jonc

It's that time of year again when bankers' bonuses are back in the headlines and again we see the Government using this time have another pop at the bankers for political point scoring. There have already been reforms in banking sector when it comes to remuneration and bonuses with claw back powers and a move to equity instead of 'cash'. Yet the Government want to see yet more legislation to curb bonuses further. Only a minute 'elite' bankers get paid the huge bonuses that make headline news, but there are many many more in the banking sector that are paid a modest salary and rely on bonuses to make up their income. Let's not forget that the financial sector accounts for 10% of UK's GDP. There is a real possibility that to keep legislating the UK finance sector to the point it becomes uncompetitive, the UK could see a decline with nothing to fill the gap left behind.

Dingdongler

I don't think all politicians are adopting this approach.

RA Dunk

Like everything else our giant Leech of a Government will suck it dry till it's on it's knees and can give no more, saying that I have little sympathy for Banks/Bankers at the best of times.

jonc

I know a colleague who works at RBS as a research analyst and Cameron has seen fit to limit his cash bonuses to £2000 second year in a row and he's had no pay rise since 2007. Cameron has now announce there will be no rise in salary or bonus for the foreseeable future. He's not millionaire banker and is on a modest salary and works 7 to 7 most days.

Meanwhile, politicians get their 11% pay rise!

tony de wonderful

Presumably you weren't moaning when government intervened to save your sorry industry?

jonc

Presumably you got yourself a nice cheap mortgage deal for your pending property purchase?

paulr

I won't be losing sleep over it.

jonc

Still looking for clever ways to take advantage of the 0% credit cards?

madscoob

iTrader: (3)

is rbs actually making a profit now then ?

paulr

Nope. Just pay it off each month.

Geezer

The £2000 limit only applies to cash and the first tranche. The rest of the bonus is paid in shares later in the year (subject to claw back, but that has not happened since it was brought in), so bonuses are not capped in reality. It's potentially better for staff as they can elect to sell the shares straight away and take the cash (which makes mockery of the £2000 limit) or elect to hold on to the shares and watch their value rise (usually).

Donnie Brasco 46

iTrader: (2)

Spoken like a true banker lol

We are enjoying low interest rates on mortgages, but it's not thanks to bankers talents, more their stupidity. Rates are low to promote spending due to the banking crisis.

BULLITT

Bonuses are supposed to be a reward for success, why should bankers, or anyone for that matter be awarded a bonus when the company they work for fails and requires financial help. That isn't success IMO. If I don't hit the performance targets in my job I don't get a bonus.

f1_fan

iTrader: (9)

To an extent I agree with you that it is just political point scoring on behalf of the government and of course Labour who keep telling us what they would do if they were in power.

The problem is the banks keep shooting themselves in the foot with one scandal appearing after another and while these may not be remotely linked to the people receiving said bonuses (or certainly not all of them) the politicians and the media make the connection repeatedly so the public perception of them is rock bottom!

They deserve some of it, but the polictical point scoring is far more sickening I grant you!

ditchmyster

iTrader: (7)

Out of curiosity what is this colleagues salary? ball park figure.

hodgy0_2

"Modest" salary

ditchmyster

iTrader: (7)

Henrik

iTrader: (5)

From what I can gather, a large part of "normal" IT infrastructure jobs in banking (not talking managerial positions) pay from about 40 - 65k depending on what area you're in. If you specialise in say front office app support, you'll be on anything up to 80k usually (there are exceptions, of course).

Non-IT jobs depend heavily on what kind of job you're doing, but normal back office jobs (settlements etc etc) are not paid anywhere near a lot. A lot of people in hedge funds that are on about 35k-45k for these kind of roles.

The closer you get to where the action is (front office), the better your salary will be, generally. On the other hand, it seems like your job is more volatile as well, so there's a bit of risk premium.

Bonuses for normal grunts, I'd say range between 5 and 15-20% of base salary, depending on how your company has done, and if you've hit your targets etc.

jonc

Depending on where you are, not everyone gets the shares as part of their bonus package. There is a SAYE that you can join where you buy shares at the option price at the end of the term in 3 years time, which sounds great bit their share price isn't exactly doing great. With the political parties (mainly Milliband) talking about breaking up the bank if he gets in to power (god help us then!) share price is only going to go down I afraid.

jonc

It's safe to say that the majority of those who've never worked in the finance sector don't have a true grasp of how the banking sector works.

jonc

What do you think he earns and what do you think he should earn?

jonc

What is sickening is that it is usually just the few 1% at the top in the banking industry that is giving everyone else in the whole of this sector a bad name.

romford-boy

+1,000


But it's no surprise given most are taught arts and crafts at school, rather than economics.

Why the left see splitting banks up as a good idea is beyond me. UK banks form some of the country's largest tenants, and employers....so we benefit from their income from rents/rates/salaries. And seeing as retail banking as a tough business with tiny margins they will begin to shun poorer customers in favour of the higher risk investment banking and medium to high net worth customers.

Some argue that newer banks will increase competitiveness......but new players to the industry have much small capital ratios, so are higher risk, therefore the cost of a new bank borrowing money to lend to Joe public will be higher - great so there are now more options of who to bank with, but it certainly won't be cheaper.

hodgy0_2

Quite a substantial number of, mostly working Joe's have to rely on payday loans

And that is not cheap

I suspect that number will increase

ditchmyster

iTrader: (7)

I have absolutely no idea, which is why I asked the question to get an idea of whether or not your dismay was justified, also depends where he is living and working.

Outside london I would say £25/30k is a very good salary for an office worker, if your inside london then plus £15k.

If he's on anymore than that for pushing paper with no "special skills" I don't really have any sympathy.

But I will admit I know nothing about pay scales in any industry as I haven't worked for anyone for some time now, self employed for 4yrs and managed about a year in a top 100 before I decided i'd had enough and went my own way again which was 8yrs ago.

Dingdongler

As always the truth lies somewhere in the middle.

Can 'excessive bonuses' encourage risk taking behaviour that could potentially bankrupt a country? Yes

Have major banks across the globe participated in such activities? Yes

Should we have legislation to protect us from this happening? Yes

Are politicians using the issue for political point scoring and feeding the public appetite for banker bashing? Yes of course, they behave like that on many issues.

Did I do arts and crafts at school? No

jonc

Well you're not far off, well under £40k and in, what I consider, a job requiring "special skills".

jonc

I agree the "excessive bonuses" were out of line and with it the risks taken. But that was over 5 years ago and the pay and bonuses in this sector have seen reforms to the "bonus culture" to the curb excessive risk taking. Only a very few get the big bonus and generally it is in line with how much business and revenue they generate, not just for the UK but globally. Like I've said in the past, if politicians keep trying to dictate how the banking is run the UK, these top level bankers will leave, as I have seen, and move to US banks who are generally doing a lot better and as a result pay a more competitive package. And here's the problem, the Government can only legislate for the UK, potentially making the finance sector in the UK less competitive to operate in a global industry.

jonc

Breaking up of the banks to separate the retail from the wholesale side might seem a good idea to protect the consumer from the "risk taking" investment side it will end up bad for the consumer. If you take away and separate the massive revenue stream from the wholesale side, the retail side will find it more difficult to offer such facilities that consumers currently take for granted, such as free banking, attractive mortgage deals, free overdrafts etc. I'm not saying it will happen, but chances are more likely than not IMO. Also if Milliband gets his way by forcing the main banks to sell off a large number of their branches to make way for these "challenger banks", are these challenger banks really going to replace them on the high street? I would say only in very limited numbers since most people do their banking online.

ditchmyster

iTrader: (7)

So £30K+ I don't see what he has to complain about £2k bonus + shares, just because he works with money doesn't mean he should get loads or a % of it, if that was the case we would have petrol station cashiers on £100k then your mate would want £500k.

As an employer once said to me, "if your not happy with your pay and conditions, seek alternative employment" his face was a picture when I handed my notice in the following week.

One thing I have learnt is, we are all masters of our own destiny to allow someone else to control it will mean your on a hiding to nothing.

Being an employee is a mugs game, you will always march to the beat of someone else's drum.