Why do people resent banker/trader bonuses?

Avon2001

@ wildman

also hasn't RBS completely paid back its loan? or would the public prefer to overlook this?

No not even remotely close. RBS has paid back the £163billion it received from the taxpayer in emergency loans however there's still the little matter of the £75billion in credit guarantee scheme bonds guaranteed by the Treasury and the Bank of England special liquidity scheme. Then there's £36.6billion from the Bank of England (and some £52.4billion from the US Federal Reserve). Plus we the taxpayer still own 82% of it which means we're still on the hook for any losses it makes.

@ Ashles, that's the theory, it may not be the reality.

geordie_joe

wildman0609 wrote: »

to be honest its all jealousy isn't it?

people seem to be concerned with the fact the banks were bailed out. but would the government prefer their bail out money back in the form of 20% corporation tax if the banks don't give a bonus, or 50% income tax on the bonus.
As a tax payer i know what i prefer!!!

The tax banks/bankers pay does not go towards paying back the bail out money.

wildman0609

geordie_joe wrote: »

The tax banks/bankers pay does not go towards paying back the bail out money.

so what would be best, is to effectively reduce the pay of the best people in the banking industry to the point where they all leave. that sounds like a much better way of getting the bail out money paid back. it would also mean the 80% share the government owns would be worth less as the bank wouldn't be worth owning

geordie_joe

wildman0609 wrote: »

so what would be best, is to effectively reduce the pay of the best people in the banking industry to the point where they all leave.

Nobody has said we should reduce their pay to the point where they all leave. In fact, nobody has suggested reducing their pay at all, just their bonus.

wildman0609 wrote: »

that sounds like a much better way of getting the bail out money paid back. it would also mean the 80% share the government owns would be worth less as the bank wouldn't be worth owning

You are taking an argument, which you cannot win, and twisting it. We are talking about bonuses NOT PAY.

Those people who gave back/refused to accept their bonus have not left, so why should anyone else?

fawd1

geordie_joe wrote: »

Nobody has said we should reduce their pay to the point where they all leave. In fact, nobody has suggested reducing their pay at all, just their bonus.





You are taking an argument, which you cannot win, and twisting it. We are talking about bonuses NOT PAY.

Those people who gave back/refused to accept their bonus have not left, so why should anyone else?

Because everyone else doesn't have their starting salary. Realistically, people in that industry count on their bonuses as a major incentive for the work they do. And believe it or not, they work very very hard. Loooong hours, no job security and huge amounts of stress. There's a reason most bankers hit burnout by about 45. And also, if they are receiving bonuses, it's because they have generated a huge amount of profit for their company. For example, for generating over 2 million of profit one guy I know was given a bonus of 75k. I don't think that's unfair. In the last few years, these years these bonuses haven't been cash payments anyway, but shares in the company, which can't be cashed for X amount of years. This then gives the workers the incentives to continue making sure the bank is profitable.

Anton123

fawd1 wrote: »

Because everyone else doesn't have their starting salary. Realistically, people in that industry count on their bonuses as a major incentive for the work they do. And believe it or not, they work very very hard. Loooong hours, no job security and huge amounts of stress. There's a reason most bankers hit burnout by about 45. And also, if they are receiving bonuses, it's because they have generated a huge amount of profit for their company. For example, for generating over 2 million of profit one guy I know was given a bonus of 75k. I don't think that's unfair. In the last few years, these years these bonuses haven't been cash payments anyway, but shares in the company, which can't be cashed for X amount of years. This then gives the workers the incentives to continue making sure the bank is profitable.

They are essentially generating profits with money they can afford to lose because its not their own capital. Traders and bankers have a huge risk to reward ratio in their favor. Yes they do work long hours and there is a lot of stress because investments can go very wrong on poor judgements. However, when you have the analytical tools and news flow they have at their disposal, I don't think its an extremely difficult task making money. I personally think that industry is a goldmine because those who manage to get these jobs are in for big rewards. However, the industry is very competitive and very few get in. Although many have an Oxbridge background, they definitely do not need to. Its just that these banks tend to select people with an overwhelmingly Oxbridge and private school background. When you have £40-£50 million and more to invest, then even a 5% return is few million. I think a £75K bonus on a paltry £2 million profit (paltry as far as these banks are concerned) is exceptionally good.

If you can get a high profile job in this industry, its basically a license to print bonuses.

Cerisa

It's not jealousy.

Carers often work 60-100 hour weeks, and don't get any bonuses (or pay, most of the time). Ditto nurses. A job in the army is pretty much 24/7. The banker / trader doesn't earn so much more because they work harder, or risk more. And they get rewarded extremely well for what they do.

So when, despite ruining the British economy, they get huge bonuses, at taxpayers expense (because the banks were bailed out with our money), people get a little sniffy.

Especially when that carer working 100 hour weeks gets told it's all well and good him / her complaining about how the local respite centre's been shut down, but the country just can't afford it right now, so he / she will just hafta stop being lazy and start working 130 hours a week.

It's more galling still when those same bankers / traders get huge bonuses at our expense and pay the absolute legal minimum on their taxes.

But yeah, i'm clearly just jealous.

somethingcorporate

It's like football, the figures have just completely lost touch with reality.

I remember seeing recently that the return to shareholders for a major bank (i.e. the people that OWN the company) saw a total annual dividend of something in the region of £700m. A pretty crap return when the annual bonus pool it took to achieve this return was in excess of £3bn - just a completely topsy-turvy and illogical situation to be in.

I would love to earn the millions they do but frankly I am happy where I am.

Chomeur

Anton123 wrote: »

Its just that these banks tend to select people with an overwhelmingly Oxbridge and private school background.

I don't think that's true actually. I have an Oxbridge and private school background and have never been able to break into banking/trading. Look at the Adoboli guy in the news at the moment. I don't know about where he went to school, but he went to Nottingham University. I was told of a guy last year who is a trader at Goldman Sachs and the best they've ever known. He went to Leeds University. Thing is traders have got to think like the rest of the market, and if you're too bright you won't. You'll have lots of clever ideas which are too far ahead of the market. And these people do work really hard. No reason to resent their bonuses - it's just luck and a willingness to get in at 7 in the morning every day and never see daylight all week during the winter.

Cerisa

I dont doubt they work hard. I just don't think they work any harder than a lot of other people, who don't get anything like the same rewards.

They also don't seem to be held accountable for their actions.

It's like, hey, you lost us billions, so people already living below the poverty line have to pay higher taxes and go without essential services to keep the bank going.

But nm, you work really hard, so have another bonus.