bankers bonuses

scorza · 11 Jan 2011 at 15:31

mangobreeder said:
Fail Try again.

Good to see the current crop of investment bankers have a sound understanding of the financial crisis so we definitely won't repeat the mistakes of the past :rolleyes:

What do you think happens to a business when all substantial businesses that owe it money go bankrupt? What happens to your precious bonuses then?

Danthus · 11 Jan 2011 at 15:32

scorza said:
Good to see the current crop of investment bankers have a sound understanding of the financial crisis so we definitely won't repeat the mistakes of the past

What do you think happens to a business when all substantial businesses that owe it money go bankrupt? What happens to your precious bonuses then?

All though none of that has anything to do with your inaccurate statement that all banks were bailed out.

scorza · 11 Jan 2011 at 15:32

EdwardTeach said:
Far too much fuss is made about the bonuses. Mostly driven by jealousy I believe.

The treasury is massively dependent tax revenues generated by the city. If we drive then banks away we will all have to pay more tax and get less in return.

We have to pay more tax now, and are getting less in return.

scorza · 11 Jan 2011 at 15:36

OldCoals said:
All though none of that has anything to do with your inaccurate statement that all banks were bailed out.

Of course it does, in a free market no banks would have been bailed out, and the entire banking industry would have failed. By bailing out the worst banks, world governments ensured that other banks remained viable that otherwise would have failed. What's that if not a bailout? Zavvi would still be trading if Woolworths hadn't gone into bankruptcy, a government bailout for Woolworths would have been a bailout for Zavvi too.

mangobreeder · 11 Jan 2011 at 15:40

scorza said:
Good to see the current crop of investment bankers have a sound understanding of the financial crisis

i'm a tax lawyer not a investment banker

I just happen to work for an investment bank.

So even though I have no involvement at all with Sub Prime investments, I have to suffer?

You seem to forget, that the financial crisis was caused mainly in part by the fixed income department, not the other departments such as FX, Treasury, Settlements. Corporate actions. Etc etc.

why should all those people not receive their bonus?

ntg · 11 Jan 2011 at 15:43

scorza said:
We have to pay more tax now, and are getting less in return.

That's because of the previous governments' overspending, not due to bank bail outs. 1 trillion of debt was not caused by bail outs.

Pestilence · 11 Jan 2011 at 15:45

mangobreeder said:
exactly, but i do have targets to meet, i cant just sit back and expect it.

Hell of a nice bonus opportunity! If targets are met, of course.

Stretch · 11 Jan 2011 at 15:48

I think banks should be able to pay their staff what they please on two conditions.

1) They no longer rely on public money for their survival. Any money borrowed is paid back in full with intrest.

2) They don’t use current/savings account deposits to make less that gilt-edged investments on the banks behalf. If they want to use people’s money for this purpose make it clear to them and offer them a better rate of return on their money.

3) They don'y lend money to stupid people in America

cm1179 · 11 Jan 2011 at 15:50

kgi said:
OP, what do you propose banks do with their profits then?

err pay better interest rates?

Xordium · 11 Jan 2011 at 15:51

It's not quite so black and white though is it at the end of the day. I think you would have to be quite churlish to suggest that someone who makes money does not deserve some reward for their efforts however the sums that are being given seem quite immoral in the current world climate. Well in my eyes they do. It is quite clear the government pre and post election tried to be seen to do something and basically got told to **** off. It's not an issue of happening but an issue of scale.

But if people really do not agree with the bonuses then vote with your hard earned and do not invest it in banks that demonstrate such practices. But people do not because they want the service the banks provide and the investment they return. It's not like the bankers are the only ones holding a gun to the governments head on specific issue - several unions employ such tactics time and time again. If you have the power use it seems to be the message. And why not - it would be great if society were totally altruistic but I think no-one is under any illusions it is so why the shock or the disgust. Play the game yourself.

[TW]Fox · 11 Jan 2011 at 15:55

Not this again. The politics of envy at play here are sickening.

The bankers get enormous bonuses because they are contractually obliged to receive them. They signed an employment contract which awards a proportion of the pay they receive based on performance. They deliver this performance, they receive the performance related pay, or bonus. It really is THAT simple.

They are PRIVATE companies and can thus do as they please.

The banks don't make money out of providing you and me with a current account or selling is pittifully tiny personal loan. They make money by investing funds in markets. THIS is what keeps a bank going and to make significant amounts of money requires the very best skilled staff. Therefore to attract these staff you offer a renumeration package which rewards them for performance - remember, the only reason to pay these particular staff a large bonus is because they have generated a large profit for the bank.

Also can people who cry about the bank bailout go away and learn what actually happened? The government didn't give the banks free money, it exchanged cash for shares in the bank. Shares which have VALUE, value which one day will EXCEED the amount the government invested in the banks, and be sold on the stock market.

The only law we need is one preventing people who have no idea what they are talking about holding strong opinions on a subject, this goes as much for the press as anyone else.

Efour · 11 Jan 2011 at 15:59

Why dont we nationalise all the Banks in the UK, earn trillions of pounds then sell them back to whoever wanted them to start with?

im joking btw.

Im quite sick of the media reporting it

mangobreeder · 11 Jan 2011 at 15:59

[TW]Fox;18201043 said:
<snip>

even though it pains me to say it.

fox is talking sense

toshj · 11 Jan 2011 at 16:23

[TW]Fox;18201043 said:
Not this again. The politics of envy at play here are sickening.

The bankers get enormous bonuses because they are contractually obliged to receive them. They signed an employment contract which awards a proportion of the pay they receive based on performance. They deliver this performance, they receive the performance related pay, or bonus. It really is THAT simple.

generally this point isn't accurate. a small number of individuals that have been able to secure guaranteed bonuses by way of moving bank or accepting a counter-offer from their current bank which includes a guaranteed bonus element - these guys will have it written into their contract. this may ultimately make up less than 5% of investment bankers in London.

a number of revenue producing individuals will have their bonus figure "hinted at" by senior managers, but very little is guaranteed in the contract - in case the bank suffers and then have to pay our guaranteed bonuses which it can't afford.

chriscubed · 11 Jan 2011 at 16:37

Such a cliche thing to be talking about. Bankers bonuses aren't going anywhere.

Having said that, if I read one more time that all the bankers will leave RBS and work for other banks because they use a fixed salary rather than a bonus scheme, I may cry a little.

Since when are there infinite jobs and a small workforce available to fill them guys? Only last time I looked, there was a lot of people looking for office jobs which pay well, and not a lot of jobs going. Still an employer's market for anything but absolute top end employees IMO.

Doodlebug12 · 11 Jan 2011 at 16:38

Goksly said:
The people to blame aren't the bankers who are making the money, it's the people who drew up their contracts basically encouraging profit no matter what the risk.

Well said

Barks · 11 Jan 2011 at 16:40

Most people don't have a clue what they're talking about when it comes to this topic.

Hatred for bankers is reflective of irrational, uneducated views which stem from nothing more than jealousy, a lacking of rational economic foresight and, typically, the negligence or denial of actions which lead to improved universal welfare in favour of bigotry and political ideology.

These people are talented and work extremely hard, leave them alone. They already pay astronomical sums in tax as it is. Numerous Economists, academics and intellects have repeated time and time again that intervening in this market too much will make everyone far worse off, even if the sector does not turn out to have the mobility argument 'they'll just leave' people are claiming.

franco_22 · 11 Jan 2011 at 16:48

the funny thing is. Banks pay out huge bonuses to keep their "talent", the exact talent that got us all in this mess. Oh the irony :rolleyes:

flibbage0 · 11 Jan 2011 at 16:54

I think bankers should still get bonuses but there should be a limit and they should wait till they see the investment actually working out.

toshj · 11 Jan 2011 at 16:55

franco_22 said:
the funny thing is. Banks pay out huge bonuses to keep their "talent", the exact talent that got us all in this mess. Oh the irony

so how has an equity derivatives salesperson at a bank who has generated $30mn + over the last three years (since the crisis began) got "us all in this mess".