpayer support.
Currently each of their loan books appear to be quoted on the fanciful 'held to maturity' basis which is so unrealistic given the way the banks have been hoovering up ever greater quantities of taxpayer money and then disappearing into black holes.
Does anyone really know what these proprietary trading dealers have been upto figures for outstanding 'derivitives' vary from $300 to 660 trillion and what all these debt instruments are.
Can any banker say with certainty that they have not given loans to collateral already at least 100% pledged to themselves or someone else?
Do the bankers really know all the other debts, secured and/or unsecured, of all their UK and foreign mortgagees?
Bonuses can wait until the casinos that have been our banks come clean.
The bankers unseemly haste to receive bonuses speaks volumes and we the taxpayers should demand delay until the facts are fully revealed.
It is my view that the banks need to be nationalised and stripped right down to their basics so that 'fractional reserve' and derivitives are under control and affordable.
Trust must be restored.
The days of 'creative accounting' and 'smoke and mirrors transactions' are past for companies that take our tax pounds to stay alive.
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Of course they shouldn't get bonuses. But it should go further than that. Independent Financial Advisers have to pay back bonuses from work that 'goes bad'. Lets make the bankers pay theirs back. That should be a nice little injection of cash for some worthwhile social infrastructre investment.
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I would like to draw your attention to some poetry by Jimmy Copeland from his Book of Vrse, Shoogly Table, which I feel is very relative to what many of us are going thro' at present.
THE TROUBLE EXCHANGE
"A remarkable place is the Trouble Exchange,
It is where you must go if you wish to arrange
To be rid of the burdens and cares that you’ve got.
When you’re right up to here with your own little lot.
You enter the market, stand round in a ring,
And you wait with the packet of trouble you bring,
You stand there in silence and stare at the ground,
And then risk a glance at the troubles around.
The rules for the trading are simple you’ll find,
Just lift any package-and leave yours behind,
It’s a matter of chance, you will find no descriptions,
So you just have to guess the extent of afflictions.
The packets of trouble, some tattered, some neat,
Lie waiting on offer the deal to complete,
There’s one you might risk, it’s the smallest in size,
Then you look up- and look in that sad owner’s eyes.
A remarkable place is the Trouble Exchange,
It never does business-now isn’t that strange?
There is never a giver, you won’t find a taker,
You keep what you’ve got and give thanks to your Maker."
Hope you enjoy and if you do please pass on to help others come to terms with their problems.
People who present their views on what has happened / is happening to cause such global economic problems and how best to solve them should be:
"A rhymer, an imagist, a creator
Of simple word pictures: a communicator.
Herein by such means let them try
To make us laugh, to make us think,
And maybe have us cry!
So let's see how it goes,
If we become onvolved--who knows ?
In ranging the emotions, from the comic
To the tragic,
Between us we might just find a -
WEE DROP MAGIC."
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I am just wondering what El Gordo is going to say regarding his last 'soundbyte'
No rewards for failure.
Going on his record of "No more boom and bust" - we now have bust
British jobs for British workers - he says this was not really what he meant to say
What does "No rewards for failure" really mean ?
We obviously have a PM that can't put two words together without stating the opposite of what he means.
So I guess what he means is - yes, the Bankers will get the bonuses
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Quite simply.......A bonus payment can only be justified if an individual has made a demonstrable and measurable contribution to the success of the company.
In the case of Lloyds, the Executive fail that test. In time, we will know if they have made the right decisions (ie Merger) and shareholders will be happy to reward them at that time.
If managers are not prepared to wait to witness the actual results of their decisions, then let them go. They are easily replaced.
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I cant believe that the leaders of the banking system, who instituted the mess we are in,could have the nerve to justify their entitlement to any bonus.I would think that there is a case for a return of previous bonuses and criminal charges against some of these fraudsters.They were all aware of the situation for some time yet persisted in there actions. Had this been in other than the banking sector there heads would have rolled and someone who could manage employed in there place, yet they persist with there dubious activities in declaring there intent to pay huge bonuses.It is about time they were made to join the real world,reduce there salaries and stop the bonuses until such time as the economy is stable.I do not believe that any man is worth 750k+ salay and 1mil + bonuses.I am a pensioner and would love a huge bonus at the end of the year,perhaps this may happen now I own a large part of these banks who are paying these large bonuses.Fat chance I think
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I agree that loss making investment bankers, on six figure basics shouldn't get a bonus- infact some of them are lucky not to be locked up and even luckier if they've still got jobs.
But modern banks are about a lot more than just banking. My husband runs an office for a vehicle leasing company which is owned by one of the big banks. The leasing company does very well, indeed if the bank folded my husband is sure it would be snapped up as a going concern.
My husband is on a very low basic income- way less than than the average UK salary, but this is topped up by incentive payments and bonusses, payed annually which make a huge difference to us. This is the same for all leasing companies.
Why should we lose half of our income because of the foolishness of some gready bankers? I understand the notion of 'collective responsibility', but can my husband, who rises at 5.30 am so he ensure all of the early pick-ups are properly valleted have collective responsibility for the actions of people hundreds of miles away and working in an industry he doesn't even pretend to understand?
There are tens of thousands of people affected by this - not bankers but insurance workers, car hire firms and many other industries. The banks bought them all up.
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I think even the idea of rewarding these people with bonuses at this time is outrageous! Say nothing of the fact that their irresponsible risk taking has had a big part to play in the state of the economy today, what about the rest of the public sector workers (which is effectively what they are now following the massive "bail outs") who are having to fight for any pay rise, let alone a massive "windfall" like this....
I think I speak for most of the country when I say "I think that these people should be penalised for their so called efforts not rewarded"
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No bonuses for these miserable bankers!
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Hello everyone.
For the past thirty-seven years I have worked as a Cashier for one of the banks now part owned by the government and the tax-payer.
I'm on my own and earn very little, but recieve a small annual bonus, part of which is always paid in shares.
This year the collapse of the share price has wiped out my savings. I retire in two years, and I have nothing left, nothing at all.
My meagre bonus is paid for going the extra mile for my customers, not for gambling with billions. My next two bonusses will now be all I have for my retirment.
I've done nothing wrong, but my life is ruined. All of my savings are worthless and I'm too old to replace them.
Perhaps I'm being selfish or stupid. Please could someone, anyone, tell me what I've done that I deserve to lose the little glimmer of hope I have left?
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An American suggested that the pound is finished and that Brit. Banks that find themselves in difficulties should be left to bankruptcy. His memorable quote being, "Why prop up Banks - so Bankers can buy more Masaratis's!" There is little comment from Tories or Labour - they are frightened - they know that financial collapse leads to a changes of Government. The Banks are key to a healthy economy. The Bankers claim that not paying bonuses will lead to skills going elsewhere - is that position much different to strikers in industry? At best - is it responsible? Bankers are human - do they have consciencies? Paying bonuses, mentioning bonuses or talking about delayed share bonuses currently is immoral - but greed overcomes everything and that is exactly what it is - NAKED GREED. Horrid isn't it! windmoney
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Remuneration for Senior Executives and Board members has become unrealistic compared with the benefits derived by shareholders but shareholders are not supported sufficiently by legislation to allow then to correct this, particularly in the USA which most people do not understand.
Because the USA has a very skewed system in favour of management (think who signs off on political donations, Boards or shareholders?), it has affected the UK also and not just in banking.
Anyone watching the climb in remuneration for Company Boards of Directors since 1997 will find it's is about 20% pa (or about 9x ) compared with the private sector general increase of c. 4% pa (less than 2x ) . Jobs in the Public Sector too, especially in Quangoes, NHS management, Local Authorities etc have also seen massive increases in pay plus pension payments (remember pensions)..
In High Street banks innovation isn't a prime consideration, good husbandry is. So Brown should provide for a maximum or cap on share of profits going to remuneration in the banks with senior staff in at £100,000 or whatever cap at £350,000 incl pension payments and other benefits but modified by their profit sharing formula low pay higher opportunity, high pay lack of opportunity)and the rest to shareholders.
Shareholders and depositors are seeing their returns zeroed and shareowners may have lost enormous sums of money due to current and former senior executives. Where divisions have accumulated losses restitution may be appropriate as (at the nicest) mistakes were made through incompetence.
With hedge funds (and Private Equity) managers usually have contracts which allow profits in the funds to be shared after a certain hurdle is reached but not losses. This is perverse as it will encourage in some (not all) a bet the bank mentality as the winnings so far out strip the losses (job, eventually lower commissions off lower money under management); these seem likewise to be inappropriate and the more competition changes this formula the better.
Brown has presided over a fall in the GDP, a truely massive fall in Sterling, interest rates being 'ordered' down with a cut in VAT of 2.5% to help lower CPI (principal purpose) etc so why isn't Brown's remuneration cut inline with interest rates?
Courage?
Leadership?
Brown should cut his and all Ministers and Labour MPs salaries, allowances, pension payments in line with the cut in interest rates (c. 80%) as they too can enjoy
(a) lower mortgages paid for by savers
(b) benefit of 2.5% off VAT.
Maybe Capt'n Courageous hasn't the 'bottle'?
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UK & US GOVERNMENT RESCUED BANKS' OPTIONS? GOOD TO BUY! WHY? APPARENTLY SHARE OPTIONS IN RESCUED SHARES ARE FABULOUS FOR BANKERS WHO HAVE OPTIONS IN A SYSTEM THAT WILL RISE AS THE PHOENIX !
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Guys,
I signed on here to have a bit of a rant, same as most of you by the look of things, but having read 181 maybe we should clariffy where our wrath is directed.
I guess there is a big difference between greedy fat cats doubling there disgusting salaries on the tax-payer, and ordinary low paid workers making ends meet. Especially when lots of ordinary folks have lost their life savings- there's no 'safety net' for savings paid and held in bank shares.
I would be in favour of a maximum earnings cap of maybe £100k for the entire industry, including bonusses- about 5% what the fat cats get at the moment.
I lost money in shares a few years ago, it's not nice but I could afford to lose it. Reading 181 is a bit of a reality check. I couldn't object to small payouts for low level staff who've lost everything else. Punish the generals, not the lowly foot soliders.
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83
I do agree that we will start to see a rebirth of mutual societies, hopefully in the not too distant future in a way that ethical investment were a bit laughed out a few years ago
May be all of those who are expected to receive the bonuses should all put them into a common pot used to fix whatever need fixing and they should be paid just the interest, even at 1% that would do me
We need to start about thinking and sharing equitably. Let's hope that the best thing that come out of this crisis is a more 'responsible' way of living.
Things will pick up and grow back, but not at the pace they did in the past.
I hope lessons will be learned but I am not so sure
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May be all the account holders of Lloyds and RBS could also more all their account to Northern Rock or the Post Office or to Building societies
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Robert
Bankers' Bonuses
I suggest that all bank bonuses should be paid in full as normal (top executives to cashiers). However, all amounts should be credited to the Toxic Bank/Fund.
Any eventual profit can then be divided amongst ALL contributors.
Nothing could be fairer.
Keep up the good work
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Why should top bankers get huge bonuses? They are very well paid (more than the Prime Minister and Leader of the Opposition combined).
Other people in society are taking a terrible hit - savers with low interest rates, part time working , much more unemployment, bankruptcy and some folk losing their homes. Maybe even some suicides.
In most jobs if someone makes a complete mess of things they get the heave ho. But of course not top bankers.
Perhaps these bankers should work in their Haringey branches. I wonder how keen they would be to visit some of the addresses that social workers have to visit. If anything goes wrong for social workers it is the sack and a kicking from the tabloids. Different of course for top bankers.
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185
Earning caps would certainly be a good idea, there needs to be a sense of belonging, at the moment the top few people hop between companies to make mega bucks, jump ship before they get found out with a large payout.
To some extent which the stock market losses are dramatic, I still have another 20 odd years to work so still a while to recoup my losses but others like 181 or some former colleagues that have just retired are losing everything and really this is not fair.
In the new order we also need to find a way of 'protecting' the weak and small, a handful play the stock market, they don't suffer, the little people do. A couple of weeks ago an interview with the previous chairman of AIG was interetsing. He is in his 80 and explained he lost several hundred millions of dollars. He said he was OK, he can get by and manage but that he really felt for his staff (although I am yet to hear he has created a trust fund of some sort)
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#185
Spot on.....well said!!!!!
#181
I wish you the very best of luck in the future ...like many you will need it!!!
TCP
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30# Whistling Neil
"sorry for Lloyds employees"
Why? Lloyds TSB are not blameless did'nt they have an off balance sheet conduit with 12 billion of unmarketable securities?
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#181 - you will have a state pension. There are MANY people like you. In banks and out. I go the extra mile with my "customers" to KEEP my job. Never had a bonus in my life. They don't give them to us.
Both my sister and I are teachers. She stayed in the state system and will have a reasonable pension. I left, work in a sports club, get paid far less. I stay in my job because I enjoy it, have less incompetence above me, am more independant. I am paid for 11 months of the year.
I'm not bitter - I accept the consequences of my decisions. My very first job was in a bank and I hated it so I left. This is real life. You have a job and many don't through no fault of their own.
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#181
Lovely contribution.
You have done nothing wrong just like many many non bank staff who are now in precisely the same position as you or even worse. Some of who are only in that position due to banks reigning in their lending facilities.
Perhaps some of your collegues in the trading arms could read your post and think some more on the consequences on their collegues of their greed and selfishness.
"Pay me my bonus (no doubt multiples of your entire salary) or I leave" - these are the selfish and greedy and bring shame and approbrium on all decent people working for banks.
A glimmer of hope assuming you are not a NR cashier is shares can go up and no doubt will as a recovery occurs. Dividends will be paid again when they can be afforded providing an income. Not what it was previously no doubt but something.
Maybe next year a profit will be made and then bonuses can be paid without a murmour of complaint.
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193- I take your point, but maybe your words are bit harsh.
Afterall, it's one thing to make a choice as to what you want from a career, and quite another to find that your life's work is wiped out by the actions of others.
I used to hold a fairly senior position in a commercial bank but left the industry to work for a client.
In many banks the annual 'bonus' is paid in shares, so every past bonus is now as good as worthless. Many retirements lie in ruins.
There are lots of reasons to resent bonus payments for bank staff. But for every six figure salaried suit with a company Merc, there are a thousand '181s'.
The average taxpayer has invested in these banks, and rightly expects a return, but the average bank worker has already lost infinetely more.
I would guess that around 85-90% of the total bonus bill in the average bank goes to an elite 5% of bank staff. I for one would be satisfied to see this 'elite' 5% (directors, traders etc) miss out, with the remaining 10% or so of the total bonus pot going to the highly deserving workers who are already out of pocket. This would reduce bonuses by 90% since last year.
Some of the 'Elite' may claim they have been profitable in 2008- well I'm sure thet will manage on their 100k basic for 12 months or so.
But let's not hurt the blameless branch staff.
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I cannot see how any bonus payments are justified, particularly to employees of banks in which the taxpayer has an interest.
This should apply to all employees at whatever level of seniority. The argument that some sectors of banking have done better than others and workers in those sectors should receive bonuses carries no force whatsoever.
The fact remains that without taxpayer funds the banks would have been sold or been allowed to to go under and many of their employees, as in the case of Lehman's, would have found themselves on the street.
Any funds available for bonuses should be retained in the business and lent to those sectors of the econonmy in desperate need of funding to survive and whose predicament was caused by the banks greed in the first place.
Those fortunate enough to be employed should be grateful that they have a job at all and the subject of bonus payments should only be revisited once this crisis is well and truly over and the taxpayer has been repaid.
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yes lloyds should pay me a bonus,i mean 0.08 on the internet saver account!!! wow how can they possibly afford it?also good old brown, the 1 eyed scots world saver....im the 2eyed english skint man!!!
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#189 we have not got a prime minister..we have an unelected leader of the labour party.
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192. At 3:42pm on 07 Feb 2009, Tripery
Please don't misquote me again!
If you don't like my view make a counter argument but don't misrepresent me,
thanks,
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196.
I think the issue is that whilst at senior grades a 'bonus' is just that- a carrot (and potentially a very juicy one), at junior levels it is often a 'stick'.
What I mean by this is that many junior bank workers are paid, say, £17k per annum- but this might be £15k basic and a £2k 'bonus'.
In reality it is expected that the bonus will always be paid- but management can use it as a tool to 'drive the whip'. Rarely, if an individual has really underperformed, the bonus may be with-held.
For junior grades the 'bonus' isnt really a bonus at all, it is a part of the compensation package that is removed as a disciplinary measure. In general the branch staff etc have done nothing to deserve such a sanction.
From a purely selfish point of view, I'm glad to be out of banking now, but I really feel for the people still involved.
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181 Mary1950 wrote:
''.... This year the collapse of the share price has wiped out my savings. I retire in two years, and I have nothing left, nothing at all.
.... I've done nothing wrong, but my life is ruined. All of my savings are worthless and I'm too old to replace them.''
That is how it works. I don't mean to sound off hand. Here - we were hit hard in the last recession and nearly wiped out. We lost a business, a professional career etc etc, Into six figures of equity disappeared. We also did nothing wrong. We closed down a consultancy business which still had demand on it but the same customers that were on the phone asking, in fact begging, for the supply of knowhow, had cheques failing to be honoured, or their banks were not allowing cheques to be issued. Our customers were household names. We had to move and start again, in a totally different sector. We paid all our bills but we were not paid. That is how it works. The problem with recession is it does not respect merit. It just hits arbitarily. Presumably when we were hit you were not. Presumably you, if you have property, still own it. You also still have a job and after 37 years service would recieve a reasonable payout if made redundant. Each recession hits different people. However, whilst I do not want to sound harsh, I personally oppose bonuses being paid out. It is however nothing, as usual, to do with me, the decision will be made by others.
168. Faraday1979
''... The sad reality is that if bonusses are not paid, the best staff will leave... ''
You are nearer to the game than I am. Thankfully. However - if it makes no difference how a bank performs, that a bonus is always paid, just what is the point of a bonus. It is not a bonus in the conventional sense in any way. So it is pay and should be treated as such. If that is the situation. Perhaps then more sense will prevail and such big bonuses will not be paid. And if the argument is the banks are too big to let fall, and too big to not let themselves pay out bonuses ad lib, then I have one suggsetion - Let them fail and buy them from the administrator leaving all the debts behind. Because if the facts are that they are infrastucture and cannot be allowed to fail then this will happen again, and again, there is nothing to stop it. But if they are infrastructure, and public owned, then gross bonuses are not applicable. The whole point of high pay or bonuses is based on the concept of risk, ie if you dont get the business in you dont get the reward. If there is no risk then there is no basis for high reward.
Until bank failures stop, and there is no reason to expect that process to have finished yet, the taxpayer is seen as the last resort, and a willing one. And to continue paying bonuses is not acceptable when the alternative to the taxpayer stepping in is collapse. I turn to the comment issue by one of the big US hedge funds in summer 2008, in which they said that the amount of debt in the financial system was of such proportions in the US and Europe that the only likely outcome was the nationalisation of the banks because only governments had the funds available to deal with the problem.
It is unlikely to be finished yet and the sooner the partygoers recognise the landscape is different the better. That also applies to HMG, who still are far too far behind the curve. The economy was pumped up on a bubble, the bubble has popped. The descent is to reality. There will only be muted recover, not a sharp rebound. Supply and credit is not the problem, demand is. There is activity in some areas, but not with big over indebted businesses who went the oversupply route.
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does it matter whether lloyds pay bonus,s or not?what ever happens the bankers will get the money 1 way or another, the real big issue here is that the whole system is rigged,is there really a recession? sure theres a recession for working class people, is there a recession for the bankers? is there a recession for wealthy people? ? i doubt it .. the whole system is a joke.
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Bonuses...yes why not?
Lets examine the evidence against this.
Bankers caused the collapse!
- Nope, at least not all of them. Most losses are on the investment side, probably caused be less than a thousand people.
Gordon Brown says its all the banks fault
- Well he would! If the banks really have screwed up, recall they were operating in a regulatory environment created by the former chancellor...oh thats Gordon Brown isn't it. If the rules of the system allow the bank to do something, don't blame them for operating within the rules. Blame the person who created the rules.
Obama is limiting US Bankers
- Actually on this one, I do agree that some limits are needed, but not a blanket ban. However, we should not just target financial workers, anything should be applied equally to all.
They don't deserve one
- Most bank staff are extremely hard working, dedicated and will have contracts that relate to bonuses ie meet this target get a bonus. Are people seriously suggesting we rip up employment contracts...hey why not target oil company workers, salesmen and in fact anyone who gets performance related payments.
They've lost millions/billions
- The big write-offs we are seeing in some cases are on paper only. They are write downs, effectively stating that the bank doesn't expect to get all its money back. In reality they may still be recieving payments on this, and should the loan get repaid, they'll be a bumper profit later on.
Why pay a bonus when interest rates are so low & charges so high
- Economics! The bank has to make a return in order to operate. If you are peeved at this, then vote with your feet and take your money elsewhere. There are plenty of the internet banks that #15 seems to think are easy to operate (that will be why several have issues then). There are also building societies that are owned by the members. The rates there aren't hugely better (but are still better)
I don't get a bonus for just doing my job
- If people don't have a bonus related job thats no reason to deny it to others. Its a free employment market after all. The bank staff either have it in their contract, or as part of their overall 'package'. Its an incentive to work harder. IF we are going to block it here, we need to block it everywhere.
In short, I agree that those working for areas of a bank that messed up should get no or minimal payments in shares. I also think the senior management should not be rewarded for the lack of oversight and control.
But it can't be a blanket ban. The core of a high street bank is its front line staff, who rely on bonuses. Take those away, and the expectation of them in future years too (if it happens now, senior execs might just not restore them in profitable years), staff aren't going to pile out the door, but they will be de-motivated, and that is going to hit the customer.
Read post #181 and that brings it home. You don't punish people who have done a good job because of a bad decisions hundreds of miles away in a different part of the business.
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#195 I've "hurt" no-one.
Reality is HARSH. At no point have I blamed #181 for any kind of crisis. She is in charge of her life, has "made her bed" as all of us have done; we all make choices, even if that is continuing in the same job for 37 years.
I assume you didn't arrive at a senior position by meekly being a "victim" and doing nothing wrong. You actually worked your way up, studied, whatever.
Part of my point is 181 should be glad to have a job in a FAILING business which had tax-payers' money ploughed in to save it. Many hard-working low-paid workers lost their jobs. Why should I/we feel sorry if 181 doesn't get a bonus? I don't think she should.
Should a teacher get paid a teacher's salary if, through no fault of their own, there aren't enough children and no job?
If your client goes down the drain will you expect the tax-payer to bail him/her out AND give you a bonus?
Thousands of people have lost all sorts, thousands have risen above racism, sexism, ageism, ill-health and any other hard wall they've hit. This is what adults do in real life.
#194 has answered the rest.
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195. Faraday1979 wrote:
'' ... it's one thing to make a choice as to what you want from a career, and quite another to find that your life's work is wiped out by the actions of others...''
Could not agree more. That is the reason that a governments number one objective should be to mitigate the effects of a downturn, - which is inevitable because it is part of the cycle - not amplify it. We now have a conservative government, early nineties, which wrecked the UK economy and a labour goverment which has apparently taken it to the next level of wrecking. The issue is buffering downturns by accumulating wealth in the upswings and dampening down excess before things peek. But it would appear that incumbents cannot resist handing out the buffer in one form or another, as tax breaks or public spending growth, or funding a war(s) nobody wants other than HMG. Recessions hit arbitarily and those it hits are hit hard. It is not far removed from the Aztecs letting a little blood to appease the gods. It is all the worse for truely dismal economic management.
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No 1 kiki_dread
Good idea - to" dump them like a sack of potatoes." - a sack of bad potatoes. I once
smelt one bad potato. It was one of the most disgusting smells that I have ever smelled .
When I read your blog I could almost smell
again the disgusting stench that came from that one bad potato. Lloyds is only one potato. Think we'll have to sack and chuck the whole corrupt crop before we can breathe clean air again.
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203. brownloadofrubbish
''Bonuses...yes why not?... etc etc''
I very much doubt that the proposal is that some recieve bonuses and some do not which appears to be the basis of your argument. In fact with NR, the proposal is - as I understand it - all recieve 10%. All cannot be key workers, all cannot have done well. If the bonus is not a bonus then don't call it a bonus. If it is a bonus then it is a bonus and subject to the vagaries of guess what - profit and performance. Its bank management at fault not the English language.
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200 At 5:10pm on 07 Feb 2009.
I take your point but would ask you to consider the predicament of similarly placed employees at the lower end of the remuneration spectrum who have lost their jobs for no other reason than their company's inability to obtain finance as a result of the crisis caused by the banks.
Many innocent and blameless individuals including some of those employed in the banking sector are going to lose their livelihoods and some, their homes.
Now is not the time to justify bonuses for even this level of bank employee who, whilst blameless, has to suffer the consequences of management failure in much the same way as the rest of us.
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Isn't this a case of the three Rs - they want their Rewards, they know their Rights, but as for taking any Responsibility - forget it. Also seems to me that even our Government have this attitude so with that example - what else can we expect! Not sure any other party would be any different - unfortunately.
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# 198
I could go on about this in great detail, but we've NEVER had an elected Prime Minister. The system of elections that we have results in the leader of the majority/largest party being invited by the Monarch to become PM and form a govt. The party leader could be Jeremy Clarkson MP, and he'd still be asked to be PM :-)
I'd point out that that in the 20th Century alone all the below become PM during a Parliamentary term.
Lloyd George, MacDonald, Chamberlain, Winston Churchill (first time round), Eden, MacMillan, Douglas-Home, Callaghan, Major
Admitedly a number of those did call an election shortly after, or win the following term. But in short, Gordon Browns position is nothing new in British politics. I don't recall a similar outcry being directed at John Major.....
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# 203
"You don't punish people who have done a good job because of a bad decisions hundreds of miles away in a different part of the business."
No? So all people who have lost their jobs - this isn't a punishment, but not getting a bonus is? or they just weren't good workers?
Is this the brave new world - banks, bankers and their employees (and their bonuses) are untouchable? But the rest of us - go jump?
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Instead of giving them shares why can't the bonuses be paid in the conduit's CDOs on a mark to maturity basis?
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Robert consider your own bonus by quieter reporting on Alt-A mortgages. Mind you, they will still blame you even if you do.
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I am disgusted with the reporting in britain of this issue. the man in the street is being fed the story that a banker is a cigar smoking city fat cat .
The majority of bankers are low paid, they work form 7am to 12pm, do not get paid overtime some are are call centre workers, machine workers, warehouse people. Part time workers, Students. People providing a professional service to customers with little support or reward.
If we take RBS as an example in the majority of the business underlying profit has increased. Lots of staff have performed exceptionally , without profit sharing that was guaranteed by the previous board the staff are already facing a 10% pay cut.
Most have had their entire life savings wiped out by the drop in share price.
I agree Action does need to be taken to stop the silly bonuses paid to the top tier but banks are commercial businesses and must have market relevent remuneration scheme.
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#203
It is remarkable how those in the banking industry consider themselves to be a special case.
I will not get a bonus this year either because my non finance industry is in recession and the company targets will not be met, not because of my personal performance I might add. The company simply does not have the money.
Maybe I should ask the government to 'top up' the liquidity of the company I work for as well so that I can get a bonus as well. Presumably you do not object to that?
Hey why not cut out the middle man and ask the government to give everybody in the country 10% of their salary as a'bonus'.
Actually I dont expect a bonus and I am not complaining that I will not get one.
I understand I need to concentrate on keeping my job, that will be my 'bonus' for this year and I will be grateful for it frankly, that alone will keep me motivated to do a good job for my clients.
You come from Mars as far as I am concerned.
Jericoa
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There should be no bonuses for 2008; they should only recommence for 2009, and then only if performance warrants it.
Coastalhallie.
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It's a crzay, crazy world when a banking-induced depression gives huge rewards to those who created the mess.
Bankers beware -- when the revolution begins it will be you who are the first to be shot.
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The government is to blame for banks paying bonuses. I am a retired bank employee who received profit sharing annually providing the bank profits were in excess of an agreed percentage of capital employed. I received profit sharing most years until 2002 and if I took shares instead of cash and kept them for 3 years I did not have to pay tax or national insurance on the value of the shares. Employees who took cash had to pay tax and national insurance on the cash sum. In 2003 the labour goverment stopped this form of profit sharing and I was paid a bonus dependent on my targets. Ever since then bank staff have been given targets to sell bank products. According to banking job adverts in the national press up to 30% of their total salary can paid in the form of bonuses.
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these men who actually got us into this position with their greed and also the greed of the banks deserve each other,yes i agree bonuses should be paid but much less than originally thought,public opinion is strong and i think their reputation would be enhanced if more thought was given to this principle,if the large bonuses are paid who is to say the skilled labour wont leave anyway after the backlash that will prob occur
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Post 181 don't get down about people in here we aren't getting down on you personally. However
1) If you have worked for a High Street Bank for 37 years you will get a reasonable bank pension on top of a state pension when you retire. many of us won't.
2) I will summise from your name that you were born in 1950, it ties in with your comments re retiring in two years. well I am afraid you may have to keep on working till 65 like lots of other people in the real world are having to do as their defined contributions pension was based partly on bank shares and they don't have a final salary pension which you will almost certainly get. My defined contribution pension pot went down 30% in 2008 by the way.
3) Re the shares going down well sorry but shares go down as well as up and that is the way of the world. Perhaps you should have sold them when they started to fall. Perhaps equally you should have diversified your holdings a little. My shares in my ex employer dropped over 50% last year. At 42 I will ahve to wait and hope they recover.
4) If there are redundancies to be made and your job is made surplus to requirement you will get a very large pay off. This something that very few others made redundant over the next few years will get.
I'm really not having a go at you, you feel let down and abused by the people at the top of your business and to be honest you have every right to be.
Trust me you are not alone, there are literally hundreds of thousands, if not millions of people in the same position as you, myself included. Very few us of have safe jobs and we are all equally at the whim of decisions made by senior management.
Many have big mortgages to pay, children to support, a pension that isn't a defined benefits one like you will get and if they are made redundant will get much less of a pay off than you will.
The reason people are angry is the same reason you are angry in that we, just like you are having to pay for the chaos caused by the same few people who brought down your bank and orthers along with the actions of our government.
Many of us don't have defined benefits pensions, don't have 37 years service with one employer that means that if we get made redundant will see a pay off not far off 2 years salary, many of us have large mortgages and families to support.
We see ourselves and our children paying for the mistakes of these bankers and the Labour government for decades to come.
We will have to work till we are 67 or 68 to get a pension from the state that is likely to be worthless and a defined contributions pension that will be worth little more.
I am sorry for your predicament but many of the angry people in here are just as worried and just as scared as you are.
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181.
Mary1950:
...
Perhaps I'm being selfish or stupid. Please could someone, anyone, tell me what I've done that I deserve to lose the little glimmer of hope I have left?
Mary
You're neither selfish nor stupid...
You've done nothing wrong...
However, like many of your colleagues, you invited your customer to 'Customer Service Reviews', where you knew that you Advisers were 'selling' loans etc to vulnerable individuals who in the main were feckless and weak... You pushed mortgage products and in your innocent way directed the country to the brink of collapse...
Did you really need your Line Manger/ Area Manager/ Regional Manager to explain what was happening - or were you happy to 'J F D I'? In the process you were happy to receive the rewards...
Mary
It's the system...
How much did your Manager say he/she had lost? Was theirs not a self-indulgent way to behave? Do you really think they care...?
Think about it...
You were never meant to reap the rewards - they are reserved for the rich and powerful - the elite, the talent, the coterie...
Correct, you've done nothing wrong... Learn to live with it...
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Lloyds Banking Group.
The Board of Lloyds TSB stepped in or were forced to announce the take-over of HBOS to avoid the most catastophic run on a bank in UK history. The Norhern Rock fiasco was avoidable if we had had even semi competent regulators.
The reason the directors should not get bonuses is
[1]that their contratcs will contain an element of share price - its just tough they were there when the market crashed.
[2] I suspect they will not make their 2008 profit targets and that is the key element of bonus payment. You can't have it both ways.
[3] They should be more sensitive to the real economy.
I don't buy the view that you need to keep these teams together - there is sufficient talent avialable to run conservative new style 'narrow banks'
However the Lloyds Board did do the UK government huge favour [yes - over time they will convert that to substatial profits - hopefully] They 'bought' a bank without any time to do any real and meaningful due diligence. A bank that was a serious busted flush. Worse in many ways to RBS - they were mainly guilty of overstreatching in an ill timed aquisition. The HBOS business model was bust - sad really because until the merger both Halifax and Bank of Scotland were very conservatively managed businesses.
Tragically, Robert your own part in this debacle is not without question- you are guilty of some very irresponsible reporting and comment. I don't buy the line 'I am only the messenger '
I do however think that almost all bank's executive directors[exclude Standard Chartered and HSBC] should give up bonuses or take them on a delayed basis but not converitble to cash for at least 3 years- not one year assuggested.
Unfortunately the present Prme Minister is in no position to take a moral stance. He is culpable and must share a great deal of the repsonsiblity for the mess. He renderd the Bof E impotent and set up the FSA which has proved from day one to be incapable of decent commonsense based regulation and oversight
Unfortunately banks have to be a special case - maybe we will get back to proper conservative bankers running banks
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veryfaraway,
You correctly state in 204 that you "have hurt no-one". I didn't mean to suggest that you had, my earlier post was more of a general comment as in, "let's not collectively hurt the already damaged bank staff". If this offended you, please accept my apologies- it wasn't intended.
I think the key difference between the people you refer to in 211 and today's junior bank workers is that most folks 'only' lose their jobs. I say 'only' with some hesitation as to lose your job is a terrible blow, but the bank staff have also lost their life savings. They have nothing to fall back onto.
Blocking junior staff bonuses this year will achieve nothing. At a rough calculation it will recoup maybe 1/1000 of the money invested in UK banks by the taxpayer. But it will do so by taking from the single group of people most hurt by the events of the past few months. Don't get me wrong, I'm all in favour of senior staff (which I once was), bearing their share of pain- they can afford to.
But also let's not forget that UKFI, the vehicle by which the government has invested taxpayer money in the banks, is indeed an investment. That is to say that we, as taxpayers, should expect a return on our investment in years to come. I'm sure we will get it. This was indeed an investment, not a cash gift afterall.
Hoping you all have a good Sunday.
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How do I feel re bonuses!
My MD said except a 50% cut in wages and hours or redundancy at minimum.
At 57 and 24 hrs to decide and told its due to the downturn and the company's position.
So why should any other loss making company give its staff a bonus upon profits it did not make.
This is the economics of the insane.
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214. dugit2008
''The majority of bankers are low paid, they work form 7am to 12pm, do not get paid overtime ....
... Most have had their entire life savings wiped out by the drop in share price.... ''
Notably they are still in a job. I imagine they work a 37 hour week or similar. And certainly will not be working in excess of the EEC working hours directive. They will be paid in accordance with their contract of employment. If they have to commute to work that is not unusual. They may have recieved shares as some employment deal. They may have bought some of their own accord. None of this has anything to do with the taxpayer. If bank workers have a gripe with their employers they should raise it with their employers. If they have a problem with their share value they should raise it at the AGM. Why do you expect the taxpayer to accept footing the bill in whole or part for bonuses. Some of these bank workers are still in a job because the taxpayer has stumped up the cash, not because of their employers. A little thanks for the billions put forward and respect for the taxpayer would not come amiss. Some of this taxpayer money will be coming from workers on the minimum wage. Perhaps you would like to consider just how banks behave with individual customers in trouble through no fault of their own. Do you have any idea at all of what goes on? It does not sound like it. If these workers are not happy they can look elsewhere for work and see if the grass is really that green.
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I'm afraid I simply can't subscribe the opinion that unless the upper levels of management are remunerated these huge sums they would go elsewhere.
It assumes that because they are paid the colossal salaries with juicy bonuses they are the brightest and the best. I think we can conclusively put that one to bed now... A sense of self importance they may have, but the best brains I am afraid work elsewhere.
Academics for example, work for far lower levels of income and can actually claim to be amongst the sharpest on the planet.
SMEs have some first rate managers, time tested and truly battle hardened to the Free Market. They usually produce something too - the genuine backbone of the wider economy.
I know it's not apples and oranges, but some of these Directors would be in for the shock of their lives if they knew what others did and for how little they did it for.
What we want is the fair reward for hard work, improvement and positive change. Reward beyond that is called greed. Failure should not be rewarded. The Bank Directors are batting on the stickiest of wickets if they accept the bonuses.
It is like feeding the hand that bites.
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The government has destroyed this country and its economy.
No bankers should get any payment of any sort whether those bankers are low paid cashiers or high ranking directors.
The truth is all banks whether they took government money or whether they did not take government money owe themselves to the current tax payers and the future taz payers.
Had the british government left one bank to fail they would all have failed. Those working for banks are lucky to have a job and luckier not to have been taken to court for their criminality.
Had the government had any brains they would have established the northern rock as a safe bank and allowed all savers the opportunity to move to northern rock. The government should have just left the banks to fend for themselves and all savers would have moved their cash to a government bank thereby no tax payer or savers losing out.
The current situation is just absolutely stupid with bankers still living the high life, tax payer today and in the future chained to the national debt and the economy in ruins ( interest rates low, the pound weak, jobs at shocking levels ).
But then again if the government had taken actions on their banker friends then their would be no banker jobs to go to after life in politics.
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@Jericoa 215
I know you are only joking about the government giving "bonuses" to the working population, but you might be on to something.
Think about it for a moment.
Give everyone who has been in gainful employment for the last 12 months £10000, tax free as a Government incentive to give the economy a kick start.
A lot would just bank it, and the insolvent banks would accept it with open arms. Liquidity problem (partially) solved.
The rest would spend it, and the retail sector would accept it with open arms. So would the building trade.
Anyone else could use it to top any redundancy package they get! I can't be the only person to have read their employment contact very carefully recently...
Giving billions and billions to the Financial sector does seem a little like buying an arsonist a lighter because he has run out of matches.
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Lloyds are an excellent bank.
The bonus situation in the banking world is another matter.
It has been one of the factors which are now contributory to the situation in which we now find ourselves.
Bonuses are paid for results. Results in the banking world are more often than not gained on taking risks.
The elite if the banking world (who qualify for bonuses) have acted individually, solely in their own interests.
Risk taking - to increase their personal financial gain.
Huge amounts of money per year - on a personal level gained - by subjecting their the companies for which they work to huge long term problems.
The purchase of prime market products for example were signed off by bank executives who had no understanding of what they were doing and who were only acting on there own "individual" interests - their bonuses.
Getting rid of the bonus system - is key to getting the banks back on track.
It is essential to change the system in that senior bank employees work for their "employer" as opposed to using their "employer" to further their own individual interests as encouraged to do so by their employers at the moment.
coolaid
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When is this greedy overpaid bonus culture going to be halted.
The greed of the bonus culture has to carry some blame for the mess the banks/country are now in - risky investments etc.
Surely now that some of the banks have taken our (the taxpayers) money to keep them afloat bonus's should be cancelled until they at least have profit to share out.
I'm sure this is sticking in the throat of the man on the street who is currently trying to cope with the effects it is having on their pocket.
HOW DARE THEY USE OUR MONEY IN SUCH A WAY.
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The hopes & dreams of a generation of decent, honest, hardworking people lies in tatters.
Meanwhile, the good ship HMS Titanic, with the brave Captain Horatio Brown at the helm, sails serenely along.
Placing the telescope to his eye our hero proclaims " Bonuses - I see no Bonuses ".
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Re:181
I think most people here would empathise with your situation.
My issue on this subject is with the 'six-figure salaried suits' referred to by #195?
I have met a few of these at HBOS. Sales people who enjoy lavish lifestyles, with all the usual trimmings. I say enjoy in the present tense as nothing seems to have changed for them since the start of this crisis. Maybe their bonuses will be cut this year (which will save a few hundred K each), but it seems to me the anxiety in the industry is at branch cashier level, not with these guys who've taken more risk and done far more damage and to me that makes no sense. Lloyds haven't yet announced any job reductions at all as far as I can see so how long are they going to keep their expensive rotten apples for exactly?????
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To continue my point from 153:
What are the banks books like? Are they sitting there with huge loans owed to them by other banks that are being bailed out by us? Be clear, banks are not lending because they are broke, no, absolutely not, they are not lending because of the “hole” and a run will bust them. If we are filling that “hole”, it better not be lining their pockets. This needs to be investigated, as there is a very serious issue of confidence in our banking system.
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Well done Robert Peston.
We have all noticed how you have ramped-up anti-bonus sentiment in the last week.
There will now be an inquiry into our bankers, and about time.
RP is an important link between an infuriated public and a greedy, failed industry.
And well done the BBC.
Lets hope this inquiry has real teeth.
The public will no longer accept that 1% of workers recieve 100 times what everyone else earns.
We are all aware that financial centres are in competition with each other, so worldwide controls on bankers greed are needed, but that is a subject for another day.
Three cheers for RP.
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If Obama has the guts to put a cap on the greed of fat cat bankers and business leaders to only $500,000 per annum (which is more then he the President is paid), then why do our regulators and politicians not have the same courage to cap these bonus culture and rewards for failure?
This shows that a man of the type and likes of Obama is a cut above the rest!
If we start getting politicians of the likes of Obama in Europe then Europeans will vote for the Obama types in droves!
Big fat cat salaries and bonuses have not made the UK financial services sector a success. In fact the very opposite.
We have paid big salaries and big bonuses and we have got the worst peformance in the UK financial services sector in history.
Big bonuses and big salaries seem to have attracted big failures.
People get paid a salary to do a good job. If they do a bad job they get fired.
Most peoples contract do not contain any formula about bonuses.
In the 1900 to 1970s bankers did not get bonuses and they were lucky to get a Christmas Hamper as thanks. In those days the UK banks had their golden age
As for the excuse the fat cat executives give, that we need to pay big salaries to attract the best, the lesson learnt from the credit crunch is that WE HAVE paid big salaries but we seem to have attracted only the executive directors who have been failures.
There are thousands who are very able and would accept much lower executive salaries and do as good if not a better job of running banks and companies then those who have had these fat cat salaries.
Money does not always attract the best and if it does then greed is not the best..
If Obama can stop executive directors greed by a single stroke of his pen namely an "Executive Order", surely our politicians can do the same in parliament?
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re. #181 near retirement.
All of us a bit down the food chain are getting ripped off.
I would suggest that you aim your anger up the line in your bank.
Your employers have -for years- been suppressing your basic salary and making up the difference to you in shares and bonuses.
Two reasons for this~
1 -avoid tax (until loopholes get closed)
2 -reduce your eventual pension (it will be based on salary figure not gross income)
Why don't you talk to your union or get advice on whether you can get your historical salary re-evaluated to a more correct and accurate figure; that might improve your pension and give you some comfort.
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GEE I AM SICK OF PAYING FOR THESE SPIVS
IN THE CITY.
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I have had dealings with four of the big banks as an ordinary customer. One was downright dishonest defrauding my father and attempting to defraud my company. Another seems incompetent and awkward, refusing to honour their obligation. Another is understaffed an incompetent. The fourth always has helpful and cheerful counter staff and deals with my business promptly even giving away free pens.
Their business success does seem to correlate fairly well with my observations. I hope that the bonuses also correlate.
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Does anyone have a copy of a financial executive's contract that they can publish?
I can;t imagine what it says to enable these people to claim them after they've destroyed their companies (thereby requiring tax payers bail out) and driven the globe to the edge of a depression, but i want these clauses in my next contract with my employer!
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it's the economy stupid...........
testing post.. trouble posting
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what sort of salary do you need to live well ?
£100k ?
why do people being paid £250k need £1m bonus ?
or is it the rat race ?
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The banks have shown themselves to be immoral, greedy and incredibly stupid.
Considering the amount of chaos they have managed to create between themselves for the Western economies and considering the amount of cash that has been thrown at them by the government on behalf of the downtrodden taxpayer, I feel that bankers would do well to drop the idea of bonuses for a year while they sort out themselves and their businesses so they may begin behaving like bankers again and stop behaving like pigs in a trough.
It might be difficult for these people to swallow such medicine, but they should realise that the public has had just about enough of this inept self-interested behavior. It may be in their contracts that they get a bonus, but if was not for Joe Public, they would not have a business or a job at all.
There are currently millions of people suffering the consequences of the banking industry's bonus culture and I think the bankers can share in a little of our misery and misfortune - I'm sure they will be able to still put food on their tables with a simple salary of a few million quid.
Can the banking world show a little morality or are we to see them for the money grabbers and profiteers that they are? I think it is a sad day that in a national crisis we are still even talking about bonuses for a failed industry.
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What I cant understand is why thr government couldnt ring fence the savings to protect investors and then let the banks hang out to dry. They could create a national bank to give confidence in the system.
The current situation of a labour party throwing taxpayers money at banks where greed has been a byword is appalling. The savers who proped up these awful people are now suffering.
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223 Farady1979
No offence taken, I have a thick skin - of necessity. Likewise I mean no offence, but prefer to be direct.
220 and 221 have perhaps explained my thoughts with more compassion and precision.
I don't think # 224 would think her/himself more lucky than 181.
Why do you insist that bank staff have lost their life savings. Only bank employees have shares? Those who lost their jobs don't have shares? Those already retired don't have shares? We're all in the same boat there. As so many have pointed out, shares go up and down. To think otherwise is just plain daft.
Indeed if the tax-payer investment is to bring a return then no doubt the value of the shares will also rise...
I suspect that you are a gentleman who does not care to see a lady cry. But you are prepared to "collectively hurt the already damaged out-of-work" who have lost their jobs, and perhaps more, by adding the bonus insult to their injury.
Is 181 aware that there is a recession? Does she think she is the only person suffering? As the recession bites, people have less work/no work and suffer. That's the way it is; people have no choice but to get on with it.
And I cannot agree that "blocking junior staff bonuses will acheive nothing". It would give them a chance to see that they are part of a badly-managed company that has little interest in their financial welfare, whether they want to see it or not.
221 HunkieDunkie has phrased it far better than I can.
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223 faraday
'' .... most folks 'only' lose their jobs. I say 'only' with some hesitation as to lose your job is a terrible blow, but the bank staff have also lost their life savings. They have nothing to fall back onto''
They are still in a job or the discussion about bonuses would not be occurring. Usually if you lose your job your house is also at risk, as in some cases is your marriage, your family, your mental health etc etc. Many people, millions are due to lose their jobs. Have you ever lost your job. I would say not, you dont talk about it in the right way. Well done, you have completed the game without picking up the wildcard. However - In what way is it the taxpayers problem that somebodies commercial share portfolio has collapsed in value. Do you think shares are only held by bank workers. Do you think problems are only limited to the financial sector. It is predominately the financial sector and HMG that have created this problem. However almost everyone is due to pay the bill to some extent or other.
As I have posted before. The decision to give bonuses is nothing to do with me, so you may get your wish, and good luck if you do. But please do not ask for my agreement to it. I oppose it. My guess is in some cases shares will be given out not cash, lubbley jubbley. Quantitve easing of shares.
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NO bonuses, maximum salary £80,000 per YEAR (for the directors AND staff - they have NOWHERE to go), the same for politicians to help in the recession (including cabinet ministers' combined salaries) and "directors" of local authorities, and all other public sector employees.
If they don't like it, GOOD - because the young people coming through will do a better job.
This is NOT an anti-public sector rant. Get the capital gains tax rate up to 40% on entrepreneurs, the same as the rest of us pay on income (I prefer 80% for "entrepreneurs") These "entrepreneurs" manufacture at slave labour rates in Asia for 1p, give the local middleman 9p, and take the other 90p to cover "rent and rates" in the UK. They then win the Gordon Brown Oscar! Henry Ford - they are not!
But they know how to take advantage of a laughable tax regime, that I believe they helped to create through PR (""entrepreneurs" MUST be good") etc.).
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#228 king-althestan
Works for me in the short term at least to ease the transition. We will still have the tricky little issue of the long term unsustainable nature of capitalism in its current form though.
That question runs very deep when you get to think about it.
It is about time the silent majority got something back for their endless proping up of society, there is a certain restorative justice in your suggestion. When you compare it to 2.5% reduction on VAT a significant tax rebate for all those earning less than 50k a year say would likely be much more effective as a general stimulus.
Add some serious and well focused infrastructure spending onto that as well and it will be a start for some sensible measures not to 'get back to where we were'. That old model has run its course, but to ease the pain and buy some time to start something that will look rather different than the current global economic model.
We need to keep the innovation the current economic model creates but dump the baggage that comes along with it.
And here is the good news, we will all need to work less hours and be less obsessed with junk with a limited shelf life that does not bring us any real pleasure anyway.
Sound good?
Jericoa
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What the Dickens is this all about?
Surely something will turn up?
But then perhaps not?
Many years ago I formulated my fundamental theorem of economics. I expressed it as follows:
Annual income £20, annual expenditure, £19, 19 shillings and sixpence, result happiness.
Annual income £20, annual expenditure, £20 and sixpence, result misery.
But we must remember that this is the advanced course and take care to ensure that we encourage the apprentices who aspire to this great truth with an occasional bonus even though they might not have quite grasped it yet.
Unless of course, some other option turns in the general direction of up.
Wilkins Micawber Esq.
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re #215
dear me, you seem to be resorting to personal insults. From mars indeed :-)
anyway, the point is that I am not trying to state banks are a special case. Far from it.
One of the key things I was trying to get across is that any bonuses must be limited, reasonable and only for those in areas that have done well. I suspect if you looked at RBS in detail that many of its companies (Insurance, Retail Banking etc) have met the targeted objectives.
Equally, if we are to go down the road of blocking bonuses etc, it must apply to all. We must not target just the financial sector.
At the moment banks are an easy target, especially as the political classes are using them as a whipping boy for their own mistakes.
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@ 181 Mary1950
In answer to your comment, the frightening economic position you're in is because of a culture of greed on the part of people in banking (and elsewhere, aided by government in general) and what you describe is truly unfair, as many people are finding in their own case.
I hope that this government will take into consideration your deep shock, it comes across very clearly in what you write.
I believe one way to help people who are living in a nightmare of uncertainty would be for banks to restore trust. This can only happen when greed has been controlled once and for all. That is why the majority of comments on this blog are demanding that bonuses should be stopped, especially large sums of money to bankers who seem incapable of knowing what the real value of money is!
Personally, I'd like to see some of the people who are now immensely wealthy as a result of their insane greed put in prison. Only then will I have any trust that banking will genuinely be too important to fail, as we're being told. My suspicion is the opposite, that banking has become too big to be anything but a burden.
Other contributors have offered some practical steps you can take so I hope that there'll be some improvement in the future for you.
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Nay, nay and thrice nay!
No bonuses-end of!
Increase salaries for low paid, ground floor bank workers.
If the greed of the upper levels means they will leave if they don't get their bonuses, then let them go-straight down to their local dole office-I can imagine the reception they'd get from someone who has lost their house/job in recent months!
If bonuses are that important to these leeches, company loyalty is obviously not.
I wouldn't want someone like that working for me!
Am I supposed to feel sorry for these people that they'd have to cancel their orders for luxury cars and boats?! Especially when one bonus alone would easily buy at least one house at today's prices!
No good.
This should not even be occurring-and as for employment law, if we have to assimilate employment law changes on an almost daily basis, then the law can be changed very quickly on this point.
I'd ask why this isn't happening, but I would imagine to get it changed would mean approval being required from people linked to these fat cats in various ways!
Cynical words, I know, but I'm so very angry that this is even being discussed when so many people are losing their homes, and being reduced to squatting and subjected to eviction through no fault of their own. Decent, hard working folk all their lives being hauled out of their homes by bailiffs.
HOW DARE THEY EVEN SUGGEST A BONUS?
Ludicrous!
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Jericoa
I wish Gordy and co had listened months ago when loads of us suggested and keep suggesting sweeping reductions to income tax for exactly the reasons you suggest.
Tax rebate and tax reductions would keep far more people in work and in their homes.
Surely this is more cost effective than spiralling benefit payments?
These arrogant bankers should be sacked immediately-no bonuses for any of them!
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225 Glanafon
"I imagine they work a 37 hour week or similar. And certainly will not be working in excess of the EEC working hours directive"
What planet are you on !
"If bank workers have a gripe with their employers they should raise it with their employers"
Who said anything about a gripe, I am just saying that a fair salary should be paid.
"just how banks behave with individual customers in trouble through no fault of their own"
Whose fault is it then !
"If these workers are not happy they can look elsewhere for work and see if the grass is really that green"
Unfortunatly that is already happening, recruiting bank staff is near impossible at the moment
Where was the thanks from the taxpayers the tax revenue from the banks paid for the national health service ! . The taxpayers govenrment has caused this mess with ever changing capital requirements and rumour mongering and quite rightly has had to support the banks. The Govt will make a fortune out of the cut-price shares they have obtained and the banks will continue to make huge tax payments over coming years.
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OK, so my post at #78 was referred for some reason.
The gist of it is this (apologies if various other people have made this point) - not so long ago you were telling us that the whole point of UKFI was that the government would be able to have no influence on the banks.
Now you're telling us that Gordon Brown can effectively set the bonuses for bankers via UKFI.
So were you mistaken before? Or is there some other reason the truth didn't come out originally?
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This is and should now be a non issue. Banks bailed out by the tax payer should give the employees a choice a bonus in exchange for redundancy or continue in their current role and forgo their bonus.
Let's see how many decide to opt for continued employment........
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One other suggestion...any banker who wants to earn a bonus in future must prove that they have helped 5 customers a day and lent to at least three new pppl in any week. All this must be documented including 'Happy Sheets' to record customer satisfaction. When they hit their weekly/monthly quota then they get paid, otherwise they get a minimum amount, in line with civil service pay scales.
See how quick that will get the banks lending again and restoring public confidence!!
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Having looked at most of the 500 letters
just on this website 99.9 percent of whom
where fuming about any bonuses it reminds me of the poll tax and all the events that happend. so much so that even mrs thatcher had to give way to general public thinking.
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Let's put this in perspective. The finance industry is a pyramid, but more so than other industries. All the publicity naturally is about these 'fat cats' with telephone number 'bonuses'.
However, for every 100k bonus pocketed by 'revenue generators', there are another 1,000 employees working in back-office, IT, admin who put in at least 3 or 4 hours a day over their 35 hour week with NO overtime. Imagine these militant transport workers doing an extra minutes work without getting paid!
Now lets look at 675 hours 'unpaid' overtime every year - If your back-office worker is on 35k a year, thats equivalent to about £19 an hour. Most people expect overtime at time-and-a half, but to be stingy, let's say standard time.
This 35k back office worker has just done £12,825 of unpaid overtime. He doesn't expect to get it all back, but maybe 6-8k worth of bonus goes some way to compensate him/her.
Nobody needs a £2 million bonus, but unfortunately that is the market - Same way people moan about Premiership footballers on 90k per week. Ask yourself can you kick a ball like Ronaldo? No. He is paid according to supply and demand.
I am not jealous of the fat cats bonuses - It's their pension pots that get my goat!
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#181 we are all responsible for our own circumstances. you could have sold your shares at any time over 37 years you chose not to.following a divorce a few years ago i took my share of the equity in the house and travelled for 9 months spending it all and a bit more again my choice. i now have nothing and wonder whether i will be working the week after next but i am happy if you have nothing you have nothing to lose. i now live within my means and will never get into debt again .
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you have to laugh at a treasury investigation into bonus pay at banks.because "people are upset about it" well how about an investigation into energy companies that are ripping people off every second of every day.and theres a few others as well in rip off britain.it really seems odd to me that a government can suddenly have an investigation into a system ,approx 7 or 8 years too late, because "people are upset about it" not because there is something drastically wrong.,and complete incompetance from the fsa and the treasury.This government is just thrashing around ,pulling levers,in a vain attempt to appease a fed up electorate.
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#258 35k a year!!! wow i feel so sorry for you, wheres the next foreign holiday going to come from.?
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#261 - If you think 35k is a lot of money then you obviously don't live in London. Take home from 35k is less than 2k a month and rent for a dump of a flat is 900 a month plus heating, light, council tax, 100 quid a month train fare. Soon goes...
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I believe that senior Execs should receive a bonus but that it should in a meaningful way relate to short term and long term Corporate performance. To that end the annual bonus pot should always not exceed a fixed percentage of the dividend pot allocated to ord shareholders - short term. No dividend no bonus and so on. Further, not less than 50% of the decided Exec bonus should be allocated in shares not disposable within 3 years - long term.
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#262 lived in se8 for 47 years ..does that qualify? 35k a year for pushing a few bits of paper around is a lot of money,try doing a proper job producing something.theres plenty of people in london on a lot less than 35k my friend, your the perfect example of whats wrong with the banking industry..greed.
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No bonuses for bankers!!!
But it is argued that it is in their contract...
Had the generous taxpayer not bailed out these banks, the bankers would have been on the dole where their employment contract is worth diddly squat.
Now if executives and bankers want their bonuses, all of their decisions and transactions should be examined in the light of the crisis and if their actions then (where they took bonuses) was part of the problem they should be sacked for incompetence.
Let their own greed be their undoing.
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The banks, like Government and so many businesses, have forgotten the basic pricinples of housekeeping - if you haven't got the money you can't spend it!
If they (the banks) have made losses how can they afford to pay bonuses? Simply by borrowing more, or in this case being given it by the taxpayer.
Totally wrong.
My Mum could have done a better job of looking after our money.
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They deserve only to be sacked and replaced by decent hard working people who will run the banks for the good of the country, not for their own personal gains.
There is not a single bank executive that deserves a bonus, they did a rubbish job of running a very important part of the national infrastructure of the UK and we would be better of without them,
I am pretty sure there are plenty of people out there who would take their jobs on for a lot less wages and do it a lot better.
REMEMBER NO ONE IS INDISPENSABLE!!!!
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as an engineer if i do a bad job im sacked, ive never had a bonus in my life, except 1 xmas i got 40 quid.to make serious errors over many years is inexcuseable.I except there are decent people working for banks that dont earn mega bucks...but again,in engineering its not sustainable that we can be employed after serious errors of judgements.surely bankers should just accept that they have screwed up and move on.
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It looks like flash has no power to stop these bonus' or rather no bottle or motive (he is going to get voted out anyway and he no doubt wants a future banking job)
So what has he done - tried to deflect the the attention to AD with a costly public (smudge) enquiry that will tell us that these payments are wrong and unfair and makes the public further alienated and angry.
GIVE US A BREAK
AD says he understands the anger - NO HE DOES NOT.
Harriat Harmon I see earning an extra 100k from the tax payer via letting her constiuntcy home (surely this should be sub letting) thinks these bonus' are unfair as there are not many women being paid them - HOW OUT OF TOUCH CAN YOU GET,
SIMPLY BEYOND BELIEF.
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Re #264
"theres plenty of people in london on a lot less than 35k my friend"
Yes - there benefit cases & illegal immigrants milking the tax payer a lot more then the banks.
"try doing a proper job producing something"
I think there are a few hundred thousand people in London who would consider an office job to be a "proper job". I produce websites - does that count?
"your the perfect example of whats wrong with the banking industry..greed"
Why is it wrong for a company to make money? You want to make money are you greedy? The only reason it may look greedy is because of the numbers involved.
Oh, and by the way I am a city worker for one of the banks, on less then £35k and I would agree that £35k isn't enough to live on in London - I have to live in north Essex just to afford a place to live.
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YES THE SHOULD, but not to the staff but to the savers!
I have done every thing right, saving between 15 and 20% of my salary into pension pots. I have 8 different funds with different companies investing in different areas to spread the risk.
This years statement for them so far range from a 10% fall in value to the worset with a 47% fall.
My predicted pension in 10years time will be 12% of my current pay (which hasnt changed for 5 years) after 30years of paying in to the funds!
With out execption ALL 8 funds have anounced an increase in fees this year. The fees now range from 2.9% or 7.8%! These fees pay for the bonses along with a % of each trade carried out on my behalf!
The staff bonus pot should be shaired out with all savers as a direct ratio of the value of there funds!
Im facing poverty in retirment dispite saving above goverment guidelines!
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#264 - Good one! Bet you're sitting on a million quid plus worth of property then after 47 years. I am talking about a 25-30y old back office worker in the city on 35k a year. 35k gets you a 100k mortgage these days - I expect the commute from Newcastle (Where you can buy a 100k place) might be a bit much for them eh?
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#9
"The purpose of a bonus is to retain the services of 'good' staff - how is it possible to argue that the staff at any bank are 'good'?"
Having worked int the IT inderstury for 35+ years, I have only once received a bonus and that was a £1000 pound wedding gift that my employer at the time gave all staff getting married.
What I have had is pay scales that reflect my ability, before setting my my own company 5 years ago, I received good pay rises every year, and where I felt I was under paid I either found another job or justified a corective pay rise.
Getting a bonus for just happening to work for a department that did well or for completing a project on time is non-senciable
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For that matter Golden Handshakes and Golden Goodbyes written into contracts should be taxed at 80%
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#270 hey there wait a minute, you made a lot of sweeping statements there., my good friend is a tv engineer in surbiton he earns 17k a year, and i suggest he has to know a lot more about maths and economics than any banker would have to know. my milkman around here is on 20k a year..i can name a few more..Im sure your a clever chap, but dont make sweeping statements and essex is a darn site better area to live than this dump in se8!!!
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Why not give the money the bankers would have got into bonuses into a "savings fund", to be distrubuted to those people who depend on savings income. Could be a couple of thousand pounds each for every pensioner.
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Those Banks, which have received funding from the tax payer, should halt all bonus payments until they have paid back the taxpayer.
To those who argue that the bonus incentive is necessary for staff morale and better performance, they should be reminded that possible unemployment is a powerful motivator.
Do a good job, get paid and be thankful. Do a really good job and you may be promoted.
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Bonuses for bankers? Any bank that has received public money should not pay a bonus for 2008. Without public support, they would be unemployed.
Bonuses for senior executives? Lead by example: no bonus for 2008. Better than the dole.
Bonuses for staff in 'corporate & investment banking', 'capital markets', 'financial engineering', etc? No bonuses - this is where the toxic waste came from.. Let them count and be happy with bonuses from previous years.
Bonuses for staff in 'retail' or 'branch' banking? This could be the only exception. OK to pay their usual modest bonus, up to 15% of base salary.
Bonuses "must be paid" because contracts oblige banks to do so? Terminate any (how many?) such contracts with obligatory, 'non-discretionary' bonuses and offer:
- EITHER 2008 bonus + unemployment
- OR no 2008 bonus + re-employment at previous base salary and purely discretionary bonuses.
There won't be a rush for the door.
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This comment was removed because the moderators found it broke the House Rules.
p.s.
Forgot to say if Banks are contractually bound to pay bonuses.
NEW CONTRACTS TO SIGN MONDAY MORNING.
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77. NixinKome
"Hail to Bob M"
+
thank you.. if two people agree to something
that makes it official.
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Let them pay it buy government should implement 100% tax on people who earn over certain amount.
Also I doing understand these people being paid bonus for their performance; do we give bonus for negative or lack of performance as well.
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Today, on the Andrew Marr show, Tweedledum and Tweedledee, aka the Chancellor and the Shadow Chancellor, ducked and dived and danced around to avoid giving straight answers to Mr Marr's searching questions. But eventually, as usual, both agreed, claiming that this time round it was inevitable and proper that RBS, Lloyds et al should pay millions of taxpayers' money in Bankers' Bonuses. Does this make the waxworks pair accessories to daylight robbery?
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206. possumpam wrote:
Good idea - to" dump them like a sack of potatoes." - a sack of bad potatoes. I once
smelt one bad potato. It was one of the most disgusting smells that I have ever smelled .
+
I was going to put old / stink / rotten potatoes but that wasn't in the idiom and the thought would have made people puke.
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I don't care what contracts the banks have with their staff regarding bonuses, as far as I and many of the public is concerned, they have failed the depositor and creditor alike and they will not benefit at our expense. Failure means no bonus, end of. If any bank that I have funds in pays so much as a penny in bonus I will immediately withdraw all my funds and I would like to see others do the same. Arrogance has no place in this situation.
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Bankers have never been known for their intelligence- but even at their limited level, they should have got it by now.
They have been responsible for the greatest loss of value in the world's history. They lost that value because they were conned by some pretty average mathemeticians into believing they could change the risk paradigm. On top of this financial services became too important to certain economies and had to feed themselves by more and more transaction based activities. They even have the gall to say they must be paid a lot as they are the only ones who can get us out of this mess- what planet do they live on- we are in the mess because they did not have the brain power to understand what they were doing-and they still have not. They are even so stupid that they were seen lavishly entertaining themselves and their customers at Rugby matches this weekend- they just do not get it- because the one brain cell in the banking system went walk about a long time ago.
Much as I would like us to take revenge on the bankers by stopping all bonuses and freezing their pension funds- I have no doubt our gutless politicians will have gone to lawyers who have told them not to act as shadow directors or that employment law means contractual conditions must be met- this is easy to overcome- they were unfair contracts as so not enforceable-unfair as they cannot have been based on reality- cannot possible pay a bonus when £trillions of value has been destroyed and no bank has made a profit!! Tell them to defend it in court and hold onto the cash whilst the hearings take place.
There seems to me to be two good solutions doing the rounds just now- mutualise the banks and ban investment managers being rewarded on any short term basis. Mutualisation for RBS,Lloyds, Northern Rock and B&B would bring stability and automatically take away the bonus culture by making it clear what can and cannot be done. Existing shareholders could be issued with a suitable loan stock instrument that allowed them to recover some of their money when the businesses have recovered. The mechanism will be complicated. Our forebears were not stupid when they created the mutual for the likes of Standard Life and Aviva.
We must however stop investment managers taking money via transactions and hence stop the dealing rather than long term investment. This can only be done by a radical shakeup in the City and Wall Street but it has to be done if we are not to have an even bigger crunch in a few years time.
All this will have little impact if we do not start changing attitudes at school and colleges to encourage our talent to go into industry- if there is one big lesson from this crunch it must be that real wealth is created by industry not commerce (and definitely not finance) and so the heroes and the better off should be dominated by engineers and scientists- and definitely not City traders.
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Robert
Wasn't a comment made a couple of weeks ago about bankers being completely out of touch with the real world?
This just proves it!
And as for our politicians saying RBS (and Lloyds probably) should have bonuses-the right and proper thing to do?
Then they've completely lost touch too (if they ever were in touch with us common people)
Just say no!
Simple!
Exactly what retribution are they afraid of?
Get the investigations started NOW!
Show some leadership and courage. The nation requires it!
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253 dugit2008
225 Glanafon comment - I imagine they work a 37 hour week or similar. And certainly will not be working in excess of the EEC working hours directive"
dugit - ''What planet are you on !''
I am on this planet, not planet Bank. If contracted workers are being asked to work longer hours than the EEC working hours directive they should see their union. You are claiming a working day way in excess of the EEC working hours directive which is illegal. If they wish to voluntarily work excessive hours that is up to them, it is however viewed as ill advised by the EEC courts. Presumably they believe they will see some benefit from this strategy otherwise they would not do it. Choice.
Glanafon comment - If bank workers have a gripe with their employers they should raise it with their employers"
dugit ''Who said anything about a gripe, I am just saying that a fair salary should be paid.''
The salary is set by the labour market. Nothing to do with me. If a bank worker feels they are not getting a fair salary the answer is to raise it with their employer. That is the correct procedure.
Glanafon comment - just how banks behave with individual customers in trouble through no fault of their own
dugit - ''Whose fault is it then!''
You are very ill informed if you think that the only way a bank customer can have problems is through something they have done. Perhaps you would like to consider the case of somebody who suffers internal theft on significant money placed in trust on deposit with a high street bank. The procedure is that the matter is subjudice and funds are not immediately made good. I could go on. Further UK 3rd party liability law means that any consquential loss as a result of funds not being available is limited to zero. If you are in the banking sector I suggest you phone up your HQ legal office and make enquires, if they will talk to you.
I have the impression that a great many bank workers have been sheltered from the real world and do not enjoy the environment they are seeing. However this is an evironment a great many people have had to live with in previous recessions.
You comment that it is difficult to recruit staff in the banking sector. The effect should be that the labour market adjusts accordingly. Again - if workers are not happy they have choices, one of which is to look elsewhere. Presumably one of the things which gives some reluctance to this is the job protection and pensions and other benefits that long service give in the banking environment. Choice.
By the way the market for ethical products, which we operate in, is in sustained growth. Unlike the financial sector. Perhaps that says something.
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What everyone forgets here is that when the Bank's were doing very well, they were contributing vast amounts of money to the Treasury in the form of Corporation Tax on their profits. In fact the Bank's were one of the Treasury's biggest tax payers.
No one complained then!!!!!!
Grass roots staff in these organisations work hard to meet their targets and as the Government has said today (Alistair Darling interview on Andrew Marr show - Sun 08/02/09) most of these staff are on low pay, so why shouldn't these staff be rewarded by bonuses if they are continually exceeding what is expected of them in their normal job by going the extra mile.
Surely this will help the Bank's to turnaround this current situation and when the profits start to materialise in the future, they will once again be a big contributor to the Treasury. Who will complain then? I say no one will.
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Let's have a bit of balance in this argument.
First of all, as a Banker myself, I agree wholeheartedly that the fat cats at the top of the tree need to have their remuneration substantially slashed for the problems, but this is just around 1% of all employees.
The vast majority are hard working individuals, who have had two choices in the past 20 years; either embrace the sales culture (for which you will be rewarded with approx 30% bonus) or be managed out of the organisation.
The old fashioned Bank Manager, portrayed like Mr Manwaring in Dads Army doesn't exist anymore.
All of the Bankers have seen their status and salary packages eroded over the past 20 years (save the 1% above). The Bankers put the deals together, which leads to rich pickings for the Solicitors, Chartered Surveyors and Accountants. The Bankers are now the poor relations.
The guys that put the deals together, do not sanction the deals, this is done by credit/compliance who are not bonused on deal completion. We work within a policy and framework that is passed to us, and if we don't hit the targets, then we are showed the door. The policy and compliance is overseen by the "1%" mentioned above.
So in conclusion, things do need to change. I would happilly forego my bonus for a similar amount added to my package, which would be guaranteed and pensionable. I would still be worse off though than those who feed off my hard work, and much worse off than my peers from 20 years ago.
The people that need kicking are the fat cats at the top of the tree, not the average guy who is just a mere employee, who is over worked, over stressed, over targetted and significantly underpaid compared to his equivilent degree educated professional.
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280. musicbluedog
''p.s.
Forgot to say if Banks are contractually bound to pay bonuses.
NEW CONTRACTS TO SIGN MONDAY MORNING''
This has happened previously with so called blue chip plcs. Not financial sector as far as I am aware. Staff called in and told new contract tomorrow, you can have the sack and a payout or take the new terms, queue over there to apply for our old job. All perfectly legal and the unions are legless with it. Staff tend to comply as cannot act rashly. New terms and conditions worse than old ones obviously. Old firm Joe Suds Plc, new firm Joe Suds II. You just can't do too much for a good gaffer, and you can't do too much for a bad un. ; )
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Re #275
You say I've made sweeping statements.
I refer you to post #264
"35k a year for pushing a few bits of paper around is a lot of money,try doing a proper job producing something"
Pot.
Kettle.
Black.
Please, if you're going to try and take the moral high ground, make sure you've not dug a hole under it first for youself.
I believe that everyone is entitled to a bonus, if;
1. The company makes a profit
2. You've met your targets for the year
In Lloyds / RBSs / N.Rock casese, I would imagin that branch staff should be paid a bonus. The investment bankers and senior execs should not.
And please please people - not everyone who works for a bank is a "banker".
"Banker" is a terrible generic term. If Mr Brown and co want to punish the banks then make sure the right people get punished, i.e. the traders, investment people and the execs. NOT the frontline staff and back office people.
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The banks should NOT be paying bonuses after the debacle of the last few weeks. RBS is 70% government owned. If the government exercises its rights as the majority shareholder to refuse bonus payments, then this will put huge pressure on the remainder.
The culture of 'entitlement' regardles of performance has to change!
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Re #280
"Forgot to say if Banks are contractually bound to pay bonuses.
NEW CONTRACTS TO SIGN MONDAY MORNING."
If only it was that simple - little matter of employement law would stop that.
Personally, unless the bonus is defined as an amount or percentage (unlikley) then I would pay a bonus to meet the terms of the contract.
1p.
Thats all - it's above and beyond their baisc salary therefore it's a bonus.
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Pay them a bonus????
Nick Leeson caused considerably less of a catastrophe and he got the jail !!!
Were these executives not driven by the same greed and guided by similar gross incompetence.
Its unfortunate that the banks are having to pay off so many of their loyal staff.
I wonder how many of the decision makers will go, or is the chop only for the minions.
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#249
To suggest someone is from Mars may turn out to be a compliment soon the way the human race is going:). No insult intended just robust debate.
I agree that politicians are, to a degree jumping on the bandwagon of the growing resentment against the banks. They are responsible for regulation after all. They are supposed to be the ones who act in the general public interest and keep alid on those who are not.
The banks are money making busineses that provide a critical service to society, so critical in fact that they must always be tightly regulated.
I object to the bonus culture, not out of a sense of vindictive punishment for peope in financial 'services', especially those on the 'shop floor' but because a cash bonus culture should not be permitted in such an industry at all.
The temptation to warp the system towards whatever the bonuses promote is just too dangerous.
On the shop floor that is represented by the cashiers enthusiasm to sell you fairly useless payment protection insurance on a credit card with an interest rate of 15% (a white collar scam as far as I am concerned) in order to get a commision or a bonus.
In the boardrooms and trading floor it is represented by the huge personal financial gains to be had by taking short term decisions which have ridiculous long terms risks for the company for which you as an individual have no long term responsibility.
Let me re-phrase my objection.
No finance related industry should be allowed to have a cash bonus structure. By all means pay the professionals well on a salary basis and give them share options which can be taken after 5 or 10 years or on retirement to encourage them to make decisions in the long term interests of the company and stability.
But that is it.
Does that sound better?
Jericoa
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Re #285
"If any bank that I have funds in pays so much as a penny in bonus I will immediately withdraw all my funds and I would like to see others do the same. Arrogance has no place in this situation."
Really? Any bank - even one that makes a profit, like Barclays or HSBC? or are you refering to the banks which went cap in hand to the tax payer?
Robert - If your reading these comments please can you make it clear that not every bank has called on the tax-payer to bail them out. And some are actually still sound (having their books audited by both the Govenment and the FSA). A little balanced reporting would be nice.
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Once again Vince Cable is the only man amongst this westminster lot to speak sense.
http://www.dailymail.co.uk/debate/article-1138673/Vince-Cable-Bring-guillotine--bankers.html?ITO=1490
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It is immoral, (wicked, depraved, corrupt, dishonest) to even discuss or consider paying bonuses in the current climate.
The bonus I may have got (never more than 2.5% of my salary) will not be paid. Salary reviews and increases for the current year and into 2010 have also been stopped. The Company is polling employees to accept a reduction in salary. About 10% of our employees have or will be made redundant. The company is on the brink.
Yes, the Government can do something about it now, setting up a review of the banks will do nothing. Lets be honest, when the next election comes around many politicians will lose their jobs. Many will be looking for a job, probably with a bank, they will not wish to upset a prospective employer.
If £2000 had been paid to each tax payer, with the proviso to spend it, I would almost (almost) guarantee that the current crisis would be shorter.
I work in the construction industry, the Government, has slowed down the issue of funds to build schools and colleges. The banks are not lending money for PFI projects. The reported £1 billion bonus to RBS (and other banks) management / directors would free a substantial amount to get these projects started.
The one eyed (sorry, I am partially sighted in one eye), Scottish (sorry, the majority of the Scots are fine people, there are a couple that I would class as idiots, Gordon Brown being one of them. I apologise to all idiots they will probably take offence at being likened to Gordon Brown). Gordon Brown took (stole) money from my pension pot and the current situation has also decimated my pension. I now cannot consider early retirement, not that there will be any jobs to enable me to carry on after sixty five.
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Having listened to the Chancellor this morning on the Andrew Marr programme, there is one interesting point emerging – a fundamental flaw in the bonus argument.
Darling says that it is right that those involved in wrong doing should not receive a bonus. But he also said that those in banking who work hard and have done a good job should possibly be allowed gain from a bonus.
Problem. Many of these banks are now heavily in debt to the tax payer, which in my book should make them liable to the almost draconian pay controls imposed by successive governments on public sector pay. There are many in the public sector who do a good job but will not get a bonus. The banks have screwed us. Time to reverse that trend and make them fully accountable to their new owners – the tax payer.
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All we have had so far in the matter of bankers' pay and bonuses is the appointment of commissions. Just to begin to restore the credibility of the banks, we must have action now: dismissal of those responsible and the return by them of their previous bonuses, reduction in salaries for all the prinicpal executives and at the very most, limited bonuses in the future in the form of shares, which can only be sold when the taxpayer is repaid all sums due from the bank in question. But NO BONUSES NOW FOR ANY DIRECTORS OR EXECUTIVES.
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So they have to get their bonuses so Gordy can get his tax revenues so he can pay his spiralling upwards benefits bill?
Utter, utter tosh!
If all these people in the last few months hadn't lost their jobs and homes, there wouldn't be a rising need for benefits.
And who has caused this loss of tax revenue?
Pay the bonuses, but best recommend the recipients spend it on increased personal security.
Time these destroyers of the world were brought to book.
No bonuses + fraud investigations
The only way to avoid massive civil unrest.
Gotta do it Gordon-anything else would be a BIG mistake!
Does our PM really want to be lumped in the same bracket as these pariahs?
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I think whether or not you pay a bonus depends on how you see it. I would suggest that the bonus system in the banking industry is effectively variable pay that give the bank the flexibility to trim its wage bill when times are hard, and to reward staff when times are good.
I don't think a blanket ban on bonuses is a good idea. Banks do need to reward and keep staff who have made good decisions, or have provided exceptional service to customers. At the same time staff who have made bad decisions should not be rewarded. We need to remember that without staff who have made good decisions, the banking crisis could have been much worse.
What is needed is some system which evaluates each employee's contribution to the bank, and this system needs to be seen to be fair by the public as well as the bank.
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To the banker complaining 35K is not a lot, and others. The party is over. The financial sector has to shrink. For some. It does not matter what you have been earning. Sorry. It is simply whether you can get that income elsewhere. You still are not living in the real world. If you are turfed out and do not have transferable skills the minimum wage beckons, if you can get it. If not it is likely to be JSA and encouraged voluntary work programmes. I would suggest you make every attempt to stay on board. When you can post that you have landed a better job elsewhere I would take note of your complaint about 35K otherwise it is meaningless. The financial sector seem to think this is something new. This is not new, this has happened to a number of other sectors including manufacturing.
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The Banks...are 'dead', 'defunct' and 'no more' like Monty Python's dead parrots.
I'm tempted to go into the upper case tonal register of Mr Curzon...!!
The ones that collapsed are dead..the ones that haven't are effectively dead as well...
What they used to get they can get no more..... and they should have the ill gotten (advised used) gains sequestered as well.
(For once the issues are simple and their isn't any devil in the detail)
These bonuses were obscene in the so called good times ( or 'Deluded times'); they were also a major cause of the problem, not a symptom.
For what it is worth.....in the "New Banking Millennium" now dawning fitfully like the Age of Aquarius----I think execs and exec directors MUST have bonuses.
However I think their remuneration should be largely shares...with large proportions of salary in dividends or related to dividends.
Along with, importantly, time-limited abilities to sell the shares (lock-ins over a NUMBER of years, and the the larger proportion of time specifically FOLLOWING departure from the company) ---- with their shares having economic rights alongside shareholders, but (probably) restricted voting rights.
In other words align their economic interests with those of what we'd all call 'good' shareholders...restrict their ability to control.... most shareholders are not irrationally greedy, control freaks (can't imagine why that description occurred to me or what group I may have been thinking of!) and so being aligned with their proper interest wouldn't be too bad an imposition---- and if they don't like the job they don't need to sign the contract.
Bye!!
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Absolutely not. This whole 'bonuses for failure' culture, is like an incipid canker in UK 'big' business, and perhaps wider and deeper (or should I say higher?) that that.
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Dare I say you are slighghly missing the point post 289. Can you not see that the tax as paid on what has effectively been now proved as rather questionable profits?
My personal view is that if any bonuses are paid in the banking sector then its a rather perverse and cynical practice and the major shareholders should object to it. We will be effectively rewarding bad behavior and this attacks the very fabric of the British society.
Make no mistake this is not just an attack on decency and common sense but an attack on the very future of the financial market's independence.
This is not a reward for entrepreneurial activity and wealth creation, quite the opposite, its a reward for just turning up to their job. What do we owe these people??
If this practice continues it will be unequivocal proof of the markets inability to govern themselves and slap in the face of TRUST of financial institutions.
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290. r0berto
Why do you do it then.
It always amuses me when people say their job is problematical. Believe me the only reason you employ somebody is because you have a problem. If you didnt have an problem you wouldnt employ anybody, who in their right mind says I know what I'll employ somebody today for a bit of fun. When you can say there are no problems that need dealing with then that is the time to be worried because you will shortly be unemployed. Just something to watch for.
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re 269) sabotageANDsteal
Do you expect Brown to stop the bonuses, he will dance around talking big we are going to do something about it blah blah blah blah
He will get around the table with the bosses and cave in with an feeble compromise - he has a history of doing that.
Couple examples
I will make sure the companies pass on the benefits of the lower oil prices - result 10% cut in domestic fuel, even with the weaken pound they should be a lot lower.
He also did it with the windfall tax threat - talked macho I am not letting them get away with obscene profits blah blah blah, result a expansion on a pre - existing scheme.
To be followed by an edf man on the news saying it will be paid for in future price rises.
Gorden Brown has all the clout of a chipmunk trying to take on a battalion of tanks.
I will make an observation - labours millions in the red - a year to the next general election, banks not lending so what is brown going to ?
One thing he is not going to do is rock the boat with potential donors to the labour party election pot.
Note – Brown when he took office said give me chance to show you my vision of Briton, we have seen it now - on your bike brown you huffing and puffing buffoon and take your darling with you.
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I've got a child who's not very good with money, always in the red, receives regular constant bailouts, lends to deadbeat mates and never gets it back,... I think a career in Banking awaits!
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292 JadeWarrior
I fail to see your arguement that the front line staff still deserve these bonuses.
If RBS had not needed the tax payer to keep them in business and had managed to hobble along on their own would it as an institution still be happy to pay out £1 billion in bonuses?
Individuals on the front line may well have hit targets but their employer (RBS on whole) has failed and come within a whisper of total collapse. Darling himself has acknowledged that they came within hours of closing shop.
Regardless of how big or how little of a salary an individual is on, a bonus is nothing something you are entitled to come hell or high water. The fortunes of ALL RBS employees rise or fall with the performance of the company as a whole. In this case the company has failed miseribly with an £8 billion loss. One could not work for a company in any other sector whereby they could expect a bonus when their employee has posted its biggest ever loss.
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# 271 wombateye
Well said!
# 259 metallicinglewood
Thank you - I appreciate those adults who can see a little past their own nose and accept responsibility for their own decisions. They are the ones who pull the finger out when the going gets tough and keep the world turning......
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292. JadeWarrior
employment law etc.
re my post 291
You are just showing how little adverse experience you have had. You still are living in the illusion. Such trust is touching and shows a basically nice personality.
Suggest first rule when dealing with the enemy. Invert statements made and check if can be discounted. If cannot be discounted might be true. Not everybody is a con man but con men do invert. Tell me do you think there are con men about. Sociopaths are even worse. You definately have to invert everything they say. I can guarantee statistically that you know a sociopath even if you do not recognise them for what they are.
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181. Mary1950
My heart bleeds.
Why not look forward to you pension and be grateful.
I have retired and my income comes from the money I have managed to save. Interest rates down from 5% to 1%. Now that is a loss of 80% of income.
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For me the key to Lloyds' announcement is the word 'entitlement'. Bonuses are not an entitlement, they are a privilege that reflects the success and profitability of the business. And we are all suffering as a result of the greed and reckless arrogance of many in the finance sector. So why is it contentious that banks should be paying bonuses? Overall a disastrous performance therefore no bonuses.
I am on a bonus at work. My branch has achieved every KPI demanded of it but one so there will be no bonus this quarter. And that one is beyond our control as the recession bites. Is that fair? Of course not, but that's life. What sticks in my throat is that the architects of the disaster are likely to get their bonuses. And even the casualties, such as the former head of RBS, have walked away replete with a wad of our cash to ease their loss of prestige.
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#305. e2toe4
When will people get it into their heads.
SALARIES are for EMPLOYEES
BONUSES (DIVIDENDS) are for SHAREHOLDERS
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Enough of this within the box thinking. Think outside the box RP set.
1. We saved RBS. Yes, but see below.
2. They made nothing worthy of a bonus. Yes.
3. They caused this by their greed. Yes.
Now let's leave the box.
4. The banking system remains bust.
5. Time's up.
6. The banks don't give a monkeys. Once you pay the Danegeld, you never get rid of the Dane. An Independant Commission has been set up? The ultimate in wisdom after the event.
So why stick with them?
The Chancellor's just backed down on the Marr Show, putting agreements in on the future, he's not prepared to make a stand about the past. He clearly still believes the banking system works, and that his arrangements will work. It's six months now since this started, and it's not working. It'll take time, he says. Really? How much time have we got? At least three Eurozone countries are close to bankruptcy, the US can't pay its welfare, we have a matter of days before this implodes. To quote Sir Humphrey Appleby, Knowledge only means complicity in guilt. Ignorance has a certain dignity. On which count:
IS THE UK NOW RUN BY CITIGROUP?
Let's look at his replacement for the double-hatted Sir Philip Hampton for a moment. As you know, it's incompatible that the Chairman of UKFI Ltd should also be one of his chief beneficiaries, at the same time as being responsible for removing all duty of care. Glen Moreno was previously Citigroup's Chief Exec, another of this week's UKFI appointees Michael Kirkwood was Citi's MD Global Banking and former head of Citi UK, as was RBS' non-exec John Mcfarlane. Guy Whittaker, RBS' Finance Director, was formerly Citi's Group Treasurer.
Equally, Moreno's job as CEO of Pearson had him working closely with Baron Stevenson of Coddenham, HBOS' chair until the LBOS takeover, and chairman of the House of Lords Appointments Commission, responsible for the nomination of new members of the Upper Chamber. And that's not mentioning the Times' accusation against him...
And the Chancellor claims ignorance!
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297 JadeWarrior
''..not every bank has called on the tax-payer to bail them out. And some are actually still sound (having their books audited by both the Govenment and the FSA). A little balanced reporting would be nice.''
The thread is about Lloyds and previous one was about RBS.
Nobody, within reason, gives a monkeys what a private bank, ie plc, legally does with its profits. The issue is bonuses being paid by banks rescued by the taxpayer. Banks which would be insolvent bar intervention. Bank workers who would be unemployed bar those retained by the administrator. Bank workers who would be looking for work elsewhere. Unemployed.
Incidentally if you follow the pro agrument about bonuses through to its logical conclusion and say everything should go on as though nothing has happened with the rescued banks, which is the underlying argument, then no staff should be made redundant at these rescued banks. After all they were doing a full time job. But hey why limit to bank staff, why shouldnt households that are customers of these banks and having trouble be topped up, lets keep everything just the same as it was. Thats what El Gordo and Comical Ali really want isnt it. Pump, pump. pump up the volume. Party on dude.
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#308 glenafon
I do it because I'm good at it. It's no coincidence that I've survived 3 recessions, and still have a job.
If you are good at your job, and are paid well, then good luck to you.
Don't deny me a market salary package though, because I work hard for it, and I have earned many millions in profit for shareholders. this has in turn been paid out in dividends to shareholders, and filtered it's way into every pension scheme in the country.
The alternative is that we stop lending. We make no profit, because people are not incentivised, and the country grinds to a halt.
We are a market economy. I'm all for tighter regulation - I have nothing to hide. But if you don't prudently reward the deal makers then no deals will happen, and the economy will grind to a halt.
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I think there should be a national strike if our money is used to pay these guys a bonus. France wouldn't allow it so why should Britain?
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Re: Comment 307.
I've not missed the point at all but purely stating a fact.
Some of the Banking sectors profits can be questionable but the majority of the profits are from core every day banking activities to every day customers like you and I.
Not all Banking institutions are in the same boat, it's like taking a tar brush against the whole sector which isn't fair.
Again when things turn out good again when the current recession / depression ends then all this will be forgotten and all will be happy :-)
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So the Lloyd's board made a decision to acquire HBOS - and share prices have taken an additional hit as a result of this...
So that loss of value is a direct result of their decisions... so surely if it pays off in the long run, they should lose current bonuses as a result. If it works out in the long run, they'll make bonuses back in the future.
The fact that they needed bailing out due to actions the directors got bonuses for in the past shows the degree of mismanagement - indeed some of those previous bonuses would seem to have been paid under false pretences and probably on a moral basis should be repaid.
The government has sufficient shareholdings in many banks to appoint directors or indeed to decline to renew the contracts of current directors (or indeed remove them).
Should directors persist with exploiting their positions after being instrumental in wrecking the economy for others, the government should use those powers.
Hopefully there is a case for some of these directors being disqualified for gross mismanagement.
As to contractual obligations - they could have been nullified had the government forced the banks into closure and acquired the assets / operations for nothing.
The existing / previous bonus schemes encouraged and rewarded behaviour that was harmful to the economy - I see no problem with outlawing such schemes (and thus if done quickly enough and potentially retrospectively, invalidating any contractual obligation).
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Given these bonuses are based on the performance of the bank, the only way to stop them is to withdraw your savings and place them elsewhere. They'll soon get the message.
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?Pay Lloyds bank workers a bonus?
After 3 months of being given incorrect information and lied to by a variety of the staff, I finally managed to move MY MONEY out of Lloyds. It meant a return to the UK to do this over the counter, after being paid some form of compensation following hours of complaining, even then they still send my bank statements to an address 3 years out of date. If they cant cope with a simple change of address then what confidence do I have in them looking after my money, which incidently "disappeared" for 10 days and I was unable to access MY funds, and no-one knew where it was.
Reward them for gross incompetance?
Reward them for lying to the people who pay their wages?
I don't think so.
Award this bonus and my remaining funds are out of there.
I hope that someone from Lloyds reads these comments and actually is concerned about the lack of basic courtesy that they pay to the people who pay their basic wages.
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As an employee of the Lloyds Banking Group - previously employed by HBOS - I am embarassed and ashamed to be associated with all the adverse media coverage of the shambolic performance of the banks. Furthermore, as a taxpayer, I understand the taxpayers hatred towards the banks and it's staff in general - however find myself between a rock and a hard place knowing that bonus payments have now become "expected" across the industry.
I would describe myself as being a "middle-manager" - and at no point over the last few years have I been charged with making decisions that have contributed towards the situation we now find ourselves in.
However, it is people like me, who are now working 18 hours per day (I kid you not!) to try and recover the position. I have been doing this now for nearly 12 months - and so all I would ask is that people still have some degree of understanding for those employees who are doing everything they can to bring the industry off it's knees.
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Great post (317) rahere!
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I have to say I'm a little irritated at the notion that bonuses should somehow get paid to "hard working" people in the banking sector and somehow not to "fat cats". I think we all know this is not going to happen, no matter who gets involved and no matter what type of rhetoric is used.
The banking industry has to do its best to save its skin, that means a lot of hard work all round - the taxpayers have already done their best to make sure the banks continue to exist, that's as much as we can do.
Some banks have clearly failed as businesses and as such should not be pursuing the idea that they can continue to pay their employees as if they are successful - if the business is failing then no one gets a bonus, it's as simple as that. When the Titanic sank the passengers did not continue with their cruise on lifeboats as if nothing had happened. The banks have to get used to the idea that they have been saved from going under - now they have to learn how to be banks again, then once they are paying their own way once more, then they should look at bonuses.
Any other business that got itself into such a mess would have sunk without trace and everyone would be out of work. I don't see why we should be pampering banks, we've done enough for them already.
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I do not understand why failed bankers should get paid out. If the government had not rescued RBS, or HBOS/Lloyds then the staff would be out of work , receiving zero, as happened with Lehmans.
The argument that they must pay in order to retain key staff is daft for two reasons: Firstly, there simply are no jobs to go to. If there were, staff would move - no one wants to work for a bankrupt bank if they could avoid it- they can't !
Secondly, it is healthy to encourage staff to move on and start again. That way we avoid burdensome state banks full of dead wood.
Lastly bonuses are being paid to departments in lloyds and RBS that specialize in tax trades- these are trades that purposely make money out of avoiding the tax that is due. Given that the government has bailed these banks out, of all the departments that should be refused a bonus, this is surely the most obvious?
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319 r0berto
'I do it because I'm good at it.'
: )
To survive 3 soft shoe shuffles is good going. If you dont think you are any good then it is difficult to achieve anything.
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Shares are cheap but may well go up later on, taking shares of equivalent cash bonus value is bankers' cunning way to make more money, albeit slightly delayed, for themselves while trying to deflect public outrage. Bankers are like estate agents, they can't be truested.
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The mere fact that bankers want to carry on as normal says it all - they were and are completely out of touch with reality.
They and most of the so called financial experts are just a load of rubbish, and greedy rubbish at that
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290. At 11:48am on 08 Feb 2009, r0berto wrote
I wholeheartedly agree. The average cashier is on approx £10 -12K. If they hit their targets they may get another £500 in bonus. Personal Bankers (the sales staff) are FORCED and BULLIED to sell recklessly and for some, even criminally. If they don't, they not only lose any chance of a bonus but they also get put on a PIP (Personal Improvement Plan) and finally "managed out". The bonus culture has created a culture that I would only describe as evil but please don't blame the peasants stuck under the table waiting for a few crumbs to drop!
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I can't think of any circumstances in current economic climate where any sort of bonus, however legally binding the underpinning agreement / contract might be, is relevant.
When eventually the markets returns to some sort of sanity, then it may be worth considering some sort of incentive scheme but one in which time and independent scrutiny need to play their part at ensure meaningful rewards for meaningful and lasting contributions.
The answer to anyone citing contractual obligations should be a resort by Governments to a swift piece of primary legislation removing the right to such payments - full stop.
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Re 313 - glanafon
Did you read post 292? - cause there was nothing in that one about employment law etc...
and way
Re 311 - jd6969preseton
"I believe that everyone is entitled to a bonus, if;
1. The company makes a profit
2. You've met your targets for the year"
Maybe my message did get a little mix. Allow me to explain.
The bank I work for is divided into business units.
Each unit has it's own budget and it's own targets.
The network of branches has nothing to do with the capital investment arm.
Therefore it's possible for the branch staff to get a bonus because they can do well in meeting their targets. However if the capital investment arm doesn't do well, the company may not make a profit.
So how is it the fault of the branch staff that bank didn't make a profit? Why should they lose out when they have done everything in their power?
Okay - so the pot of cash used for bonuses may have to be reduced because the company as a whole didn't make any money, and the branch staff get less.
Again, in the bank I work for the money for the end of year bounses is budgeted for at the start of they. IF RBS and Lloyds work the same way, then the losses they publish should include the amount they plan to fork out to staff. They could choose to reduce it, paying money to those sections that have earned it.
Many year ago, I ran a department in a supermarket. At the end of the year the store had achived it's sales target, and was inline for a bonus because of that. Then the powers that be moved the goal posts, by saying that the stock figures of each department would decide if a bonus would be paid to individual departments. I knew my department was okay - but because all the other departments weren't I lost out. The company lost my loyality there and then. I did everything that was asked (I even saved the store from burning to the ground one night) and I got nothing. The leason: bonuses increase staff loyalty. And all companies want to keep good staff.
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just as the bank's bankers have gambled their clients and companies money badly - we have gambled our trust, financial future and life savings (if applicable) with them too even more badly. this is a wake up call.
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Having listened to the BBC news earlier one comment made by the Bankers trying to justify paying their bonuses was that they are required to incentivise their employees. Surely the incentive should be that they have kept their job. I ran a company with a healthy order book employing 36 people. This company was pulled under by the Bank of Scotland but prior to this happening my employees had no wage rises, had lost their overtime and kept working the odd days for nothing as they appreciated the fact that they had jobs and wanted it to stay that way. The government should step in and ban the bonus payments and if the workers are not happy about this then step aside for genuine people who would appreciate earning a good wage for not very hard work....take it from someone who knows. Get a grip and stop these fat cats getting richer whilst the rest of us have to meet our bills on £60.50 per week (having paid into the system for 29years) whilst bailing out the incompetent fools that have put us in this situation in the first place.
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# 332 ShockLeader
"Personal Bankers (the sales staff) are FORCED and BULLIED to sell recklessly and for some, even criminally."
And so what do they do? Leave? Look for another job? Or do the dirty work for an overpaid arrogant bully and then ask for taxpayers' (their abused clients) money, compassion and yes please, a bonus. For what? - a lack of integrity and courage?
"The bonus culture has created a culture that I would only describe as evil but please don't blame the peasants stuck under the table waiting for a few crumbs to drop!"
Why do bank employees think they are entitled to "special victim status"? If ever a case was presented for NOT paying a bonus, you've provided it. Plenty of self-respecting "peasants" in the real world just get up and go.
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Well done Robert you have whipped up the mob and they are now baying for the bankers bonuses and your puppet masters are well pleased with you. I dare say you should get a nice juicy inside story as your reward
Could you possibly now move onto something else.
You will recall that freezing of the inter bank lending was the catalyst for the collapse of NR et al and that the problem was the banks were all suspicious of the counter parties exposure to the so called "toxic debt" ie assets on their balance sheets shown at face value but which were suspected of being of little real value. The Lehman Brothers auctions have shown their market value albeit in a fire sale are worth 10 cents on the dollar.
I have been puzzled by this phenomena as I would have thought that holding such such toxic debt and knowing that its real value was les than shown in the books was material to the companies financial strength and hence share price. I thought I would just check the current officers and Directors liabilities under the law and it would seem that
The Companies Act 2006 and the listing and disclosure rules of the Financial Services Authority (‘FSA’) both reflect the obligations under the European Union’s Transparency Directive which has been in force since January 2007. The directive stipulates that issuers of securities that are traded on a regulated market in the European Economic Area must publish periodic financial reports that, at minimum, review the issuer’s business fairly and that disclose the principal risks and uncertainties that it faces. Further, if the report contains a false or misleading statement or omission of a material fact, and a director or senior executive who is responsible for the report knows the statement to be untrue/misleading or is reckless as to whether it is untrue/misleading or knows the omission to be a dishonest concealment of a material fact, then an investor who suffers loss consequent on the misstatement or omission has a cause of action for compensation.
So it would seem that the directors are liable and therefore the pension funds have a legitimate means of clawing back not only the bonus payments but other assets the officers and Directors of these banks may have. Can we now see you call on the pension funds to pursue these directors on behalf of their investors or do you only play the tune called by #10
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Have A look at the Norwegian Bank package of today. No bonuses or pay increases over 150000. A socialist government with guts.
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# 334 Jade Warrior
So if I've got you right, a company who is asking for credit from your bank (because it's had major losses - let's say due to the recession or bad management) should be given it. Why?
Well there are some in this company who have met objectives and a bonus is in order. These are actually very good workers. The others are also very good workers, and in fact necessary. However the company has had MAJOR losses.
So the boss goes to the bank - but he doesn't get the credit. All of them out of a job. No bonus. No salary.
Now just change bank to taxpayer and company to bank. This is the reality. Bank employees have their salaries and taxpayers are saying you're lucky to get that. Bonus NO.
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I am reminded that some 15/ 20 years ago, when RBS set sail on its 'Project Columbus' the 'ideal' was to provide Banking 'a la McDonalds' - same sales, same service, same experience...
Seems like The McKinsey Dream came true...
No bonuses at McDonalds either...
Perhaps the Management should have their 'Star' status removed as well!
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#332
The culture you suggest should not be occurring and I for one suggest you escalate any instances of this you are aware of by way of your dedicated escalation route. All reports are taken very seriously and investigated to ensure any encouragement of such practices are removed and the issues remediated. This is a serious allegation and will be taken seriously by your employer who does not condone such practices in any way. Please ensure you play your part by reporting it. I guarantee your identity can remain anonymous.
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Customers with savings, or non "in-debt' bank account should vote with their feet and close their account straight away and move to a bank who is not paying their directors a bonus. What would happen to the bank then? No doubt the government would tide them over until the customers came back...
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It is difficult to have much confidence in an review panel whose members presumably come from the "great and the good". They are too close. Perhaps if the bankers had to make their case to a committee that contained a few teachers, nurses, plumbers and the self employed they might have a more difficult job convincing us that the system was not simply self-serving.
Also if the prime minister had announced that all bonus payments would be frozen until both committees had reported and their reports had been debated it would be more possible to believe in them.
No bonus payments might hurt bankers but not as much as the absurdly low interest rates have hurt small savers.
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334 JadeWarrior
Re 313 - glanafon
'Did you read post 292? - cause there was nothing in that one about employment law etc...'
errata, your post 294 rather than your post 292, comment applies. I did notice after posting but thought you could put it together because both posts were yours.
You are misguided in your idea that the law protects you. Try going to the high court. Ever prepared a case? The further you are away the more certain your legal advisor is, the near you get the more uncertain they become and the higher the cost climbs. This is even when it is obvious what the situation is. 160 an hour for a solicitor, 5k for a basic barristers opinion, up to 30k if extended opinion needed, plus 30k solicitors prep for the barrister so 60K costs if you lose, 120k if the other side appeal and win, 200k if you end up at the house of lords and lose. 2/3rd out of court settlement to avoid years of aggro when you have a clear cut case. The only protection is wealth which is why people seek it.
Further to your comment about bank bonuses. The issue is one of boundary. You have presented the case that a bank division has performed. That another division of the same bank has not. You have elected to draw the boundary around a prefered division. The boundary can be draw around anybody or any department or the entire business, all divisions. The concept presented at the start of the thread is that all will recieve bonuses in the taxpayer rescued banks. If that is the case then I am sorry but I oppose that. If your prefered division recieves a bonus but the other division does not then there will be somebody in the underperforming division that will say they have done well it is somebodyelses fault. It is never ending. If the bank as a group has shares then it is an entity, it does not trade as divisions therefore the profit or loss is shared. The boundary is around the whole. If you have loyalty issues with your employer because you may or may not get a bonus that is nothing to do with the taxpayer. The taxpayer, who include workers on the minimum wage, could be paying for this mess for the next 20 years. So stop trying to play the morality card. Anyway it would appear Comical Ali is not up to stopping a payout.
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332. ShockLeader
''Personal Bankers (the sales staff) are FORCED and BULLIED to sell recklessly and for some, even criminally. If they don't, they not only lose any chance of a bonus but they also get put on a PIP (Personal Improvement Plan) and finally "managed out".''
What ever happened to personal ethics. Please do not say people have to behave like this. They do not. They can leave. The justification for bank workers behaviour just becomes more and more bizarre. Obviously if you comply with unethical requests you put your price at 500 quid, the bonus figure you quote. Nuff said. If ever there was an argument for not paying bonuses you have put it.
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336. Angryjane
I agree. You have a right to be angry.
Nick
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?
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These people have done an excellent job and deserve huge bonuses. What a credit to the nation and the world. I am overjoyed at the prospect of all my hard earned taxes going to pay these sterling workers bonuses. I will remember them with fondness as I sign on the dole or learn of another closure in our high street or another factory lay-off and think if only I could be like them, then I too would have nothing to worry about, except my big fat bonus. Good luck British bankers keep up the good work.
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Reading many of these posts is like watching a baying pack of hounds screaming for blood yet not really knowing why they are doing it, other than it is a populus view to decry all things banking.
Many even say Lloydstsb have been loss making - well how do they know that ?, the results are not out until later this month and until that point is reached no-one knows what their true performance is for 2008.
Gordon Brown says Lloydstsb saved HBOS from exctinction
Robert says
But Lloyds didn't buy HBOS as an act of charity, even though it was encouraged to do so by the prime minister and the Treasury. Eric Daniels expects to make good profits out of HBOS in years to come.
Copyright © 2008 Fool.co.uk - Your Money Team. rate Lloyds TSB/ C & G as one of the safest banks based on their calculations
No all this rhetoric about bonuses is a nonsense based on sentiment rather than fact.
It is unfortunate that all commentators prefer to lump all Banks together to grab a headline rather than have the skill or ability to do proper investigations of the individual positions of each one before casting stones in particular directions in the search for sensationalistic headlines.
Yes the new Lloyds banking group is now 43% owned by the tax payer, but that is mainly due to the horrendous situation at HBOS and the additional funding they needed - not the previous performance of Lloyds tsb, which as I have said earlier, no one yet knows the true position.
Don't forget the bonuses are paid on the previous years trading results - these may be good, they may not, but I for one will not judge Lloyds tsb until that position is released just because a few other banks got themselves into a terible position during that year.
If they never reached their objectives - they don't deserve bonuses - if they did then it is churlish to say they don't get them just because others have failed - don't forget the government never took their stake until 2009 - that is not reflected in the 2008 results.
I'm more concerned about the way local authority council tax is being front loaded to cover the guaranteed pensions of their employees whilst the government has stolen value from those in the private employee. That is a hidden steal. Write to your local authority and ask them how much they have put in to their pension schemes over the last 10 years - you might begin to understand why your annual cost has doubled.
Bankers it seems aren't the only ones who are on the take. How many employees of the BBC even take a salary many of us never have an opportunity of dreaming of...and who are paying those .... we are !!
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Sorry. I don't see what is wrong for Lloyds executives being paid a bonus. Before buying HBOS the CEO was becoming recognised as more astute than had previously been thought. The Government and the press siad that without lloyds coming to the rescue the outlook for HBOS was dire. As for the falling share price I would suggest that you, Robert, as well as other press comments have not exactly helped the situation and this opinion is becoming mentioned by people far better informed than me. (one has to wonder whether you are being used by Government to cloud the issues).
Indeed one must question whether this constant bleating by the press and politicians about the Banks is not part of a cover up to hide the Governments own incompetence in dealing with the situation.
Well informed voices both inside and outside of the UK are becoming increasingly vocal regarding the Governments performance and surely Gordon Brown should realise that only bad managers constantly criticise in public.
He would have more credence if he displayed a bit of humility rather than claiming to have saved the world which has only served to make him, and us, a laughing stock in other countries!.
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This comment was removed because the moderators found it broke the House Rules.
All this talk of Bank bonus payments is becomind far to strident. The argument is that the salary is enough for a member of staff to dothere job correctly.
However change the name to commission, or even a tip, both received in excess of wages. are we suggesting that car salesmen should not get commission or the waiter no tip. Bonuses have a place in the workplace, the basis of them is what needs to be discussed
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BONUSES FOR BANKERS
There is a catch for them - but I think we should pay the bankers their bonuses. Just not yet.
We should suspend the payment until by their own efforts our present State banker employees are free and clear of State control - and we should give them five years to do it.
What greater incentive do they need to achieve high performance - in all our interests, including theirs - than the carrot of the payment of their bonuses, once they have worked their way out of their self-created mess and paid off the taxpayer ?
Far better than any stick …
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I have no problem with your moderation system.
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No one in the media seems to be clarifying responsibility for all this mess. If you ask Gordon Brown, Alastair Darling and now John Prescott or probably any crony thereof the answeris "it is a global crises" not our own doing alone.
Why do you not calculate what the situation would be had the babks been rgulated as we would have expected any government to do and compare the outcomes?
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I wonder how many people actually know what bonus the branch staff at ltsb will receive and in what form it will come.The sum involved at most will be 4%of their salary most of them earn between 12 and 20 k.this bonus will also be paid in shares not cash and if as we are being threatened on an hourly basis the bank is nationilised these shares will be worth nothing anyway.Another point is that we cannot touch these shares for 5 years so when we do get our hands on them inflation will have made them almost worthless so please consider this when the likes of robert peston the BBC news and our corrupt goverment are using this item to create a spokescreen to cover up the real problem which is government which has given up and is waiting to handover a broken country to the unfortunate party who wins the next election. As a ltsb member of staff on principal i feel that as part of a company who made a profit for 2008 thereis no reason why i should not have this 'AMAZING' bonus but i would gladly along i am sure with most of my colleagues and fellow shareholders give it up to ensure that the company never gets into the hands of the goverment.
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As a staff member as part of the lloyds group I see both sides no the executives should not be paid their big fat cat bonuses due to sitting on their backsides earning their hundreds of thousands of pounds a year however as it's the general branch workers that are working their socks off to keep the business afloat and taking all the customers flack about the bad rates (not that the branch staff have any say in what rates are going to be though most customers seem to think we do) they should be paid the bonus if they have met their targets as most are barely earning £20k a year and knowing that they have reached target and will get a little recognition for their hard work makes up for all the ear pie we have to get from some of our customers and dont forget everyone talks about the tax payers owning most of lloyds but the last time I checked my payslip said I pay tax! so when you all rant about ALL staff should not get their bonuses please spare a thought for the lowlife branch staff who do their jobs and deserve their bonus (dont get me wrong not everyone gets a bonus as they dont meet targets I am included in this section of staff)
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for all the people saying if you dont like not getting your bonus then leave and find a new job trust me we would but if you haven't only read about the mess lloyds are in you will also know that we have the highest unemployment rate in record so there are less jobs around for us to apply for so when we have mortgages or rent to pay families to provide for the easiest thing for us to do is to stay in our jobs work hard and reach our targets and look forward to the extra cash that we recieve (and pay tax on) every quarter with our monthly pay.
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Having run my own manufacturing business for over 30 years and survived at least three recessions, I have seen most things! In every case the banks were true "fair weather friends". However, at least they were honest, if not lacking vison and much business sense.
This has now changed. When I think back to the days when bank mangers has power and were trusted members of society, I could weep! The beginning of the end were the "Business Centers". These were set up to remove responsibilty from the wise old managers, and a computer would assess risk. This meant the bank lent money to people it had never met. And we are where we are now.......
In my business, we also had a bonus, but if the company had no cash, there was no bonus. These banks today should consider where they would be without the bail outs. If they had been a normal business, they would have gone bust, and EVERYONE would have lost their jobs (and bonus!) However, it seems that these banks are in some way "special".....they are just a business like any other business. In 1994 when we had lost half our customers, I had to find a way through it, it would have been very nice if the Government had stepped in to bail me out!
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Have you asked what bonuses civil servants get, or any non financial companies, or NHS Execs? Come on Robert, let's look at things in the round. If you want banks to stop paying bonuses because they are state owned, then you'd do better to argue that no one in the state sector should get them.
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For anyone considering paying 'bonus' to the Executives or any senior Management of the Bank, especially those mysterious representatives of the UK Tax-payers whose 43% ownership of Lloyds does give them some input, here is a small little Fiscal sum to help in their deliberations:
Annual Income: 1.00s.00d
Annual Expenditure: 0.19s.06d
Result: 0.00s.06d PROFIT
Annual Income: 0.19s.06d
Annual Outgoing: 1.00s.00d
Result: 0.00s.06d = PENURY
Now, for the slow, confused but so sophisticated Banking fraternity, just extrapolate those figures several billion times: Even they should get a clear picture of how the facts relate to their deserving of a Bonus!
It is really unfortunate that in this modern age of 'understanding' it is not as Mr Micawber lamented, "...a Debtors cell awaits.." the impecunious experts of the UK Banking system.
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Everyone is going on about banks making profit from paying low interest on peoples savings. the low interest is nothing to do with banks and to do with the government lowering the base rate to encourage us all to spend more and boost the economy.
I dont think its fair to take away bonuses from people who have worked hard all year and met their targets to achieve their bonus. many bank workers are relying on their bonus to make ends meet and are feeling the financial pressures just like everyone else. not all bankers are fat cats sitting in million pound mansions most are real people making a minimal salary like any other office worker or shop worker.
People think its ridiculous for bankers to be recieving bonuses but most people are commenting on something they know very little about. if it were to be publicised how little the staff at the bottom actually earn, the staff who face the public and take the brunt of the negative media attention, most people would think that was ridiculous.
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realist333 and Comment365 "..fairness.."
So far as I can detect no one is suggesting Bank Branch employees of any description should be denied whatever remuneration they are legally entitled to receive. Those people are surely as you say, "..feeling the financial pressures.." with their homes, family etc. being affected like every other ordinary UK citizen by the negligent greed and managerial ineptitude of their Senior Executive bosses at Bank's HQ!
Some MPs and many people like myself are suggesting all high-profile top Executives' bonus should be halted at once.
Personally, I would also like to see those 'masters of the universe' arrested and charged with negligent defrauding of Company assets.
PM Brown and Chancellor Darling seem reluctant to either stop paying Bonus or detaining any of these 'fat-cat' thieves despite it being UK Tax-Payersmoney that is being used to maintain these crooks lavish rewards and lifestyles!
That is "unfair" and certainly "most people think that is ridiculous"!
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I have worked for HBOS for over 30 yrs and now work for the LLoyds banking group. I was 'encouraged' to share kick my bonuses over the last few years and was actively encouraged to tell staff what a brilliant scheme it was. I was also encouraged to save in the staff share save schemes and as a result of doing these two things I have now lost over £21,000. This is currently only a paper loss you may say but as LLoyds share price would need to increase to at least £11 per share for me to break even it is unlikely that I will see this in my lifetime. I was a loyal and committed member of HBOS and I feel totally betrayed by both the Executive and top Management of the company. To then not receive a Bonus when our branch exceeded our targets last year (The Retail section actually made a profit) would add even more insult to injury. Leave the front line staff alone we have more to feel aggrieved about than most of our customers as as well as huge personal money losses we have also taken the brunt of the verbal assaults from customers which are currently increasing as more & more people jump on the 'lets slag off the Bankers bandwagon'. Just for the record I have paid my taxes for over 30 years and most of the people who are unintelligent enough to blame the staff on the front line have not!
PS A customer came in today and complained that we should not have the heating on so high because it cost too much - oh how we love as a nation to kick people when they are down!
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There should be no bonuses in either RBS or Lloyds. Without tax payers considerble support these institutions are effectively bankrupt.
It is unfortunate that some are more deserving of their bonus than others, but in any other business in a similar position, most, if not all, would not even have a salary to take home, never mind a bonus.
As for the senior management, there are many lesser criminals that have spent years at Her Majesty's pleasure. Why should they be treated differently?
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Robert Preston:
I think that Lloyds pay a bonus...NO!!!
~Dennis Junior~
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Someone asked about tax loopholes for bonuses - sorry I lost interest a bit when it became clear that banks were intent on doing what they wanted despite better advice and public sentiment. I think we all accepted the two fingers with traditional British attitude of oh well nothing we can do might as well accept it.
Anyway back to the tax issue. One way that the liability can be deferred or mitigated is by giving the bonus as an interest free loan to be repaid by future bonuses which could be tranferred to an offshore trust. Hope that helps.
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Not only would it be grossly unfair to stop all bonuses it would not be in the interest of tax payers.
I work for the Lloyds Banking group, in a profitable sector of the organisation, I get paid bonuses ONLY if I achieve sales targets. I generate approximately 4 - 5 times my annual salary in profit for the bank. Bonuses are an essential part of many of the banks front line staff.
If employees do not receive bonuses for achieving sales targets they will either have no incentive to meet targets or simply move to another organisation who will pay bonuses. Either way this will reduce value to the tax payer even further.
To illustrate this point, if a car manufacturer were nationalised, how long would the company last if all bonuses were stopped to the salespeople for each car sold!?
Whether or not people agree with the payment of bonuses, they are essential if the banks are to return to profitability.
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I work for the now Lloyds Banking group! On the front line in a branch. And no I won't leave because I'm not going to get my bonus that I have worked very hard for over the last year, because at my age I'm not likely to get another job...
Everyone is up in arms over the V LARGE EXECUTUVE bonuses, and severncance payments, I'm agree with that... but the cashiers and front line staff in branches who strive everyday under pressure from management and executives to perform in these very difficult times, shouldn't be penalised for their mistakes..
I agree that without incentives it would be very difficult to get people to SELL, as this is what we do, no longer a profession, we're a retail outlet!! The only other incentive we get is do the job or eventaully your out the door through a performance issue...
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Bonuses and pensions for all the banks' top execs should should be paid out of a special account. That account being the one holding all their toxic debts - live by the sword, die by the sword.
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I'm an employee of one of the two banks concerned here, and a shareholder in both, and a taxpayer - lucky me.
So having seen my retirement nest-egg shrink to oblivion (having invested my so-called bonus back into the company) I am extremely happy - not.
An explanation of 'bonus' - part, if not all, of my 'bonus' is not bonus at all - it is withheld pay. Those of you familiar with the "golden handcuffs" method of staff retention will know what I mean.
So if my "bonus" gets cancelled, it will be another cherry on the top of the job security (not), pension security (who knows), and all the rest - just in case you thought bank employees were immune to the general malaise.
So a little less vitriol, and a little more understanding, might, just might, keep me sane.
Thank you
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Post 370, mattjudoboy. Thank you for your revealing analysis. This point about taxes is indeed relevant, since it the whole conspiracy is connected with us evil bankers and our undeserved bonuses.
I am however disappointed that your advice does not help me avoid my taxes. I've been working in this industry for a decade and the bonus payment form you described is pure piffle and simply doesn't exist. But your post is highly instructive: it is indicative of the quality of opinions surfacing on these blogs and in the press that appear to be held with the utmost certainty
Back in your box? Good...
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as a share holder the shoul not get full pay out but the lowest 1 % pay out as we have suffered this last year and they want us to pay more ,noshould come out of there end of year pay out not the shareholders
thanks bill.
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