Lee54 Posted October 18, 2008 Share Posted October 18, 2008 After all the crap and rescue packages that the Governments have put together, it has been announced this morning that the Bankers are to get their bonuses this year. Wall Street claim that bankers in the US will receive £70 billion at the end of this year and the Bank of England claim that £16billion will be handed out in bonuses. It seems that the Bankers have found a loop hole in the system, they will not receive the bonus in cash as in previous years but as shares. This could once again create a false value to the shares at a later date when the money men start to deal in them, which could result in further problems for the credit industry. Link to comment Share on other sites More sharing options...
TerryMcCann Posted October 18, 2008 Share Posted October 18, 2008 You are so copycat Link to comment Share on other sites More sharing options...
When Skies Are Grey Posted October 18, 2008 Share Posted October 18, 2008 Wow you are a financial genius.......because of course ALL banks are in difficulty arent they..... and I agree with Tezza.... Link to comment Share on other sites More sharing options...
Sebrof Posted October 18, 2008 Share Posted October 18, 2008 After all the crap and rescue packages that the Governments have put together, it has been announced this morning that the Bankers are to get their bonuses this year. Wall Street claim that bankers in the US will receive £70 billion at the end of this year and the Bank of England claim that £16billion will be handed out in bonuses. It seems that the Bankers have found a loop hole in the system, they will not receive the bonus in cash as in previous years but as shares. This could once again create a false value to the shares at a later date when the money men start to deal in them, which could result in further problems for the credit industry. Lee, there must be some subject on which you are, if not an expert, at least reasonably knowledgeable. We'd love to hear your views on that. But meanwhile, we have to work with what we've got. The fact that a few bankers will get bonuses is not altogether surprising. The fact that some of them will be paid in shares, not cash, or partly in shares, is not new, and is NOT a loophole. It is in fact good news, especially if the beneficiaries are obliged to hold the shares for two or three years, which is quite common. If so, they will have a far greater incentive to think of the company's best medium-term interests, rather than their own short-term ones. S Link to comment Share on other sites More sharing options...
Lee54 Posted October 18, 2008 Author Share Posted October 18, 2008 After all the crap and rescue packages that the Governments have put together, it has been announced this morning that the Bankers are to get their bonuses this year. Wall Street claim that bankers in the US will receive £70 billion at the end of this year and the Bank of England claim that £16billion will be handed out in bonuses. It seems that the Bankers have found a loop hole in the system, they will not receive the bonus in cash as in previous years but as shares. This could once again create a false value to the shares at a later date when the money men start to deal in them, which could result in further problems for the credit industry. Lee, there must be some subject on which you are, if not an expert, at least reasonably knowledgeable. We'd love to hear your views on that. But meanwhile, we have to work with what we've got. The fact that a few bankers will get bonuses is not altogether surprising. The fact that some of them will be paid in shares, not cash, or partly in shares, is not new, and is NOT a loophole. It is in fact good news, especially if the beneficiaries are obliged to hold the shares for two or three years, which is quite common. If so, they will have a far greater incentive to think of the company's best medium-term interests, rather than their own short-term ones. S Maybe if you got your arse out of bed early and watched this mornings business news on BBC you would have heard that most of the bonuses are being paid out within the Banks that Governments have bailed out. Top economists that were interviewed during the program, all agreed it was a kick in the teeth for tax payers on both sides of the world. http://www.guardian.co.uk/business/2008/oc...alaries-banking Link to comment Share on other sites More sharing options...
Sebrof Posted October 18, 2008 Share Posted October 18, 2008 After all the crap and rescue packages that the Governments have put together, it has been announced this morning that the Bankers are to get their bonuses this year. Wall Street claim that bankers in the US will receive £70 billion at the end of this year and the Bank of England claim that £16billion will be handed out in bonuses. It seems that the Bankers have found a loop hole in the system, they will not receive the bonus in cash as in previous years but as shares. This could once again create a false value to the shares at a later date when the money men start to deal in them, which could result in further problems for the credit industry. Lee, there must be some subject on which you are, if not an expert, at least reasonably knowledgeable. We'd love to hear your views on that. But meanwhile, we have to work with what we've got. The fact that a few bankers will get bonuses is not altogether surprising. The fact that some of them will be paid in shares, not cash, or partly in shares, is not new, and is NOT a loophole. It is in fact good news, especially if the beneficiaries are obliged to hold the shares for two or three years, which is quite common. If so, they will have a far greater incentive to think of the company's best medium-term interests, rather than their own short-term ones. S Maybe if you got your arse out of bed early and watched this mornings business news on BBC you would have heard that most of the bonuses are being paid out within the Banks that Governments have bailed out. Top economists that were interviewed during the program, all agreed it was a kick in the teeth for tax payers on both sides of the world. http://www.guardian.co.uk/business/2008/oc...alaries-banking And maybe if you were better informed, you would know that these bonuses are a contractual liability of the banks, and cannot be avoided. Do you honestly think they are discretionary? S Link to comment Share on other sites More sharing options...
keyboarder Posted October 18, 2008 Share Posted October 18, 2008 Sounds like a loophole to me........ Link to comment Share on other sites More sharing options...
Sebrof Posted October 18, 2008 Share Posted October 18, 2008 Sounds like a loophole to me........ Well, I have just read the Grauniad (an impeccable source), and it says some (US ones) are discretionary. If true, I think we can expect to see some writs flying. S Link to comment Share on other sites More sharing options...
manxy Posted October 18, 2008 Share Posted October 18, 2008 Sounds like a loophole to me........ I agree and IMO, it seems that the fat twats cats are once again slurping the cream off the top Link to comment Share on other sites More sharing options...
ai_Droid Posted October 18, 2008 Share Posted October 18, 2008 Seems a bit early to be bleating about this. The worst of this crisis is over the last few weeks, any bonuses currently paid will have been agreed months ago. I'll bet bonuses are significantly reduced this time next year. Link to comment Share on other sites More sharing options...
Chinahand Posted October 18, 2008 Share Posted October 18, 2008 I'm not sure what to say about all this - Goldman Sachs made $4.3 Billion profit so far this year. It is a brutally aggressive bank - Goldman Sacks as some friends call it. But it pays for results. If its made these sort of profits it'll be paying out big bonuses for those who helped create this money. Some parts of the organization are failing, others succeeding - if you work in a failing department, your job is on the line; if you work in a profitable department you'll get rewarded. These are huge diverse organizations which make their profits from thousands of different sources - its to me too simplistic to simply say its all fat cats. Link to comment Share on other sites More sharing options...
manshimajin Posted October 18, 2008 Share Posted October 18, 2008 Whilst it is said that the banks are contractually obliged to pay the bonuses I recall in the past that most bonuses came with several overrides - firstly of course meeting stretching performance targets (hopefully with quality standards built in as one of the measures), then a breakdown into the amount that was individual performance and the amount that was paid according to company performance and then a let-out clause called 'capacity to pay'. If the banks believe that they have the capacity to pay bonuses (albeit in shares) are they also saying that they have the capacity to pay shareholder dividends too? Would the shares be bought on market or would they be additionally created shares - which would be a further dilution at a time when shareholder value has already fallen enormously in most US and UK banks? If it is the former where do the banks get the money from to buy them? Rather than cash or shares would it be a better to issue options exercisable in 5 years time subject to still being employed by the bank and the bank itself having met some challenging targets by that time including profitability, level of bad debt provisions, acceptability of lending risk profile, repayment of taxpayer capital and rebuilding of shareholder value? At least that way the PR is that the bonuses will only be worth something if there is a major recovery in 5 year's time. Paying in shares is giving an asset that has a cash value today. At the least it is awful public relations by the banks involved. It gives the impression that they do not understand the current public anger at what has happened. If payments are 'discretionary' it would seem sensible not to pay bonuses this year. If they are contractual they should see if the contracts include a clause on capacity to pay. Link to comment Share on other sites More sharing options...
immortalpuppet Posted October 18, 2008 Share Posted October 18, 2008 Seems a bit early to be bleating about this. The worst of this crisis is over the last few weeks, any bonuses currently paid will have been agreed months ago. I'll bet bonuses are significantly reduced this time next year. Thats what i thought. Link to comment Share on other sites More sharing options...
Lee54 Posted October 18, 2008 Author Share Posted October 18, 2008 http://www.independent.co.uk/news/uk/home-...nza-965445.html Link to comment Share on other sites More sharing options...
Sebrof Posted October 18, 2008 Share Posted October 18, 2008 http://www.independent.co.uk/news/uk/home-...nza-965445.html Thank you for the link, Lee. If you read it carefully, you will see that the bonuses relate to the year to April 2008, before the meltdown that occurred in September when Lehman collapsed. Up until that time, many banks were actually doing quite well, and many staff would have earned bonuses. As others have said, it may be a different matter in the year to April 2009. S Link to comment Share on other sites More sharing options...
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