Lloyds takes back bonuses from 10 executives

[Halb]

http://www.bbc.co.uk/news/business-17094182

This is the first time a British bank has clawed back bonuses from executives, following a financial performance that was worse than expected.

The first time.

[singlecoil]

I expect banks will start making the initial bonus a lot higher, to allow for this sort of thing in the future.

[Halb]

anonymous said:

[redacted]

I guessed that from The clawback arrangements, which were demanded by regulators after the banking crisis of 2008, are being made after pressure from politicians and the Financial Services Authority.
Though it seemed strange that this wasn't there before, if the aim of the bonus is to reward good/great success, and not just having things ticking over.
So it won't change the society that seeks to reward regardless? Isn't that what we all dislike?

[Halb]

I'm not sure. I have had bonuses in the past (small 10-12% of wage) for department performance. This was for the previous year so it could be seen how everyone had done, not what would happen.
Isn't the issue over people possibly having difficulties over planning down to them seeing the bonus as theirs no matter what? I would think people in a volatile industry like this one would now expect that things are not going to be as they were.

How do bonuses work? They are given on criteria met? So that is in the past? But they can be clawed back from things that happen in the future?

[singlecoil]

anonymous said:

[redacted]

So basically it's

government idiots, bankers clever?

[Blue62]

It's not actually a clawback at all, they haven't yet received those bonuses so they will now actually receive a smaller amount than they were originally awarded. So £1.2m instead of £2m, or something like that. Just more headline grabbing from a discredited industry trying to convince us all that it's changing its ways.

[Mikeyboy]

Hmm,
I think that to describe this as a claw back due to bad performance of the bank is slightly wrong in thsi case. The Lloyds board took a decision to own up to a wrongdoing, these people received a bonus based in part upon the profits from the wrongdoing and so they forfeit their bonus.

Its not quite the same as being offered a £300k bonus working in the lending department and then having a third taken away because some muppet in the stockbroking department lost £12billion.

[crofty1984]

If this goes on, can anyone else see trouble down the line, if we keep fking the largest contributor to tax take and primary industry in the city up its arse?

Who would work for a place where a large portion of your take home pay was subject to the whims of the redtops?

The best people go elsewhere that pays market rate. foreign companies less likely to invest, etc...

[singlecoil]

crofty1984 said:

If this goes on, can anyone else see trouble down the line, if we keep fking the largest contributor to tax take and primary industry in the city up its arse?

Who would work for a place where a large portion of your take home pay was subject to the whims of the redtops?

The best people go elsewhere that pays market rate. foreign companies less likely to invest, etc...

Are they actually the best people, though? And are there really no others willing and able to take their places?

[Ozzie Osmond]

singlecoil said:

Are they actually the best people, though? And are there really no others willing and able to take their places?

Absolutely the right point to raise. These guys like to claim they are the financial equivalent of Michael Jackson - unique performers who cannot be replaced so deserve to be paid a fortune. But the City is entirely different, filled with little suits each of whom is easily replaceable.

[singlecoil]

Ozzie Osmond said:

singlecoil said:

Are they actually the best people, though? And are there really no others willing and able to take their places?

Absolutely the right point to raise. These guys like to claim they are the financial equivalent of Michael Jackson - unique performers who cannot be replaced so deserve to be paid a fortune. But the City is entirely different, filled with little suits each of whom is easily replaceable.

And every time when it seems that there is going to be some initiative to briong these people back to reality, we hear about how they are all going to move abroad in order to get buckets more money. Maybe they will, maybe they won't. Maybe they will, and then they will surf this forum waiting for opporunities to tell us how little tax they pay, how much money they make, the wonderful climate, blah, blah blah.

[roachcoach]

Ozzie Osmond said:

singlecoil said:

Are they actually the best people, though? And are there really no others willing and able to take their places?

Absolutely the right point to raise. These guys like to claim they are the financial equivalent of Michael Jackson - unique performers who cannot be replaced so deserve to be paid a fortune. But the City is entirely different, filled with little suits each of whom is easily replaceable.

You may be correct, but a corollary of that would be that companies are willingly paying over the odds for sub-par talent. I'd venture that if the job was as simple and as trivial as many (albeit hyperbolically) imply market forces/common sense on the part of companies would prevail.

In my experience, some anomalies aside, companies generally don't try to pay over the odds and they have found (look at various offshoring experimental disasters) that you indeed get what you pay for.


So, whilst the question should be asked, it is very likely to have more to it.

[singlecoil]

roachcoach said:

Ozzie Osmond said:

singlecoil said:

Are they actually the best people, though? And are there really no others willing and able to take their places?

Absolutely the right point to raise. These guys like to claim they are the financial equivalent of Michael Jackson - unique performers who cannot be replaced so deserve to be paid a fortune. But the City is entirely different, filled with little suits each of whom is easily replaceable.

You may be correct, but a corollary of that would be that companies are willingly paying over the odds for sub-par talent. I'd venture that if the job was as simple and as trivial as many (albeit hyperbolically) imply market forces/common sense on the part of companies would prevail.

In my experience, some anomalies aside, companies generally don't try to pay over the odds and they have found (look at various offshoring experimental disasters) that you indeed get what you pay for.


So, whilst the question should be asked, it is very likely to have more to it.

Of course no-one wants to pay more than they need to, theoretically. But who is it that sets these salaries? Could it be people who are part of the same industry/company? If it is, then those people have a vested interest in keeping all the salaries as high as they can get away with, because it is going to affect their own pay packet.

[roachcoach]

singlecoil said:

Of course no-one wants to pay more than they need to, theoretically. But who is it that sets these salaries? Could it be people who are part of the same industry/company? If it is, then those people have a vested interest in keeping all the salaries as high as they can get away with, because it is going to affect their own pay packet.

Quite possible, as I said it is a question meriting an answer, I just have an inkling that a lot of people might not like the answer.

There's an excellent chance it is out of kilter, but personally I doubt it could all be fired out to monkeys with no real impact.

[NorthernBoy]

anonymous said:

[redacted]

Even when they were not subject to clawback, I used to wonder how, precisely, handing me shares in the biggest bank in the world was meant to motivate me.

"OK, instead of £1m, I've got £1m of shares in the bank, because I'll somehow work harder if my shares mean that I retain 10.00001% of my efforts, not 10%?"

[NorthernBoy]

singlecoil said:

So basically it's

government idiots, bankers clever?

The banks take numerate graduates from the best universities, sit us in front of screens, and say "work out how to extract the most value from the world out there".

It's not surprising, after doing this for 60 hours per week for fifteen to twenty years, if we turn out to be quite good at extracting money from whatever situation we find ourselves in.

We were at university with the politicians, see them for drinks, and send them Christmas cards, but it'd be a sad day when they outmanoevered us in what we do best.

[NorthernBoy]

singlecoil said:

Are they actually the best people, though? And are there really no others willing and able to take their places?

As per the above, we've been doing it a long time, in a tough environment. You can't replace a guy who's been at the top for a decade with a kid straight out of college. Banks do not want to pay us a penny more than they have to, and would have already replaced us with cheaper labour if they could. It could be horribly, horribly expensive to try, and go through the inevitable losses, especially because the bright young talent that made it through would immediately be the subject of a bidding war once they'd proven their ability.

Or do you think that the impressionable young 23 year old would eschew the £1m that Goldman offered him to move?

[Bing o]

NorthernBoy said:

We were at university with the politicians, see them for drinks, and send them Christmas cards, but it'd be a sad day when they outmanoevered us in what we do best.

Well both sets have seemed adept at spunking money up against the wall, and fking off into the sunset with gold plated pensions leaving the man in the street penniless.

The sooner the banking industry clears out all of the prop desks and gets back to facilitating the real economic activity of helping businesses grow the better.

[DSM2]

NorthernBoy said:

The banks take numerate graduates from the best universities, sit us in front of screens, and say "work out how to extract the most value from the world out there".

It's not surprising, after doing this for 60 hours per week for fifteen to twenty years, if we turn out to be quite good at extracting money from whatever situation we find ourselves in.

We were at university with the politicians, see them for drinks, and send them Christmas cards, but it'd be a sad day when they outmanoevered us in what we do best.

Having spent the past few weeks travelling through the Far East and Australasia and seen the almost universal resentment building against the overpaid and feckless banking and financial businesses everywhere, I would say its not the politicians you should be worried about.

[Mikeyboy]

NorthernBoy said:

Even when they were not subject to clawback, I used to wonder how, precisely, handing me shares in the biggest bank in the world was meant to motivate me.

"OK, instead of £1m, I've got £1m of shares in the bank, because I'll somehow work harder if my shares mean that I retain 10.00001% of my efforts, not 10%?"

Ahem, most people don't retain any proportion of their efforts. Always worth rememebring that before you complain about the bonus that you get on top of a higher than average basic salary.

This Northern boy is why the banking community get a remarkably bad press that isn't going away. Mainly due to comments that seem to imply that you have an entitlement to a higher income and not working out over the last few tough years that in fact no-one does.
Be thankful for your lucky position and keep it under your hat that your very high income isn't quite what you were hoping for.
There are plenty of people who chose to be civil engineers for example with as many brains as you who will NEVER be paid as much as you imply you are entitled to and yet run multi million pound infrastructure projects which probably make your VAR limits pale into insignificance.

Shares go up as well as down. Hopefully your allocation of the world's biggest bank will go up for you its better than nothing after all.