BBC BLOGS - Peston's Picks
« Previous | Main | Next »

Should bank chairmen kill bonuses?

Robert Peston | 11:16 UK time, Tuesday, 21 September 2010

At what monetary threshold does a bonus become "a ludicrous sky-high" bonus?

Nick Clegg


The banks would quite like to know, because the deputy prime minister this morning told the Today programme that the coalition might well impose an additional punitive tax on them if they remunerate their superstars in that kind of "offensive" (Nick Clegg's words) way.

Well "sky high" - in the matter of pay - is a relative term. For most people, a bonus of £10,000 is a fortune. But we can be pretty sure Nick Clegg is not taking a pop at payments of that magnitude.

What about £100,000? Is that acceptable to him? Probably.

Or £500,000? That may be bordering on the "offensive" to the Lib Dem leader.

And is it £1m or £5m that's definitively intolerable?

This national obsession with bankers' pay - as evidenced by the bonus-bashing at the Lib Dem conference - may be fully justified.

After all, it seems odd and even obscene to many that institutions so recently rescued by taxpayers - and still explicitly or implicitly underwritten by taxpayers - should pay so lavishly.

But this fixation with the heft of the banks' wedge may not be healthy for the banks or for the economy.

Bank bosses have told me they are devoting an inordinate amount of time to thinking about how to pay their people what's necessary to honour their contracts and retain their services, while not paying so much that alienated politicians, media and populace become determined to pull their houses down.

Right now, what laughingly passes for a strategy to deal with this is a hope that the recent worsening in investment banks' performance continues for another couple of months, so that market forces force the banks to pay their people less than last year.

Even if their perverse wish for the froth to be wiped off their revenues is granted, seven-figure comp will still be what Santa brings to thousands of bankers - while hundreds of thousands of non-bankers fear for the security of their jobs.

So bank chairman and chief execs may have no alternative but to revive their collusive habits, and agree some kind of bonus moratorium among themselves.

How likely is it that they can agree a voluntary pay policy among themselves? Well, they made a half-hearted attempt last year and conspicuously failed.

But if they do little to collectively address public concerns about bankers' rewards, they are taking a not-very calculated risk that the furore will blow over.

The last time they took such a risk - namely when they thought the boom times in markets would never finish - it didn't end well.

Update 1210: A voluntary moratorium on bonuses won't happen, a senior banker tells me, because it would be illegal.

Here are his fascinating remarks:

"If a chairman decided to unilaterally disarm (ie slash bonuses) they would commit commercial harm and fail in their duties.

"If the market is producing an outcome that is unacceptable then regulators must regulate. Why has the Government not set up an independent pay commission or better still asked Vickers (the Treasury's bankig commission) to examine this issue alongside everything else?

"There is no realistic industry solution consistent with market rules and the legal responsibilities of directors."

So there you have it. If the government wants the banks to show bonus restraint, it may have to impose a pay policy on them.



Page 1 of 2

  • Comment number 1.

    The only limiting factor to the amount that bankers can pay themsleves is:

    What can we get away with without getting lynched?

    It's not the fact that they do reward themselves so much that we should be surprised at. It is the fact they are able to do so out of profits in the biggest depression since the big one.

    I personally prefer it when they get more greedy as it brings them closer to Judgement day.

  • Comment number 2.

    We should put in place the laws needed to enable us to tax bonuses if the banks fail to put an equivalent amount into a venture fund for start-ups, spin-outs and other early stage companies.

  • Comment number 3.

    The problem with any discussion on bonuses is that it is almost impossible to have a rational debate without emotions (anger, jealousy) clouding things.

    To me there is no real difference to being overpaid in 12 monthly installments, or being overpaid only @ year end. (I wish I was either of these things). They key word is of course overpaid.

    So the problem then becomes how does one define "overpaid". This is intractable. Some people may claim to have an answer, but there will never be a consensus, so in the mean time things will just continue.

  • Comment number 4.

    At what monetary threshold does a bonus become "a ludicrous sky-high" bonus?
    Simple - it depends who you ask

  • Comment number 5.

    As banks and are highly protected monopoly they can effectively pay themselves an infinite salary. It is the protected regulatory monopoly that causes the bonus problems as they are in no way influenced by the market as there is no effective market.

    Banks should be subjected to a maximum remuneration policy enforced through the tax system which takes into account all present and future earnings and asset transfers in the UK and worldwide for a post/year/lifetime. If employees don't like this then they can leave. The same holds true for their bosses. In the present times we need a total cap at the Prime Minister's salary for everyone in the UK. (see my post of yesterday #76)

    Bonuses are totally irrelevant - what is important is a total remuneration package and that is what must be capped. The banks have been very successful in transferring attention to the bonus part as this allows them to carry on just as before. They wrecked the country once and they must not be allowed to do it again!!!!

  • Comment number 6.

    The question is how are the banks able to pay such enormous bonuses which exceed by far any other bonus paying organisations? It is because the margins are massive for what the banks do and what they pay their shareholders. It reflects a virtually non existing competitive market and a self perpetuating oligarchy of enlightened self interests and a confidence that the state will see them all right if they get it wrong. Bonuses reflect the corrupt and neo-criminal nature of the industry and it is the market/competitive/structural issues that need to be addressed. I dont think Mr Clegg will be calling the shots.

  • Comment number 7.

    This shows how naive Clegg is. Since 1979 successive governments have been encouraging the Banks to operate from the UK with the promise of "light regulation", and a favorable taxation regime.Now with so much of our economy dependent on the Financial Services sector, and so little on "added value" manufacturing, Clegg will have his bluff called,and his masters in the Tory party will continue to allow "obscene Bankers bonuses"-after all you cannot buck the market!

  • Comment number 8.

    Investment banks over pay their staff beacuse they over charge their customers, who for some reason, keep paying.

    That's the real reason

  • Comment number 9.

    > So bank chairman and chief execs may have no alternative but to
    > revive their collusive habits, and agree some kind of bonus moratorium

    A "moratorium" doesn't cut it. Wholesale culture change is in the offing. The money must be put back into the hands of its rightful owners - the citizens of Great Britain.

  • Comment number 10.

    The biggest issue apart from the fact certain banks (not all) were bailed out by the tax payer is the wider question of why bankers are singled out as being able to earn such huge bonus payments yet other professions are not and in this case Im not talking about the board of directors but the traders, analysts etc. If a surgeon performs above average number of successful operations he doesnt get a massive performance bonus, a detective solving above average crimes sucessfully prosecuited doesnt get a performance bonus but both are highly valueable to society. Sorry but the whole system globally needs radical review and stringent laws to bring these people into line with other professions the city greed & gravy train needs to be shunted into the sidings after all at one point a UK member of Goldman Sachs got close to £ 20M in a bonus no one on the planet should get that other far less well off have to pay for it often in their jobs after a take-over.

  • Comment number 11.

    To turn a well known phrase on its head.

    If you've got monkeys, pay peanuts.

  • Comment number 12.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 13.

    High bonuses mean a healthy tax take. 50% of these go to HMRC? Is that not enough?

  • Comment number 14.

    #6 watriler wrote
    The question is how are the banks able to pay such enormous bonuses which exceed by far any other bonus paying organisations?
    thebanks pay out

  • Comment number 15.

    @ 11. At 12:24pm on 21 Sep 2010, szjon wrote:

    > If you've got monkeys, pay peanuts.

    Don't denigrate monkeys. Monkeys maintain emotional ties to their troop. Sociopathic bankers just try to impoverish their fellow humans, by hogging all the money that passes through their hands.

  • Comment number 16.

    The bankers have devastated our economy. The taxpayer has had to bail them out big time. As a consequence our economy has been "blown away" and we (taxpayers) will be spending many years paying off the failures of the bankers (dismantling of the welfare system, health cuts, pension cuts, armed forces cuts, people losing/without jobs, etc., etc.). Had the bankers behaved in a responsible manner this would not have happened.

    So we are suffering the pain caused by the bankers and will be for many years to come - yet for them they are back to their same faulty system of operating and are awarding themselves massive bonuses whilst we suffer for their recent failures. Whilst we are in such a period of austerity any bonus is to big a bonus.

    People are paid to do their job. they should not require additional bribes to do a "good job" (and for the bankers is seems a "good job" is one that ultimately results in devastated economies).

  • Comment number 17.

    There is a simple way for the government to deal with this issue - just bring in a new tax rate of 110% for bonuses above £100k with no means of tax relief acceptable other than the individual waiving their right to receive the bonus. This would make sure that anyone entitled to such a bonus would definitely waive the bonus. It's what Ken Livingstone used to call a "greedy b*stard" tax when he was referring to Cedric Brown late of British Gas.
    I'm all in favour of rewarding good performance but these people go way beyond the mark - and before you say they will all leave the country - so what - no-one other than their mothers would miss them!

  • Comment number 18.

    #6 watriler wroteThe question is how are the banks able to pay such enormous bonuses which exceed by far any other bonus paying organisations?
    The banks pay a very high proportion of gross profits - up to 505 to their most successful employees. This may date from when investment banks were private companies not too long ago; Goldman Sachs was a partnership. It will be difficult to be the first to stop; all the talent will walk out of the door. Oh, I forgot - they pay all this money to stupid people!

  • Comment number 19.

    12 szjon - it's packaging up pricely that sort of product and, with the compliance of their pals in the rating agencies, selling it on to each other as nuggets of potential future profit that in part contributed to this mess.
    In banking you can, if you pardon the term, polish a t**d

  • Comment number 20.

    The bonus pool/profits can be adjusted for:
    1. The implicit and explicit taxpayer support which keeps banks borrowing costs lower than for any other business (worth a few billion a year for each bank)
    2. Borrowing short term from government (approx 0.5%) and lending back to them long (approx 3%)
    3. Any 'aggressive' accounting i.e. deciding your bad debts aren't as bad as you thought and booking this all as profit.
    4. Recognising profits well before they have materialised in real cash.

    Once these adjustments have gone through I don't think they'll be much left!

    When all banks made massive losses in 2008 why wasn't there a whip round such that 25% of the losses were borne by the employees? If employees aren't willing to stomach the losses in this way they should not be able to pocket the fictional profits.

    The problem is that being banks they have all the cash - so can pay themselves want they want until the ponzi scheme comes crashing down every few years and then we all as taxpayers come in and clean up the mess.

  • Comment number 21.


    You raise a good question re why bankers are able to receive large payments. I think the answer to your question comes down to the business. Even the best surgeon has a small number of 'customers'. Compare that to (say) a premiership footballer, who is effectively paid by hundreds of thousands (millions even) of people (indirectly). Or a successful musician where one lot of effort (producing the song) gives the ability to sell to millions of people. These people are able to leverage their effort. Their effort/work affects lots of people, so their wages tend to go a bit bonkers. Banking has some similarties I think. Indirectly we are all customers. Not just directly - for example if I hold any insurance contract, the insurer will be investing those premiums and trying to get a return. Which means they need banks.

    Also, it is an information business. Which means banks have fewer physical restrains to volumes than other industries that affect so many people (eg power).

    But in theory, making lots of money should attract more competition, and drive prices/salaries down. Obviously this hasn't happened in banking any more than it has in football. I guess setting up an investment bank must actually be quite tough, otherwise everyone on this blog would be doing that and retiring at 35...

  • Comment number 22.

    I Just heard the Cleggy interview on Radio 4. Marvellous stuff.

    Fear not people. Nick says that:

    'if the bankers refuse to recognise taxpayers generosity when deciding on the levels of their bonuses then the Govt will not stand idley by'

    Everything is going to be OK

  • Comment number 23.


    You shouldn't be at home at 10am. You should be at work, so you can pay your taxes, so they can be used to save more banks!

  • Comment number 24.

    Rather than forcing banks to pay less the government should use the tax system.

    For example all employees working in utility like companies - ie ones we can't do without Banks, Water, Electric, Transport, Healthcare etc should have to pay a much higher level of employees national insurance for all pay say above £75k? (3 times median wage of UK)

    This would not harm entrepreneurs who set up their own businesses but would mean taxing those employees who are using services and companies that all of us have no choice about using to enrich themselves at the expense of the rest of us.

  • Comment number 25.

    normally competition means that costs/prices, in general, decrease and meet a market level. For some reason bank bonus seem to defy this.Is Supply of good bankers that depleted? I guess when we say goo, then that would be so. If we say shysters, then obviously not. In most private industry and empoyee getting a 10% bonus would be seen as a triumph. So lets benchmark bank bonus's to the average bonus within the private sector - if they don't like it they can resign and move to one of these jobs elsewhere that appear to be 10 a penny - as we hear that if they not paid these vast sums they will go abroad - I am sure there are many competent individuals who could do the job. and even some lesser individuals, at a level 10% below what they do for 50% of the cost.

  • Comment number 26.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 27.

    Pick a figure at which 'obscene' kicks in. Above that tax @100%. Job done.

    Of course many companies would leave UK for less taxing shores, and some would say good riddance - but I keep hearing 'baby, bathwater' and 'nose, face, spite' buzzing around my head.

    Are the bonuses a real problem? What are their true economic impacts? Or is this just a very understandable case of sour grapes?

  • Comment number 28.

    "People are paid to do their job. they should not require additional bribes to do a "good job" (and for the bankers is seems a "good job" is one that ultimately results in devastated economies)."
    Couldn't agree more.

  • Comment number 29.

    For me the issue is quite simple. Bonuses ought not to be paid at all - to anybody, not just in banking.

    There is no such thing as a bonus scheme which cannot, and does not, become corrupted. Whatever measures of performance are chosen, if they do actually have an effect on behaviour there can be no guarantee it will be the one(s) intended. Very often they have no measurable effect on behaviour at all, but without running a controlled experiment under strictly-controlled "laboratory" conditions (which is impossible) how can anyone know?

    Instead, blind faith is invested in the assumed efficacy of this form of motivation usually to the almost total exclusion of any other forms - such as good-quality leadership.

    Secondly. since the standard of living which total earnings (including bonus, once paid) supports becomes the "normal" one for every recipient, managements always resort to fudging their own performance criteria in order that so-called "key" employees shall not become discontented and/or leave.

    I stress:- this ALWAYS happens sooner or later, with every bonus scheme. It's just human nature.

    Of course, even if this is accepted, getting from the crazy position we are now in (especially in the financial sector) to anything more rational is going to be extraordinarily difficult.

    I just think that if people refused to accept unquestioningly all the rubbish that is fed to them about the "need" for bonus schemes, that might be a good basis on which to start having a useful discussion about what to do about them.

  • Comment number 30.

    Isn't it about time that the whole banking system was reformed - please view this website that I came across recently - - it proposes a new banking act that would mean we would never have to have the conversations / discussions that we are currently having about bankers as they would no longer be able to magic money out of thin air creating debt that is now over 97% of all money in ciculation and on which we all pay interest on !!!!

    Read the new bill and give it your support - ask what politicians are doing about it / what the media are doing about (Robert you should read the proposed act and discuss / publicise further) / what does the BofE and Treasury think about it, the PM and Deputy and Vince Cable ????

  • Comment number 31.

    National interests should form a significant part of bonus calculations for everyone, not only in banking. These should include GDP changes, national debt level, inflation, crime rate, unemployment level, life extectancy etc. At good times, several times multiple of annual salary would not be unreasonable (eg. +10%GDP, £tn surplus and no debt, 0.1% inflation, virtually no crime and 0.1% unemployment). At bad times, zero bonus or even bonus claw-backs from past ten years should be considered.

  • Comment number 32.

    #5 John_from_Hendon
    I am complete agreement with you. I believe that the point has now been reached at which we need an enforceable maximum wage. The abuse of market monopoly and state support is now an acute embarrassment to the majority of us that do support and believe in private enterprise.
    Paul Berry

  • Comment number 33.

    > People are paid to do their job. they should not require additional
    > bribes to do a "good job" (and for the bankers is seems a "good job"
    > is one that ultimately results in devastated economies).

    I used to house-share with someone who was in the 'back office' in a bank. He regularly got back from work around 10pm. His job was technically 9-5. But if stuff needed done, he'd get it done. I reckon that deserves either overtime, or a discretionary bonus. (With the caveat that no bonuses should be paid to people who would be unemployed if it weren't for the government stepping in with oodles of dough.)

  • Comment number 34.

    I think David Cameron kicked off a worthwhile "debate" on the wider issues of this, by suggesting people at the top of an organisation should not pay themselves more than 20 times that of someone at the bottom.

    It's typical of people at the top to hog the lot and not share it down below. (i.e just plain greed.) It's the breathtaking arrogance of their justifications that are even worse. Since the principles they use somehow become no longer valid when somebody "lower down the food chain" is able to apply precisely the same principles to justify their own increase, but find it is not given and actually just dismissed out of hand. Usually with a, "if you don't like it go work somewhere else," because they haven't got a Board of chums backing them up.

    Yes it is scandalous and our politicians should make it easier to stop this and for people to change jobs. For example by preventing employers using egregious terms and conditions in employment contracts. (e.g you cannot setup a similar business within 5 miles of your former place of work, within 1 year of leaving.)

    It would therefore be a good idea to vote for people to represent you, rather than manage you!

  • Comment number 35.

    I don't really care how much the bankers pay themselves in bonuses. What I do care about is the fact that they are making so much profit that they can afford to do it.

    That means that they are charging way to much for their services. Obviously they feel justified in charging these rates because people / businesses are able to pay; however, maybe if the banks are paid less in charges people could afford to pay more for goods manufactured in the UK (instead of China), which may reduce the unemployed, which in turn may reduce benefits and increase tax contributions, which may in turn improve inner city life, schooling, local council revenues ....da da da da da da...


  • Comment number 36.

    As others have commented, it's total reward that's at issue (which bonuses, however, in the financial sector greatly magnify). And total reward - at the top at least - is as disproportionately high in the financial sector as it is because profits are.

    And why are they? Principally, I suggest, because retail banks have been given by our governments (of all political persuasions) the privilege of creating (now) 97% of our money in the form of interest-bearing debt, leaving the government to issue in the form of interest-free notes and coins only the remaining 3%.

    This is, in every sense of the words, a license to print money.

    This is at the root of this and all of the rest of our current financial problems. The system is wholly dysfunctional. Until it is reformed it's futile to emote about bankers' bonuses.

    If, after we have forced banking to become honest and have withdrawn privately-owned banks' completely unjustifiable subsidy (receiving interest on 97% of the nation's money) they succeed in making handsome profits, then good luck to them say I. They will then have earned it.

  • Comment number 37.

    It won't happen! It is just words to use at a conference. Our leaders are all rich men who don't want to upset their city friends. They don't begin to understand what it is to have limited income. Do they really care about those who are disadvantaged? - that is the test of a real human being.

  • Comment number 38.

    Vince Cable on BBC R4 indicated that he would tax the banks to prevent them paying ludicrous bonuses. Coupled with Danny Alexander's promise to attack tax evaders - and the already announced intention to limit pension pots and contributions, gives us the final answer to Robert's prior thread on retirement of the supremos of Lloyds, Barclays and HSBS.

    Banker-boys - the game's up! Take what you've got and run. You'll not be creaming us for much longer.

    Time for real industries to come to the fore.

  • Comment number 39.

    The banks have been bailed out by Tax Payers, therefore Tax payers are (logically) shareholders. The correct solution is to (a) Remunerate the tax payers with any Bank profits as share dividends and (b) Provide tax-payers with the details of bonusses and who they were paid to and (c) Allow tax-payers to directly vote on the board and chair of the bank.

    That way, if any money is available for 'bonusses' the British public is at liberty to sack executives if we determine they have been paid excessively.

    -cheers from julz @P

  • Comment number 40.

    The trouble is that the finance industry has got the government over a barrel. Successive governments (including New Labour)have overseen years of decline in our industrial sector and cosied up to the financial sector in the hope that it was a panacea, remember "the goose that laid the golden egg", in order to finance the country's greed.

    Now, with our heavy industry all but gone, we are reliant on the financial sector to put money back into the treasury. It is in this environment we find the bankers operating without regulation and enjoying their lavish remuneration packages.

    The senior banker who spoke to you Robert obviously has no idea of what real market forces are. The reality is that this is a closed shop. A job for the boys and their high rolling friends. No one else need apply (except for the odd lucky politician). Market forces just do not operate here and the enormous 'profits' made by the banks (actually just money which has been skimmed off the real wealth creators) are used as an excuse to justify their exhaulted pay. And that at a time when the taxpayer is injecting unprecidented amounts of money into the system!

    Like turkeys at Christmas, bankers will not vote to give themselves a pay cut, so if they do not wish to "unilaterally disarm" then in a MAD world we must do it for them. Let's start with the PM on the maximum salary (which should be increased to say £300k) and then drop it from there for everyone else, with the lowest paid workers on 1/20th of that.

    Taxation is the key to this. If the bankers don't play ball, tax the hell out of them until they bring remuneration levels (i.e. salaries, bonuses and perks) back to sensible levels.

    If they want to leave the country, I'll personally pay for their one way ticket. I'll save myself a fortune.

  • Comment number 41.

    Bonuses in excess of £0.5m are totally unacceptable, unless that bank is solely an investment bank. Mixed retail and investment banking should NOT be legal and such banks should be split up. Retail banks should be boring and safe with salaries to match.

    Investment banks should NOT use the capital base of their retail operation to allow them to engage in casino gambling. Surely, stand-alone investment banks without all the grief of large numbers of staff and branches would be an almost a guaranteed investment - bearing in mind the bonuses they are able to pay. Ah, but I forgot, stand-alone investment banks would NOT be bailed out by the taxpayer when things went wrong would they?

    Football clubs should be made by law to pay IR monies owed on a monthly basis as they cannot be trusted to pay appropraite tax without going bust or owing vast amounts. Footballers often also have ridiculous salaries which are impossible for their clubs to pay without being in financial trouble.

    It might also be worth looking at the salaries and bonuses at the big four accountancy firms too. They have what amounts to an oligopoly and their charges are ridiculously high for consultancy and auditing. The auditing is largely a waste of time, they never seem to obviate seriosly large-scale company fraud. Auditing should include an on-going rolling MAT rather than just box-ticking exercise once per year on (often very late) filed company accounts were ok many months ago.

  • Comment number 42.

    If you limit the highest salary to that of the Prime Minister, wouldn't the Prime Minister end up getting paid £10m p.a?

    (We'll ignore the fact that it would be impossible to limit earnings as companies would need to know how much you earnt before paying dividends, and banks with interest etc.)

    What do you think bankers do with their bonuses? They spend them on things which creates/safeguards jobs etc. They will often spend it on the finer things of which many are manufactured in the UK (Rolls Royce, Saville Row, Morgan etc.). If you don't pay it then they'll leave and all you'll be left with is empty buildings as the banks and their profits will leave together.

    HMG will get a much better deal out of investing in the banks than they do providing free housing and pocket money for dirty workshy proles.

  • Comment number 43.


    I don't know whether to weep or laugh!

    So, poo and peanuts are out. Is there anything we can give these guys that they can't make mischief with?

    I know, holidays, somewhere with television, three meals a day and a regime they can relax into for a while. Somewhere that might even please her majesty?

  • Comment number 44.

    Well perhaps we should pick a number that will be the maximum salary for the bank, if they exceed this all tax payers guarantees are removed and they have to pay the normal rate for borrowing money plus a percentage. They will soon come round i suspect.....

    If they pout there lip and threaten to leave let them, but make it a stipulation that they cannot handle deposits/pensions etc etc in this country if they are not registered here for tax.

    They all owe us Trillions, and i dont want to see some accountancy trick in a few years wiping this debt off balance sheet.They should get used to the fact they are in our debt for a lifetime...and we should regulate accordingly.

  • Comment number 45.

    @ 6. At 12:09pm on 21 Sep 2010, watriler

    If you move a sum of money about, or advise on a deal which is in effect based on the movement/transfer of a sum of money, due to the size of the organisation you are working for, as a company there are large running costs and associated costs for putting that company in a position to acquire such monies or underwrite the same. However, as an individual greasing the wheels of these transactions, a % fee can be taken (much like an estate agent) but the work done for a small transaction requires little extra mental power than it does for a huge transaction. Aside from an increase in risk and paperwork, the individuals involved don't require double the qualifications or triple the knowledge. However, as such fees are a % of the overall sum transfered or a profit from the position taken and closed and based on such massive amounts, the corresponding bonus to that individual becomes disproportionate. Few other industries are able to get in the middle of moving such large sums about and hence when only taking a few % as a fee, as a total cost to the entire deal, its almost irrelevant but as a price for what is done by an individual being underwitten by the company they work for and not themselves, there is little representation between the amount paid in a bonus and what it took to arrive at the transaction in terms of unique effort, skill and manpower.

  • Comment number 46.

    @23 Dale Lemma

    I know, they need the money, I'm doing my best for them. I work evenings and weekends and look after the kids during the day while I'm not at university. (Full time = approx 15 hours a week)

    I really must look into getting one of those student loans, I don't need it but I guess if I don't take it those hallowed bankers might emigrate and then we would all be up derivative creek without a paddle.

    We're all in this together after all, I really must try harder.

  • Comment number 47.

    @ 13. At 12:36pm on 21 Sep 2010, Dr_Doom

    No. High bonuses mean that after 50% tax take, the sum left over for one banker could have instead employed/supported many, many people. Otherwise, why not pay bankers trillions of pounds...then HMRC would get trillions in tax receipts wouldn't they?! Have a think.

  • Comment number 48.

    How about making bonuses a percentage of pay? With the requirement to pay everyone in the group (i.e. all companies under the same ownership) the same percentage bonus. Think that excesive bonus payments would soon die out!

  • Comment number 49.

    There really is no faith in banks.

  • Comment number 50.

    The size of the bonus, we are told, relates to the skill of the individual and the need to retain the aforesaids ability to generate future income for the employer. If it is too small, he or she will simply go elsewhere and the bank will be ruined. However, how bright does one have to be to gamble to such an extent that the whole edifice comes crashing down and that once rescued, how bright does one have to be to borrow money from the BOE @ 0.5% and then lend it back to HMG @ 3%, claiming that most of the profit made should be funneled into the renumeration pool which can then be used to pay them a well earned bonus? The idea of re-commencing bonus payments to these people before all the bank rescue money plus interest has been paid back is a joke. No wonder the populace is feeling a little uneasy about the cuts.

  • Comment number 51.

    Ask a farm worker who shovels manure why he gets covered with the stuff. Ask a motor mechanic why he gets covered with engine oil. Ask a butcher why he's covered with blood. The answer is obvious and the same for all of them.

    But, if you ask a banker why he's swimming in money, he'll tell you that it's because he's a genius and the whole world will fail without him.

    For my part, pay me a £ 5 M bonus and I might even promise never to criticise bankers again on a BBC blog.

  • Comment number 52.

    This a smoke screen issue. If a company decides to overpay its staff so be it. If/when they go broke they will know why. If we tell the banks next time you go broke your on your own, they will have to take action and will stop overpaying their staff or suffer the consequence of their actions.

    The real story of the day is the public borrowing for August - £15.9bn of which over 20% is interest. Imagine what will happen when interest rates rise in the near future. Its not too hard to see us being sucked into a debt trap permanently, having to borrow to make our interest payments - forget ever repaying the debt! Our future will be decided by how much ground the Government concedes to Trade unions over the impending cuts.

    Not a nice place to find ourselves.

  • Comment number 53.

    The bank has made the profit so I don't see the bonuses as a direct issue for the taxperson.

    Make it a condition of a banking license that limits the highest paid employee to a maximum total benefits that is a multiple of the lowest paid. (eg. 30 times)

    The people who do the work in the bank would get more pay, the top earners would get reduced benefits and the taxperson would get an increase in PAYE from all of them. (hey, we're all in this together :)

  • Comment number 54.

    Should bank chairmen kill bonuses?

    If they don't, sooner or later, the people will.

  • Comment number 55.

    @ 33 dale lemma

    I worked in hotels for many years. Sometimes my day was 18 hours, it needed doing, especially around christmas, start prepping at 5pm, get the party out at 3am get set for the next one leave at 6am. 6 days a week during December.

    In the hotel industry they just pay you by the hour. Minimum wage. So while we made more for the week we certainly didn't think of it as a bonus, nor overtime as such. it was merely an offset for the reduced hours we suffered when there was no demand for our services in January.

    Now I know that's not as important as a back office worker in a bank but someone has to do it.

    I have no problem with others being renumerated for extra hours, as long as it is the same for those at the bottom. This is not the way it is for a large part of the hard working population.

  • Comment number 56.

    36. At 1:21pm on 21 Sep 2010, torpare wrote:
    This is at the root of this and all of the rest of our current financial problems. The system is wholly dysfunctional. Until it is reformed it's futile to emote about bankers' bonuses.

    Brother Topare. You are right.
    The discussion is merely a distraction to stop people considering the complicity between those that carry out the crimes and those that allow them to. All will be held to account. Ignorance is no longer an excuse. So ponder that politicians when you make your great deliberations about spending cuts and banking reform.

  • Comment number 57.

    Of course the bonuses should end. I have friends in banks who refer to their work as "money for old rope" (mfop) indeed many consider themselves over paid but what do you do refuse the money? Nobody else does in banking or senior management.

    We have in Britain a charter that basically looks at Directors and Senior managers, the majority who are characterised by the "Peter principle" - reach their level of ineptitude. Yet with a few notable exceptions they all get paid vast amounts for very mediocre performance.

    Examples include the new head of M&S with his £6 million golden parachute. The Chairman of Barclays for whom even his £100m fortune still requires that he actually takes his salry. Contrast these employees with Philip Green boss and owner of Arcadia who puts up his own reputation and money.

    For me Green can pay himself what he likes - he owns the business. For Diamond and other mere employees their responsibilitiy is to shareholders and customers not their own inflated egos and demands for outrageous cash.

  • Comment number 58.

    42. At 1:31pm on 21 Sep 2010, Lindsay_from_Hendon wrote:
    If you limit the highest salary to that of the Prime Minister, wouldn't the Prime Minister end up getting paid £10m p.a?

    err. No.

  • Comment number 59.

    Why are people given bonuses?

    It is a well-known fact that bonused people work to maximise their bonus and not to improve the business. There are those that argue that this is down to how the bonuses are managed. I would argue that they give an individual carte-blanche to go out and wreck the business, and the prospects of their colleagues who they need to sustain their job, to suit their own interests.

    If anyone doubts me on that one then just look at Royal Mail which has over the past decade or so been totally ravaged by its management's pursuit of bonuses. I also know a number of businesses who have been damaged by sales personnel encouraged to get turnover rather than profitable turnover.

    The banks fall into that latter category as they encouraged growth in sub-prime lending as a means to enlarge turnover at the expense of more profitable business. The banks crashed as a direct consequence.

    A business needs management which is focussed on sustaining and improving it through adding value, not on how much money they can squeeze from it. The bonus culture is another of those silly illusions which have grown up in recent years. They never worked on the shop floor - the more elderly reading this will remember the productivity bonuses of the Seventies - and I closed a couple down in my day as they were farcical.

    No: it is not a case of bonuses being immoral, being too much, or too little; it is a case of what bonuses do. Ultimately they are destructive to the business as they don't work. They are another example of the short-termism that permeates our culture. Time to get rid.

  • Comment number 60.

    27. PercyPants:

    I would have thought that all the bleating banks, bankers and their ilk who keep threatening to relocate abroad would have made good on their promises and left the country by now. How embarrassing for them that they're still here. Talk about the boy who cried wolf.

    Do us all a favour. If you're going to go, then go. Quickly, quietly and without fuss. Join the likes of Lindsay from Hendon and leave.

    Book the flight today.

    You won't be missed. Go and loot and skim some other nation into the ground.

    In the long run, despite all you say about the lost tax revenue, we are better off without you.

  • Comment number 61.


    That's the spirit! ;)

  • Comment number 62.

    It would not be so distasteful if the main players possessed some real talent. Now that their failings have been exposed for all to see, a sensible limit on remuneration should be introduced asap. Those who object can move on to other pastures.

    After all, it shouldn't be too difficult to replace such mediocrity!

  • Comment number 63.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 64.

    Bankers have tried to create a mystic regarding their profession thereby justifying a ridiculous level of remuneration. They know (and really don’t want us to find out) that there isn’t a job in banking that couldn’t be done by anyone with a reasonable level of intelligence after three months training. To say unless they are paid these silly amounts they will leave the Country - do they want help packing?

  • Comment number 65.

    Unfortunately populist politics are firstly causing the Government to not maximise it's tax take from the banks and secondly obscuring the real issue at hand. Consider the first point :

    1. The majority of bankers receiving large bonuses will be paying tax at 50% on those bonuses (i.e. >£150k pa income). In addition the employers (i.e. banks) will have to pay employer's and employee's NI on those bonsues (total of 15% as of next April). That means for every £1bn of bonuses paid the government takes £650m in tax. If those bonuses were not paid the banks would make larger profits which would be taxed at the corporation tax rate of 28% = £280m - a huge difference in the current deficit reduction climate. So by limiting bonuses they are harming further Government finances.
    2. The Government can try all it wants to limit the bonuses by regulation but generally more regulation just does not work and mostly causes perverse outcomes and more harm in the long run to competitiveness (and therefore future tax revenues). The problem and solution comes down to simple economics - if Banks are making huge profits it indicates a serious lack of competition either in the form of too few players or, in this case, due to a form of cartel (witness the recent announcement of the OFT investigation into Investment Banking charges). So the remedy to reduce the bank profits (and therefore 'obscene' bonuses) of the current oligopoly to the benfit of the whole economy via lower charges and lower business financing costs is to fix, urgently, the competition issues. This should not reduce overall bank profits but they will be spread amongst more players which will have the added beenfit of reducing reliance on the few big banks which create a systemic risk. As has been proved so many times more competition is the free market answer.

  • Comment number 66.

    52. At 2:04pm on 21 Sep 2010, Qasim wrote:
    The real story of the day is the public borrowing for August - £15.9bn of which over 20% is interest.

    The borrowing is an illusion and the interest a crime against the poor.
    The Zombies will use it as an excuse to remove what little spending power they have left.

    Brother Matt summed it up nicely:

    'So many people can't express what's on their minds
    Nobody knows them. Nobody ever will
    Until their backs are broken & their dreams are stolen
    When they can't get what they want then they're gonna get angry'

  • Comment number 67.

    Lets start at 50% max of annual salary and everyone likely to be eligible for a bonus has to publish their annual salary at the start of the tax year. ANY amount over 50% in money or kind - ie shares, cars, housing etc paid for or subsidised, must be taxed at 100% based on value.

  • Comment number 68.

    The only thing of which we can all be certain is that no committee, cabal or coalition will purge these stables. Where is our Hercules?
    There is none, and not likely to be one anytime soon sadly.
    Monetary systems and structural reforms will not be delivered. With the complicity of mainstream media the debate will stay firmly fixed on those aspects which rile us greatly but in the grand context matter not - i.e. bonuses.
    Yesterday we discussed morality, kind of. Today the question is 'should bank bosses kill bonuses' - all pointless argument designed to polarise opinion and promote false debate.
    Peston - where are the facts? Why is no-one outing anti-social behaviour, providing hard evidence of the corrupt practices that seem to abound, holding up the disadvantaged and disenfranchised as victims and asking 'why is this so'?

  • Comment number 69.

    Let's be clear on a couple of things. Firstly, it is nonsense to say that there will be a bumper tax take from bonuses because a lot of the time they are paid offshore or in some other way to avoid tax, especially for those at the higher end.

    As for the argument that bonuses have to be paid because these people are superstars, akin to footballer, and that furthermore we don't complain when footballers receive such rewards, well...

    For one, footballers are overpaid. The England team last won the World Cup in 1966 and the shambles who capitulated against Germany in 2010 are still paid the same, if not more, than the Spanish players who have dominated the last European Championship and World Cup and others, such as Messi, who last year defeated Arsenal single handed last year. But if the English football fans are still willing to pay, and clubs willing to borrow, to keep mediocre players in the style they have become accustomed, then it is their business. At least they're not being bailed out by the tax payer.

  • Comment number 70.

    The Government, presumably, puts the nation first, unlike many activities, which might include some financial activities. If bankers or banks consider the financial health of the nation of prime importance, then they should stop using the excuse that their employee(s) would leave their bank and the country, as we do not want unethical people, who do not share the nation's concerns, whatever the state of the nation's economy. The departure of this kind of employee would be welcomed by the rest of us, as it would create a more harmonious, positive and creative situation.

  • Comment number 71.

    I am not a banker, I do not know any bankers. I have no vested interest in this.

    If a banker makes a deal that makes a bank £1billion (say), then a large bonus does not seem unreasonable. If however the bank turns round and says "better not pay a big bonus, you know what this government are like" then the banker may leave that bank and go to another bank/country where he/she will get justly deserved high rewards for outstanding productivity.

    This would be bad for the bank and the country. Mucking about with banking is only going to weaken our banks and make it harder for them to get back into profit, by removing some of their most valuable assets(their top staff). I don't begrudge anyone a bonus if it is deserved, be they bankers or any other worker.

    I do however find it insulting the way the civil service doles out bonuses and wastes our tax money in so many other ways (anyone see the program on TV yesterday about defence spending?)

    If I were a bank, I would be packing my bags and moving to a country where it is not fashionable to bash your industry in the way it is here. Quite shameful, shallow and populist without considering the greater good.

  • Comment number 72.

    I see no difficulty with outlawing bonuses in the financial sector of the economy. I equally have no difficulty in transparent salary reviews. The giving of a permanent salary increase entails an employer's judgment on the future of the business and the employment relationship, and employment rights for the employee. Making salary the only legal emolument in a risk business will automatically cause a change in culture. Evasion can be dealt with by legislating with a sunrise clause with retrospective effect, giving businesses the opportunity to produce 'schemes'. At that date the line can be drawn between avoidance and evasion. For instance shares may be entirely appropriate in a partnership company but not at all appropriate for a listed company director. The go-it-alone problem? See if Europe will agree first, which is likely. Even Obama may, though the Senate may not in the end legislate.

  • Comment number 73.

    Some of the comments here are truly scary.

    Bankers did not cause the financial crisis, we all did. There, I said it. The financial crisis was created by years of living beyond our means on borrowed money aided and abetted by government through the false promise that it could substitute for real gains in productivity. It's *all* of our fault, and so we should *all* feel the pain. Upon waking up with a hangover it requires a pretty massive leap to ignore our own hand in our predicament and blame the barman. The same is true here.

    It's pathetic to see people on TV moaning about how hard their lives are and how much they're suffering in the crisis when for the *vast* majority it's meant they can't afford their new plasma screen TV this year, or the multi-room subscription for Sky TV.

    Yes, for some - including my own brother - the recession has meant redundancy and the anxiety of having to search for a job while trying to provide for four children (though note: it was *his* choice to take on the financial responsibility of 4 children and a mortgage.) For these people government should be there - and is - to help. After all - even in this 'drastic' year of cuts the government will still spend over £400bn this year. So let's not get it out of proportion: in the 1970s (I was born in 1983, so don't mistake me for some old moaner) rubbish went uncollected in the streets, the dead went unburied.

    Twenty years of deregulation and growth in the financial services sector has been one of the UK's most spectacular successes - we have gone from being among Europe's poorest countries (per head) to the richest. Literally millions of people have benefitted from the effects. It's touched all of our lives for the better. So what's disgusting in all this isn't the bonuses paid to bankers, it's the complete lack of acknowledgement for the success and wealth this has brought us over the years.

    Finally on to pay... There are two separate issues: the level of pay and the concept of a 'bonus.' Levels of pay are extremely high but the price is a job with exceptional instability (don't forget many thousands of bankers have lost their jobs in this crisis), significant stress, and very long hours. For those working in finance companies 70 hour weeks are a basic minimum. This is two full-time jobs for most people. And there are many working 100 hours plus a week. And let's not forget that of this 'obscene' pay up to 50% is paid back to the government as tax. I think we left the politics of jealousy ("Let's tax them 100% because it's a scandal that someone could earn that much money") in the 1970s. After all if it’s such a great job to have and all bankers are making off like bandits and laughing at the tax payer why aren’t we all trying to get jobs in banks right now?

    In respect of bonuses.. It is hard to understand that though it's called a bonus, it's in fact not that at all. For those working in these jobs it’s the opposite, really. It’s like having an employer hold back up to half of your salary until the year end and paying it based on factors entirely out of your control (eg. how a load of your colleagues who you don’t know have performed or the political machinations of your bosses). Think: in 2008 bonuses fell by between 40-80%. Imagine your salary falling by this much in one year. Ha. Not likely. Most people are bleating about having to having their salary on hold for two years.

    If it would genuinely make people happier for bonuses not to be called bonuses, but instead called something like variable salary element (VSE for short) then perhaps we should suggest that. And again, if you think that no one should expect to receive that much salary then we’re back to the politics of jealousy again (see above).

    Before you ask, no, I am not a banker. I am just tiring of excuses and buck passing. Wake up everyone and take some personal responsibility.

  • Comment number 74.

    Somebody has to come up with a way of valuing the implicit guarantee provided by the government, which would then be payable to the government either by the banks or by individual bankers, out of their bonuses.

    The bankers themselves would be the best people to come up with the valuation mechanism - this after all is their meat and drink.

  • Comment number 75.

    Starting with the assumption that we do not want to change our markets based approach to economy, one needs to question why this anomaly on high pay exists in certain sectors, and what does market approach provide as a solution to it.

    1. Do investment banks earn a lot more than other sectors of economy ? If so, why doesnt competition bring the profits down ? What is impeding competition ?
    - Look around where lesser profits are made viz. emerging markets. Competition is much higher for deals there, which brings rates down PLUS Government is a big buyer and it negotiates even harder (basis points deals where normal is %points)

    Potential Answers: (a) Regulation to enforce real competition, not where everyone charges 2% to 5%. From a government perspective, the issue isn’t the fact that this money is paid to IBs, the issue is that this money is taken unfairly from other sectors (b) Drive competition by participating in it viz. government deals (c) Competition increases with transparency - why not set up an industry league table, including smaller players, publish aggregated data what is charged depending on type of deal.

    Current management thinking is that the profits should be equally distributed to all stakeholders – shareholders, employees and customers. It appears that most of the markets economy believes in good returns to shareholders only. IBs/ Consulting firms have moved to rewarding employees as well, which is a good development in the macro sense, but customers are still adrift – who is going to look after the corporate customers, who are not supposed to need this looking after in a market driven economy ?

    2. Do investment bankers, and while we are at it, CEO's (in any sector) earn a lot more than what would be justified by the nature of work that they do ?

    Why not attempt to define a pay structure related to content of work (Impact Level), a known approach in organizations. Look at type of sector (utility vs tech), type of job (finance head of utility Vs Ops head); # of employees in organization, criticality of decisions made, rolodex/ rainmaking capacity etc. Start with transparency..

  • Comment number 76.

    As I see it if a bank salesman completes a deal, say he arranges a business loan to company x for £1 million repayed in two years the bank makes say 10% on the deal (£100 000). The bank salesman gets 20% of this as a bonus (£20 000) which he gets straight away.

    Surely he should get his bonus when the money comes in from company x?

    What happens if company x has over-extended it'self, and cannot make the repayments and goes under, does the bank salesman have to repay the bonus?

    What happens when the bank salesman 'knows' (or suspects) that company x will be in trouble if it borrows this money, should they not decline to lend (or more relevant shouldn't the bank salesman's bosses decline to lend the money).

    If you argue that bonuses are required to motivate bank salesmen, then why does the bank salesman's bosses get a bonus? What have they done to be given a 'bonus', (i.e. surely giving the bosses a bonus is tempting them to ignore high risk. Nick Leeson was allowed to speculate as long as he made bonuses for his bosses).

    A bonus should be in addition to, not in place of, a basic wage. If a bank salesman lends money at high risk who is to say no? Surely we should be determining WHEN a bonus is to be paid; and to WHOM it is paid.

    When top bosses are stopped from getting bonus for their salesmen's result, and instead if bosses bonuses are linked to increased share price, maybe we will end lending to high-risks.

  • Comment number 77.


    This is, to paraphrase an age-old sentence, the essence of the problem.

    If we had left market forces to make their course, and then financial institution had been left to fail miserably – as they well deserved in the face of bankers’ blatant greed and incompetence – then the problem of excessive bonuses would have corrected itself, because bankers would now been paid for what they are actually worth, and not on the basis of a self constructed myth of wealth creation.

    As it is, the custodians of the “free market” were saved from the abyss by a huge injection of public funds; the final effect was that the debts were socialised, while the profits are privatised.

    What is worse still, huge funds – rather than being invested to support and develop healthier sectors of our economy – have been squandered to prop up artificially a business model that has proved to be fundamentally flawed in such a spectacular fashion.

    We are now left without a viable and sustainable economy, and without the money to buid one.

  • Comment number 78.

    As #5 points out, "banks and are highly protected monopoly they can effectively pay themselves an infinite salary". Exactly! It's the monopoly that's the problem. Either dismantle the monopoly, or implement the controls and responsibilities that must go with a monopoly.

  • Comment number 79.

    @59 Stanilic said :
    A business needs management which is focussed on sustaining and improving it through adding value, not on how much money they can squeeze from it.

    However, banks are not normal businesses, there is basically nowhere else to go. Sure, if you don't like one then choose another, but they are basically all the same, so what would you gain?
    Banks prosper - even when they create the biggest single disaster facing the developed world in centuries - they still prosper.

    So, the only sensible solution is efficient & effective regulation and law & punishment. Just as a Chairman, or MD of a company is punished by the law for putting the health of the environment in danger, then perhaps Chairmen and Directors of banks should be similarly punished for putting the health of the economy in danger?

    So it's back to how do we stop them making so much money that they can afford to pay such amounts in Bonuses? I guess halving the interest rates on Credit Cards would be a good start - Gosh, I can almost hear them choking on the champagne as they read this....


  • Comment number 80.

    Any banker salaried above the national average should be forced to live on jobseekers' allowance until such time that the sector has repayed the amount used to bail it out.

  • Comment number 81.

    > "If a chairman decided to unilaterally disarm (ie slash bonuses)
    > they would commit commercial harm and fail in their duties"

    I can almost hear some pompous, plummy voiced banking twit making these ridiculous claims.

    Don't they get it, even now? It would be commercial suicide not to slash bonuses, because we'll shut them down and throw them on the dole! Their choice.

  • Comment number 82.

    Sorry but I think most of you are wasting your breath.

    Unless you advocate reincarnating some version of the Soviet utopia (complete with secret police), all attempts by government to put limits on pay are doomed to futility and end up creating far more problems than they solve. Remember incomes policy, the social contract, and all that jazz? Then it was the wicked Unions we were all bashing, now it's the wicked bankers (I do it myself when I want to lash out at something - makes me feel much better, but not for long).

    It's the nature of our banking system that's at the root of the problem.

    People simply don't realize that it doesn't have to be the way it is; there are perfectly workable, and much better, alternatives. Just educate yourself about them.

    There's nothing new about monetary reform: control over a nation's money has been a millennia-long battle between plutocracy and democracy in many nations, starting with ancient Greece. In modern times it's been an ongoing battle since the granting of a royal charter to James Paterson to set up a private corporation to be named "The Bank of England" in 1694. It was downhill more or less all the way after that (in Britain anyway, the American colonists tried to evade the BoE's clutches by issuing paper fiat currency, but were declared by the British government to be committing treason and forced to stop - so they declared their independence instead).

  • Comment number 83.

    @ 67. At 2:44pm on 21 Sep 2010, David wrote:

    > Lets start at 50% max of annual salary and everyone likely to be
    > eligible for a bonus has to publish their annual salary at the
    > start of the tax year. ANY amount over 50% in money or kind - ie
    > shares, cars, housing etc paid for or subsidised, must be taxed
    > at 100% based on value.

    I like the sound of that, but it doesn't solve the main problem - how do we get back the ill gotten gains they've made off with so far? These people have to be made poor, or they'll repeat the same thing, over and over. We must go after them this time around and make them suffer.

  • Comment number 84.

    One thing that seems o get missed within all of this is that the vast vast majority of people employed within IB's do not get £100k + bonuses.

    The guy putting forward the idea of levying a higher rate of NI above a multiple of 3 * the median wage or on some similar basis may have a point. Although given it all goes into one pot anyway (tax/NI etc) doesn't this already happen with the withdrawal of the personal allowance above £100k and then the 50% rate above £150k?

    I think the obsession the media and public seem to have with bankers pay is actually more troubling than the majority of those getting paid such high sums. Afterall it seems a helpful way for us to blame the excesses of teh past decade and absolve ourselves of any fault and therefore responsibility for the mess we face now.

    The spend today attitude that took a hold of this country over the last 10 years is the real crime in all this and it goes right across scociety from those who took out several credit cards or loans to a goverment that created a unsustainably large public sector.

    It will hurt everyone to resolve teh situation but we have to address it so that future generations do not bear the cost of our greed. Bankers have there part to play but its not all there fault!

    Those who lived within there means the last 10-15 years are as a general rule doing pretty well these days with money to invest at the right time. There's a lesson there as given the nature of economic cycles its worth bearing in mind in the good times that should hopefully arrive in 2 or 3 years!

  • Comment number 85.

    Part of the problem here is that those who receive these obscenely large sums of money seemingly cannot speak English

    My understanding of the term "BONUS" is that this is an additional payment on top of a regular salary. Way too many bankers and financiers seem to regard it as an integral part of their salary and base their grossly inflated standards of living upon this...

    They should be pointed firmly in the direction of a copy of the Oxford English Dictionary

    Time for another outing for Cedric the pig ?

  • Comment number 86.

    1. At 11:36am on 21 Sep 2010, Morpheus wrote:
    "The only limiting factor to the amount that bankers can pay themsleves is:

    What can we get away with without getting lynched?"

    Quite a lot it seems.

    Go on Vince, take the bankers' money from them. You know you want to. Besides, if you do this (and be sensible about it), they aren't likely to scurry away en mass.

  • Comment number 87.

    Am I missing something?? Whatever bonuses they get and whether or not they deserve them, do they not pay income tax at their highest marginal rate?
    Is it not better for the UK to collect this (plus the corporation tax from banking activities) than have it pocketed by the Swiss?
    Let's be honest, we don't do much in this country to pay our way in the world. I know the crypto-socialist tendency would like us to feel queasy about how the revenue is generated, but it's not like they're a drugs cartel or trafficking sex workers

  • Comment number 88.

    73. pjs501:

    Nothing sadder than seeing another brainwashed drone spout the party line.

  • Comment number 89.

    Just to clarify what is almost certain to be sugegsted post my last post I do not work in the banking industry

  • Comment number 90.

    @ 71. At 2:57pm on 21 Sep 2010, taxpayer2010 wrote:
    > If a banker makes a deal that makes a bank £1billion (say), then a
    > large bonus does not seem unreasonable.

    There are so many things wrong with your Weltanschauung that I barely know where to begin. But let's start with this. If bankers make deals that looses the taxpayers (say) £500 billion, then large fines all round and utter impoverishment for the bankers does not seem unreasonable does it?

    > the banker may leave that bank and go to another bank/country. This
    > would be bad for the bank and the country.

    Let's keep our fingers crossed, eh? The further away, the better. What topsey-turvey world do you live in, anyway? In what world is it “bad” to get rid of greedy, parasitical, sociopathic wastrels?

  • Comment number 91.

    What is most offensive about bankers pay is that unlike people in the entertainment or sports world,bankers have a captive audience in that to live in the modern world it is almost impossible to get by without some form of bank account.
    We were encouraged to be feckless and foolishly fell for it,got in a collective mess,defaulted,the banks started to tumble,we bailed them out and hey presto!repeat the cycle again they think?
    If we do try to change they will not think twice about upping sticks and saying see you suckers!The whole world will have to globalise fairness to have any prospect of real change because inherently selfish people won't change on their own!

  • Comment number 92.

    #73, pjs501

    Ignorant stuff. How do you think savers feel? There are as many savers as borrowers, which of course you have conveniently forgotten in your rush to defend bankers.

    If you can comment on the 1970s with such expertise despite being born in 1983, perhaps you should have a longer think about the 1980s, and why our economy is so service based.

    As to your rather tasteless dig at your brother... hang on, you're a Tory, you're young, competitive, you seem to enjoy having a dig at your brother... which Milliband are you, exactly?

  • Comment number 93.

    This blog should be read in conjunction with Stepanie Flandes' latest offering:

  • Comment number 94.

    Afternoon Robert,
    I have a couple of simple questions that you may be able to help me with.
    We have two part nationalised banks ,RBS and Lloyds. If the tax payer owns part of these banks then who elects the Board of directors?
    I don't recall being asked to vote on the composition of the Board so the fat cats elected must be Government men. Therein lies the first problem, sponsorship of directors and accountability.
    Secondly, if the above banks make huge profits, then why doesn't the Treasury insist that this profit is used to buy back shares that the Government owns for cancellation?
    If the taxpayer could see that their loans to these banks are being repaid steadily then there wouldn't be so much ire about bonus payments.
    Thirdly, if the banks hide behind contractual agreements then offer the recepients of these contracts the opportunity to resign or take a revised contract (that worked wonders in a firm that I used to work in).
    I think that you know the answers to all of these questions so we must accept the situation as it is. Please no more banker blogs, you have trotted these out for two years now and you are employed as the BBC business correspondent not the British Banking Correspondent.

  • Comment number 95.

    Where I have a problem is when companies post huge losses yet still pay out massive bonuses to certain individuals (and this is usually the banks). In my book, if a company has made a loss then the payment of even a single penny in bonuses is unjustifiable.

    The company I work for operates a profit-sharing scheme. This scheme allocates 10% of the post-tax profits to be paid as a bonus to the workforce. This figure is converted into a total percentage of wage bill and that percentage of salary (up to a maximum of 10%) is paid to every employee as a bonus. It doesn't matter how well or poorly you performed as an individual or how profitable or otherwise your department may have been. The same percentage goes to everyone. Not a single penny is paid out unless the company shows a profit. In this way, everyone is working toward making the company profitable not just following their own short-term nest-feathering agenda.

    I don't see why anybody sane could object to such a system being applied to the banks. Although I suspect the thought of a large portion of his multi million bonus being split amongst the 'undeserving' oiks who man the bank's offices and counters whould probably cause your average investment banker to choke on his gold-leaf coated caviar.

  • Comment number 96.

    @ 42. At 1:31pm on 21 Sep 2010, Lindsay_from_Hendon wrote:

    > What do you think bankers do with their bonuses?

    They spend them pointlessly, driving up prices.

    > If you don't pay it then they'll leave

    If only we could get rid so easily.

    > all you'll be left with is empty buildings

    That's one way to cut stupid emissions of carbon dioxide.

  • Comment number 97.


    So - hand over the country's billions in current and future tax revenues to the already rich so they can give themselves vast bonuses - in fact BORROW BILLIONS against the future in order to do so - in the craven hope some of it might trickle down to a small number of who sell luxury goods. More likely they will ship it offshore and spend the rest on expensive imports (remind me who owns Rolls Royce?).

    And the reason you feel we are merely being sensible in handing over all this money - our money - is ... well what? They had a disastrous run of bets inflating the value of a load of products they didn't understand and had to be dug out to the tune of trillions - the entire wealth of the world for a year by some measures - and now thousands of UK citizens will be thrown out of work to pay for the hire of the rescue cash - hired from the self same people who caused the problem - because we stopped them going bust. Presumably the national insurance and tax paid by those newly unemployed people is less valuable or fragrant in some way.

    Bet you wouldn't support giving a shipyard £30 million to keep it open though would you? - can't support 'failed industries'. Except banks of course. The only subsidies you lot support are those for the wealthy - and the bigger the better, some of it might come your way.

    Someoneone up the page said - let Green pay himself what he wants its his company - of course, it isn't his company for tax purposes, so he won't be paying 50% tax or anything remotely like it. Only suckers pay tax after all - us in other words.

    What are you - an estate agent? Are you dependent on the tiny crumbs these people throw you?

    There is no free market where there is no free flow of information. The banks don't trust each other and that's why the interbank market dried up without our money. I'm no marxist or communist but let them all go - they tried to rig the markets and will be unable to believe their luck that instead of prison they are getting bigger payouts than ever.

    These people are getting massive bonuses out of bank profits which come by as a direct result of vast explicit taxpayer support, and hidden taxpayer support (as many have mentioned) via the back door - lend to the banks at 0.5% and then they lend back to us at 3%. In addition they are charging their customers 15-20% interest.

    An idiot could make money in those circumstances. Iditos and crooks is what they are.

    And idiots tehy are - tehy

  • Comment number 98.

    The British October (financial) revolution will be on us soon, which in a way is a relief, the phony war is finally over. As my beloved ( Lady Grey) pointed out over dinner last night, 'That the only certain thing we have at the moment is the uncertainty.'

    Most of us, will be happy if we just keep our Jobs, there will be no winners only losers amongst your average workers, that's why I think that the bankers bonuses ( if there are any ) should be quietly put in a biscuit tin for the time being, I don't think any of us could stomach any 'loadsamoney' taunts from our bankers at this present time.

    As an add on for 'Sweet Vince Cable' I see those workers that are more skilled than there British counterparts, have done a great job at the commonwealth games....

  • Comment number 99.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 100.

    Let's just forget for a moment the meaningless waffle of Clegg and Cable. We need the banks to be successful, as successful as it is possible to be. The incentive for doing that is very good pay for very good work. Traditionally, banks have done this through bonuses. Personally, I can't think of a better way to do it and I do not want government interfering with pay scales. That is not the job of government, and is entirely out of their sphere of competence - if that is not an oxymoron in the context of the current government. Bank bonuses might be unpopular, but that's just envy and an inability to understand reward for excellence. Bank bashing is hardly the most effective route to economic recovery!


Page 1 of 2

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.