Fury as Northern Rock's 4,000 workers to get £8.8million in bonuses

Thrugelmir

robin_banks wrote: »

A bonus is normally payable as a result of performance. As NR have repaid on time half of a £26,000,000,000 loan they appear to be due this payment of £8,800,000 between 4000 staff.

That's an average of £2,200 which is of course subject to Tax & NI so the state recoup a third of this.

Should NR have defaulted what would the financial implications have been?.

It is a bit no news to say the least, still the figures look good on a headline.

All aboard the outrage bus !!.

and the majority of staff probably have their mortgages with NR so can use the bonus money to pay them down. So the money ends up in the coffers of the treasury anyway.

£2,000 bonus isn't excessive remuneration from achieving an annual target.

Bet the Daily Mail reporter is on a far higher salary than most NR employees. For this quality of journalism whatever he earns is excessive.

robin_banks

People get a bonus for doing thier job well ,delivering a target/outcome/result that usually benefits the organisation they work for.

I'm certainly not saying all bonuses are a good thing, but in this instance I don't have a problem with it.

macaque_2

A number of people are suggesting that the payment of bonuses is all well and good. What a jaded country we have become.

The bank was brought to its knees by unsafe lending practices. Some of the debt will be good but bonuses will have been won by hitting exceptional targets. The 'exceptional' part of the loan portfolio will be the bit that has done the most damage. Staff now have an opportunity to win a second bonus by getting rid of the loans. This time they will earn their bonus by going for the easiest targets and getting rid of the good quality debt first. In the process, some honest borrowers will lose their properties whilst others will be pushed into the clutches of sharks. Bonuses do not turn bad debts into good.

In this case, bonuses are wrong for lots of reasons.

CLAPTON

robin_banks wrote: »

People get a bonus for doing thier job well ,delivering a target/outcome/result that usually benefits the organisation they work for.

I'm certainly not saying all bonuses are a good thing, but in this instance I don't have a problem with it.

Lets remind ourselves how the bonuses were earned.

When NR mortgagees came to the end of their fixed rates, they were offered very high APRs if they wanted to stay with NR.

Those that had insufficient equity were forced to stay and pay very high APRs the rest went elsewhere.

Now difficult was that ?
how praiseworthy was that?

the bogus bonus culture has been a major cause of the banking meltdown.. we need less of it not more.

Tiggergirl

I don't see the problem. Some of these staff will have been in fear of their jobs for quite a while and if they have met their objectives I don't see why they shouldn't get the bonus for doing so. This isn't just fat-cat executives getting a bonus, it's the ordinary workers who have probably gone through a great deal of worry and hard work.

I'm in a job (not a bank) where I get a 10% bonus, based on my own and the company's performance, so I'd be a hypocrite to criticise NR. How many other people here get a bonus? quite a few I bet including the Mail reporter.

chewmylegoff

CLAPTON wrote: »

Why does anyone get a bonus for just doing their job?

i suppose it is difficult for people to understand if they don't get remunerated in that way themselves.

personally my employment contract specifies that i will get a bonus as long as my performance is satisfactory. if my performance is more than satisfactory i get a bigger bonus.

some employers use it as a method of lock in, as the bonus is generally paid some months after the year to which it relates. thus my salary for year X is 100 units. however, because e.g. 10% of my salary is paid as a retrospective bonus, if i leave before year X + 4 months, i only get 90 units. therefore i am incentivised to stay for that extra 4 months.

by that time i get my extra 10% I am already well into the next year, so i have earned 1/3 of my bonus for next year so i don't want to leave and lose what i have earned. etc etc.

in this case, they have agreed a specific bonus model to incentivise staff to (i) ensure the loan to the govt is paid off and (ii) the organisation is returned to the private sector asap. part of this is incentivising staff to work towards a goal, but there is also a staff retention factor in here. you have to remember that when the terms of this bonus arrangement were agreed upon (late 2007), the economic conditions were far different than they are now. NR had to take some steps to ensure that its staff didn't leave.

sdooley

macaque wrote: »

Bonuses do not turn bad debts into good.

Well they might do - presumably some of the staff receiving bonuses will be chasing arrears, debt collecting, repossessions etc - not a nice job especially if you've been force-transferred from a branch/sales role. There's a lot of evidence to suggest sensitive, timely and forceful intervention can stop some arrears turning into total defaults.

Stand-alone debt-collection businesses certainly do pay bonuses to staff who meet performance targets - persuading customers to pay back arrears (perhaps by sacrificing non-priority debtors) is a difficult skill to achieve, but a relatively easy one to measure. It being done successfully in marginal cases is in everyone's interest - even the customer ultimately as resale values out of repossession are so low.

storminbalder

I am sure that there are a large number of Daily Mail journos that are fully aware that they a writing a big pile of poo. They are simply writing what is required of them by their editor and ultimately their readership, in order to get paid.

chewmylegoff

storminbalder wrote: »

I am sure that there are a large number of Daily Mail journos that are fully aware that they a writing a big pile of poo. They are simply writing what is required of them by their editor and ultimately their readership, in order to get paid.

or alternatively in order to secure an annual bonus for writing a greater amount of reactionary drivel than could reasonably be expected of a hack of their experience and base salary.

mummytofour

Bleep bleep fing bleep that really is the most discussing thing I have heard in a long time. Think about all thoses on JSA...