'Should bankers' bonuses be stopped?' poll discussion

DCodd

Assuming that these bonuses are paid annually or half yearly, would this not have to apply to shareholder dividend payouts as well i.e. no returns on their investment until the profit is a certain age?

It would open up an accounting minefield and taxation would reduce shareholders returns as the funds would be effectively taxable retained profit for a year or two. Or am I missing a point here?

Cynic_2

I think their bonus rate should drop dramatically, without warning, just as happens with interest rates on savings accounts.

plm106

This country relies heavily on financial services as an industry and we must do everything in our power to have the best practices and outcomes in a globally competitive market.

The danger of reducing total salaries is that we'll lose talented individuals who will simply relocate to New York, Hong Kong, Zurich etc

So two options are:
1) to make sure to the best of our ability that only good practices are rewarded (subject reward systems to independent audit?).
2) to ensure a joint effort across the globe to introduce reward limits (which may artificially contract investment banking etc in the long-run.

plm106

Yes, but you do receive many other perks which you value highly enough to stay working for the government.

Let's not forget that it is only a few dozen people who are ultimately accountable for this crisis. Most 'bankers' were just doing their job. This did not include gaining the v.complex knowledge to put together the big picture or the authority to act on theories outside their remit.

Financial gain is one of very few perks amongst many personal sacrifices bankers have to make.

jmb2808 wrote: »

I work for the government and work my hardest and I never get a bonus or even a letter of thank you every year and to top it all off the government are in talks about stopping a pay rise next year for us!
How dare they!!!
Why should they get a bonus each year for just going to work and doing their job???? I don't!!!!

djhworld

@MSE Martin

Totally agree, the current bonus structure rewards people in the short term, giving the incentive to take huge risks etc.

By the time these risks unravel and become damaging - the person who originally did the deed is probably long gone with a whole load of cash in his back pocket.

The best way is long term reward structures, like the example you gave - where a "reserve" pool gets put aside and eaten into should anything go wrong, after 10 years or so of good service, staff are evaluated on their performance and given a bonus accordingly.

This gives the incentive to the worker to take on risk responsibly and within the best interests of the company he works for.

At the moment it's more "smash and grab as much as you can before the alarm goes off" and that is plainly wrong.

People who complain about these city workers getting vast sums of money have got to remember that these people work 12 hour days in an intensely pressurised environment where millions of pounds gets moved around every second.

wildthing01

djhworld wrote: »

People who say "I do a job that's worth something!" are completely deluded as to how this country (and other nations with similar economic policies) works.

Our economy relies on The City. It's one of the biggest contributors to the UK GDP.

If we moved away from this focus the country would completely fail.

erm - isn't that what's already happening???????

the ability of non-profit organisations to provide their services to the most vulnerable people is being severely compromised, BECAUSE we are so reliant on a City that has contributed to the recession.

wildthing01

ses6jwg wrote: »

Its because most people are actually more socialist than they could ever believe and have little grasp of economics.

I'd say most of it amounts simply to jealousy.

"I don't get a bonus so nor should you, I hate bankers, ner ner ner!"

you're right - i am quite socialist and i do indeed have little grasp of economics. however, what i see is the end result of a badly managed economy, and it seems to my poor little uneducated mind that the bonus system has been rewarding poor performance (e.g 'fred the shred' - ok - i know that was a pension, not bonus - but amounts to same thing), hence why we are now in the mess we're in - banks have been lending to people they knew could not pay, and the people doing the lending have been rewarded for gaining more business, despite the fact it was bad business. in the real world, if a small business operated the same way, they'd go bust pretty quickly, and tough luck to them, but the banks have got away with it.....

ses6jwg

So restructure the bonus system to reward long-term objectives and acheivements?

It also needs to have GLOBAL agreement.

People don't seem to realise that if little old Britain went and abolished bonuses completely all the talented bankers (YES THEY DO EXIST DESPITE WHAT THE MEDIA TELL YOU) would p!ss off elsewhere to earn more money (Yes believe it or not they do the job for money like everyone else)

Oh and if you think 2.8 million unemployed in a country of 60 million and an inflation rate of 0.8% is a country failing maybe you should spend some time in North korea or Zimbabwe.

Get real.

Blacksheep1979

Ok another view on the whole bonus thing - so say a trader gets a £100k bonus now lets have a look at how that gets broken down -

£40+k goes on tax (straight to the government and the country)
the remaining 50-60k will most likely get spent on say a car/holidays etc, say that's a 60k car, 15% of that is taxso £51k goes to the company which in turn pays tax on profits, pays wages (again more tax and NI on that) etc etc etc.

Most of the bonus ends up going back into the governments coffers and benefits the country as does the rest of the money that goes to peoples wages and is spent in service industries etc.

Now if the bank doesn't pay a bonus the money remains in the company and doesn't benefit anyone - in fact it makes the company more attractive for a takeover and that doesn't benefit anyone.

Everything reeks of the green eyed monster from the folks saying don't give bonus's as I don't get one... These are probably the same people who took out interest free loans on TVs and 110% mortgages which they've now defaulted on - but it's the banks fault for lending it, not theirs for saying they could afford it...

moggylover

Well here is a novel idea! These people usually already get very tasty salaries and have pretty good lifestyles - why should they not just try living within those means (after all, they are the first to suggest everyone else should:rolleyes:) and doing the job they are already paid to do!

As to "working hard" and "needing some incentive"! This balderdash has been trotted out for donkeys years by the over-paid sector!

Working hard is doing a long slog, in a job you hate for minimum wage or little more, with the stress of knowing that even if you put in 18 hours a day you are struggling to keep a roof over your head, food on the table, and the heating on when it is cold out and even one holiday a year is not a possibility!

But of course, for all my life I have heard about the fact that ONLY the rich work hard:rolleyes: and only the rich "deserve" - and you know what? People are still dumb enough to believe it!!!!!

We have seen (only many still do not want to see) that the entire system was deeply corrupt with many of those involved behaving little better than criminals, although smart enough to not leave clear paper trails to prove their complete dishonesty! Would I trust any of them with my kids savings jar? Not a chance!

Have I got a 110% mortgage? Nope, I own my own home outright. Do I have a low paid job? Nope, I am a well paid professional who can pick and choose the contracts I take (but take on a great deal of stress with each of them - certainly as large as any banker playing with other peoples money;)) and have substantial savings. Am I jealous of these shallow and greedy high-flyers? Not even a little - I prefer integrity and decency to conspicous consumption and I don't need a BMW to persuade myself (or others) of who I am:D