Banks, Bailouts and Bonuses

[Gromit]

The banking bailouts cost us £850billion. We are paying for that with cuts to wages, jobs, services so we can make payments on the huge loads we had to get to save the banks.

Now it is reported that RBS, a bank we are the biggest shareholder in, plan to give itself a congratulatary slap on the bank to the tune of £500million in bonuses.

So the RBS must be doing really well you would think. Well no not really, they are heavily exposed to Eurozone loans and it may even need to be bailed out again.

http://www.ft.com/cms...6d2-00144feab49a.html

History repeats, some keep making the same mistakes.

Paying big bonuses is surely ill timed?

[sandyRoe]

I'm still of the opinion that if a few bankers had been paraded on tumbrils through the streets of the city to The Tower and there executed, it would have put all thoughts of bonuses from their colleagues minds.

[factor-fiction]

The link opens but I can't read the article as it requires me to register.
I don't know for certain but I imagine that many of the recipients are hard working junior staff who were certainly not responsible for the financial cris and have had to work harder as job cuts took effect.
Bonuses is an emotive word but they are an incentive to meet targets, and if staff meet the targets they should get them. For many staff the bonus is a key element of their salary that helps them scrape by.
But I agree that it is politically unacceptable to be seen to giving massive bonuses at the top, even though they may have met targets and done a great job in improving things. I suppose though that the government will get a lot of it back from income tax (and is there still a special bonus tax for bankers?)

In some ways banks can't win. Make a loss one quarter and everyone complains that they are inefficient and a drain on the tax payer. Make a healthy profit next quarter and people complain about the greedy banks.

[I.Don No]

bonuses for bankers? absolutely ill timed and ill deserved.

Just a thought.....but why should anyone get a bonus for doing the job they are already getting paid for??!!

[rojash]

"Make a loss one quarter and everyone complains that they are inefficient and a drain on the tax payer. Make a healthy profit next quarter and people complain about the greedy banks."

I don't think so: make a profit or a loss and pay yourself a massive bonus - that's why people complain about greedy bankers.

[DrFilth]

the inmates are running the asylum

[factor-fiction]

Just a thought.....but why should anyone get a bonus for doing the job they are already getting paid for??!!

Many private sector jobs (and some public sector ones) pay on the basis of a lower basic salary plus a bonus based on results. Incentive schemes ahve been around for years and must be considered by employers to be the best way to moivate employees.

I'm not saying the banks have got their schemes right- I'm just saying that in principle bonus type schemes will not go away.

[DrFilth]

the banks have the best one

make a big f*** up and the government will help us out
make a big profit and we will help ourselves out

[factor-fiction]

I realise that anything that looks as if it attempt to defend the bankers will be dismissed but I just want to put some perspective on this.
(1) Yes, I can see that paying bonuses is a bad move politically but if they are based on pre agreed targets it's hard to refuse to pay them. Okay teh targets may have been wrong and too easy- I don't know and I'm pretty sure others here don't know
(2) Bonuses don't just go to the fat cats that made a mess of things. The staff that work in the branches will get part of the pot too depending on their performance/results. These will be tens of thousands of people earning maybe £12000 a year who may get a few hundred pounds. Should they be denied a bonus too if they met their targets?
(3) Politicaly someone should intervene and carry out a review of whether bonuses at the top are too easy to achieve and demand that those at the top be sacked who fail to achieve targets
(4) Excessive bonus culture exists at the top in all organisaations. If we stop bonuses for bankers it may mean that they don't attract the best. Again people don't like it but it's probably true. It happens in football etc

[rov1100]

'One man's bonus is another persons paycut'

[stoofur]

Well said Factor!

[I.Don No]

how would I go about being made the head of a bank?

just wondered, cos I could save them a good deal of money. I could chuff up the whole system and and ask for only half the bonuses presently paid.

[tonywiltshire]

If the Banker’s contract of employment specifies when certain targets are met a bonus must be paid, the employer must either pay or face an Employment Tribunal, they rightly pay.