And you got all that from reading the "financials" did you? lol
Should failed bank RBS be allowed to exceed EU bonus cap?
- Thread starter scorza
- Start date
And you got all that from reading the "financials" did you? lol
OK here is a simple question?
Define a banker?
What does that entail?
What criteria does a banker need?
What are the hours of work?
What are the qualifications required to become a banker?
Where do you start in education to become said banker?
Just a big boys club and you aint in it!!!!
Define a banker?
What does that entail?
What criteria does a banker need?
What are the hours of work?
What are the qualifications required to become a banker?
Where do you start in education to become said banker?
Just a big boys club and you aint in it!!!!
You should try it, educate yourself. Beats having an opinion that goes no further than the daily mail headline.
Well that depends entirely on how bonuses are structured and what kind of profit maximising behaviour they incentivise. I think you're oversimplifying it to the point of being meaningless.
I hope I am simplifying it! That's the intention.
The point still stands - make profit get bonus. As a company they made money and as a company they should dish out bonuses how they feel.
What the alternative? Talent leaves and we get left holding a pup.
I think if that's the best comparison you could come up with then reading the Daily Mail would be a good start for you.
OK - let's get back on topic shall we?
Do you still not understand how RBS made a profit? Please - give me your analysis.
The psychology of incentives isn't that simple though. By rewarding short-term performance you're actively encouraging myopic behaviour.
For example, I work at the largest and most established multi-manager investment firm in the world and the bonus structure for those on the trading floor is structured in such a way that you are rewarded for decisions that have paid off in the long term (i.e. 3 years). Being CFA level 3 is a bare minimum for anybody working on that floor and a disproportionate number have PhDs in finance and economics-related fields.
Psychology aside, RBS is a taxpayer-owned bank. Normal rules do not apply. Frankly, 200% base bonuses to employees of a bank that is a state-owned dog are unacceptable, regardless of whether or not said employees made those mistakes. If they're that good that they are deserving of that kind of remuneration, then they should have no problem getting another job elsewhere.
Are you suggesting a cleaner/lift engineer should be incentivised/rewarded in the same way as a banker? Seriously?
And you know the team* doesn't share in a bonus pool how...?
*And no I'm not including the cleaner, technician and receptionist in the team
I don't see why everyone who played a part in a division being profitable shouldn't be able to share in those achievements being rewarded. A better working environment must have some sort of positive effects on staff otherwise people wouldn't bother making offices nice, so I don't see why it would be weird to incentivise making the work environment clean, secure, comfortable etc.
I agree, but this is the same behaviour that has driven companies since quarterly results became the norm. What's the number this quarter?
..and this would be a better way of doing it but RBS are in quite a unique situation where they need to make profit and turn that profit straight back into the bad bank side. Write downs are the best thing for them at this stage.
The retaining of key people is really my only real argument with regards to the bonuses. You'll agree that at the banking end it's not a job anyone can do and the right people are critical. As someone said earlier in the thread I think the 200%'ers are a small number.
There are two separate arguments going on simultaneously here. 1.) Should they get any bonuses 2.) Should they get bonus that exceed the EU cap.
This isn't just the banking side but the whole company. The guys in IT get a bonus, HR, projects, etc. They do have some excellent people and while they can (and will!) get a job elsewhere without the bonus that would be a disaster.
Does my heart bleed for these people? Not really. My concern is the recovery fails and we really do get stuffed with the bill for good.
Because the level of abstraction is absurd.
Cleaning staff are amongst the most under-appreciated and underpaid people in London and they should be treated and paid more fairly. No argument there. To suggest that their remuneration should somehow be linked to that of somebody doing a highly skilled job is daft.
I guess that's my sticking point with calling it a bonus. When I think of a bonus I see it as "yay, the company has done well, congratulations everyone", and I think everyone should get something. If you only want to pay it to your trading teams then just call it a salary.
I appreciate everyone plays their part, but surely the banker/sales guy etc has much more of an impact of profitability vs the cleaner?
A bonus is part of their salary that they get when they hit personal, measurable goals. Or at least it should be.
I agree, but this is the same behaviour that has driven companies since quarterly results became the norm. What's the number this quarter?
When you start using a Glengarry Glen Ross scene to justify your argument you lost me. Jesus Christ.
Well yeah, that's why they get paid a higher salary. I'm not saying take a number and split it equally between everyone, but if you're going down the road of a bonus for good performance then I think you should recognise that everyone has contributed to that in some way.
If you want to reward your income generating staff specifically then call it a salary and renegotiate the contract each year according to performance or however you want to deal with it.
That doesn't work. If you give them a flat salary like that, where is the incentive to close more business? The best approach is a base salary + bonus based on achieving personal objectives.
There are different types of bonus though. You have company bonuses and personal bonuses. Your company bonus should ideally be the same percentage/amount to everyone in the company*. Personal bonuses are for individuals achievements.
RBS is unlikely to be giving out company bonuses considering their huge loss, however there is no reason they shouldn't provide bonuses for those that did a really good job and helped them reduce their loss. Many people in this thread don't seem to understand the difference.
*This is what my company did this Christmas, including the receptionists.