All in this together?

[eccles]

NorthernBoy said:

eccles said:

NorthernBoy said:

eccles said:

It's similar to bankers bonuses,there's nothing legally wrong with it, but morally you might think they'd have shown a bit more restraint.

How should that work, then? One bank takes the lead, and sees all of their staff decamp to someone else who sees it as a great opportunity to get staff in that they'd never otherwise get their hands on?

Banks pay the very minimum that they think that they can keep their staff for, but it turns out that their staff are very valuable, and the staff know this.

Given how limited the lifespan can be (and how much of the pay goes in tax, or is given in dodgy shares) do you really expect the staff to sit there and ignore the guy waving the million pound cheque when the current boss is offering only a firm handshake, and zero commitment to do anything different the following year?

The point I was trying to make was that, put in laymans terms, a company is on the brink of collapse, gets bailed out by the government, and instead of being a bit on the humble side and being greatful for still existing, it carries on with the lavish lifestyle it had before.
Whether it's legal or not isn't the point, it just doesn't look good.
Much the same point as the OP was making I think. We have these ministers urging restraint, making cuts left right and centre, people are feeling the squeeze as prices rise and disposable income goes down, and they're off jetting away on exotic holidays or having conspicuously lavish parties.
Legally nothing wrong with it, but morally it's not perhaps the best policy.

But pay levels ARE massively down from the pre-crisis years, and the people responsible for the damage are long gone.

You seem to be urging banks to underpay the remaining productive staff, to make some kind of point. If, for example, Barclays paid zero this year, do you not think that they'd be shooting themselves in the foot?

I'm not urging anything. I'm just saying paying loads of money in a bonus when your company has just been rescued with public money may not be morally the way to go.

[Rocksteadyeddie]

crankedup said:

Rocksteadyeddie said:

crankedup said:

The difference being 'stretching expenses within your own business' is open to scrutiny by the Tax Man. Its an attempt to pay less tax on earnings with the risk of prosecution.
Falsifying, allegedly, expenses paid directly from the public purse with no further scrutiny following approval is theft and abuse of public servant position.

David Chaytor might disagree with your assertion that there was no scrutiny of MPs' expenses, or risk of prosecution.

In other words there's very little difference.

Yes of course, fair point. My direction was more pre 2007 before the expenses scandal was revealed to the public. Being an M.P. then must have been very cosy indeed and this is the era to which I refer. Incidentally, the 3 former M.P'S + one Lord are up before the beak soon I believe?

The fundamental problem with MPs is that they didn't, and don't, pay themselves enough money for the job that they do. In part that is responsible for the generally woeful quality of those standing for, and being elected to, parliament. A backbencher currently gets £65,000 a year. Anyone worth their salt is likely to be able to earn significantly more than that elsewhere - including elsewhere in the public sector if the desire is "to serve". An MPs salary used to be formally linked to Civil Service pay. This link was changed in 1971 with the formation of the Senior Salaries Review Body. The key problem here was that they would make recommendations which MPs would then decide whether to adopt or not. MPs quickly realised that to be seen to be voting themselves pay rises would be political dynamite. So they didn't.

Expenses, wrongly, therefore became the means by which salary would be "topped up" after the formal link to civil service grading was dropped. It then became far easier politically to operate a lax and overly generous expenses policy, as this passed under the radar until the lid was lifted by the Telegraph following that tremendous piece of Blair legislation The Freedom of Information Act. So we ended up in an unacceptable cu-de-sac of (relatively) little pay, and lots of expenses - albeit of parliament's own making.

Parliament's response to this is to reform the expenses policy to make it more transparent etc etc. The fundamental issue though remains unresolved. What it requires is a clear assessment of what level MPs pay should be, and for those recommendations to be implemented without MPs having any say in it. This would probably result in a significant increase to MPs salaries and, IMHO, rightly so. A cabinet minister usually runs a department of thousands and thousands of people, with a budget measured in the billions of pounds. And they are paid about £130,000 a year. There is no other job in this country that carries anything like the power, influence, and responsibility (is there one?) and pays anything like this little. If we really want better government we need to attract better quality people. Pay is one element of this, but one which MPs are probably too short-sighted to resolve (again).

Edited by Rocksteadyeddie on Monday 3rd January 16:19

[eccles]

Rocksteadyeddie said:

crankedup said:

Rocksteadyeddie said:

crankedup said:

The difference being 'stretching expenses within your own business' is open to scrutiny by the Tax Man. Its an attempt to pay less tax on earnings with the risk of prosecution.
Falsifying, allegedly, expenses paid directly from the public purse with no further scrutiny following approval is theft and abuse of public servant position.

David Chaytor might disagree with your assertion that there was no scrutiny of MPs' expenses, or risk of prosecution.

In other words there's very little difference.

Yes of course, fair point. My direction was more pre 2007 before the expenses scandal was revealed to the public. Being an M.P. then must have been very cosy indeed and this is the era to which I refer. Incidentally, the 3 former M.P'S + one Lord are up before the beak soon I believe?

The fundamental problem with MPs is that they didn't, and don't, pay themselves enough money for the job that they do. In part that is responsible for the generally woeful quality of those standing for, and being elected to, parliament. A backbencher currently gets £65,000 a year. Anyone worth their salt is likely to be able to earn significantly more than that elsewhere - including elsewhere in the public sector if the desire is "to serve". An MPs salary used to be formally linked to Civil Service pay. This link was changed in 1971 with the formation of the Senior Salaries Review Body. The key problem here was that they would make recommendations which MPs would then decide whether to adopt or not. MPs quickly realised that to be seen to be voting themselves pay rises would be political dynamite. So they didn't.

Expenses, wrongly, therefore became the means by which salary would be "topped up" after the formal link to civil service grading was dropped. It then became far easier politically to operate a lax and overly generous expenses policy, as this passed under the radar until the lid was lifted by the Telegraph following that tremendous piece of Blair legislation The Freedom of Information Act]. So we ended up in an unacceptable cu-de-sac of (relatively) little pay, and lots of expenses - albeit of parliament's own making.

Parliament's response to this is to reform the expenses policy to make it more transparent etc etc. The fundamental issue though remains unresolved. What it requires is a clear assessment of what level MPs pay should be, and for those recommendations to be implemented without MPs having any say in it. This would probably result in a significant increase to MPs salaries and, IMHO, rightly so. A cabinet minister usually runs a department of thousands and thousands of people, with a budget measured in the billions of pounds. And they are paid about £130,000 a year. There is no other job in this country that carries anything like the power, influence, and responsibility (is there one?) and pays anything like this little. If we really want better government we need to attract better quality people. Pay is one element of this, but one which MPs are probably too short-sighted to resolve (again).

I'm sure there are quite a few MP's who would struggle in the real world and are in fact payed way beyond their ability or worth!

[Rocksteadyeddie]

eccles said:

I'm sure there are quite a few MP's who would struggle in the real world and are in fact payed way beyond their ability or worth!

Maybe even most

[NorthernBoy]

crankedup said:

[Its time that shareholders, especially the large Corporate holders of pension funds and the like, took a far more proactive roll in calling the shots when it comes to bonus payments and salary. For to long its all been very cosy and comforting for the top end Managers of the large Institutions to ride the wave. Now the wave has broken on the beach lets see some action for VFM.

When I joined my last bank, I increased my areas profits by a very large number of millions of pounds per year. When I left, they fell again. Do you honestly believe that the shareholders think that they are better off with me gone?

I took a few percent of what I made them. Is that not value for money?

[NorthernBoy]

eccles said:

I'm not urging anything. I'm just saying paying loads of money in a bonus when your company has just been rescued with public money may not be morally the way to go.

Not paying at least very close to the going rate will ruin the first bank to try, losing tens of thousands of people their jobs (many of whom are on unexceptional salaries). I don't agree with you that that is in any way the morally correct thing to do.

[crankedup]

Rocksteadyeddie said:

crankedup said:

Rocksteadyeddie said:

crankedup said:

The difference being 'stretching expenses within your own business' is open to scrutiny by the Tax Man. Its an attempt to pay less tax on earnings with the risk of prosecution.
Falsifying, allegedly, expenses paid directly from the public purse with no further scrutiny following approval is theft and abuse of public servant position.

David Chaytor might disagree with your assertion that there was no scrutiny of MPs' expenses, or risk of prosecution.

In other words there's very little difference.

Yes of course, fair point. My direction was more pre 2007 before the expenses scandal was revealed to the public. Being an M.P. then must have been very cosy indeed and this is the era to which I refer. Incidentally, the 3 former M.P'S + one Lord are up before the beak soon I believe?

The fundamental problem with MPs is that they didn't, and don't, pay themselves enough money for the job that they do. In part that is responsible for the generally woeful quality of those standing for, and being elected to, parliament. A backbencher currently gets £65,000 a year. Anyone worth their salt is likely to be able to earn significantly more than that elsewhere - including elsewhere in the public sector if the desire is "to serve". An MPs salary used to be formally linked to Civil Service pay. This link was changed in 1971 with the formation of the Senior Salaries Review Body. The key problem here was that they would make recommendations which MPs would then decide whether to adopt or not. MPs quickly realised that to be seen to be voting themselves pay rises would be political dynamite. So they didn't.

Expenses, wrongly, therefore became the means by which salary would be "topped up" after the formal link to civil service grading was dropped. It then became far easier politically to operate a lax and overly generous expenses policy, as this passed under the radar until the lid was lifted by the Telegraph following that tremendous piece of Blair legislation The Freedom of Information Act. So we ended up in an unacceptable cu-de-sac of (relatively) little pay, and lots of expenses - albeit of parliament's own making.

Parliament's response to this is to reform the expenses policy to make it more transparent etc etc. The fundamental issue though remains unresolved. What it requires is a clear assessment of what level MPs pay should be, and for those recommendations to be implemented without MPs having any say in it. This would probably result in a significant increase to MPs salaries and, IMHO, rightly so. A cabinet minister usually runs a department of thousands and thousands of people, with a budget measured in the billions of pounds. And they are paid about £130,000 a year. There is no other job in this country that carries anything like the power, influence, and responsibility (is there one?) and pays anything like this little. If we really want better government we need to attract better quality people. Pay is one element of this, but one which MPs are probably too short-sighted to resolve (again).

Edited by Rocksteadyeddie on Monday 3rd January 16:19

Completely agree 100%. But it will not exonerate those that have allegedly taken money from the public purse fraudulently. But again I do agree with your post in its entirety.

[eccles]

NorthernBoy said:

eccles said:

I'm not urging anything. I'm just saying paying loads of money in a bonus when your company has just been rescued with public money may not be morally the way to go.

Not paying at least very close to the going rate will ruin the first bank to try, losing tens of thousands of people their jobs (many of whom are on unexceptional salaries). I don't agree with you that that is in any way the morally correct thing to do.

So you're saying that if you worked at a business that nearly went to the wall and had to be bailed out with public money, you'd still expect the same remuneration package as before. You don't think it's reasonable to expect the whole business to cut back on it's overheads (including wages)?

[ATG]

eccles said:

NorthernBoy said:

eccles said:

I'm not urging anything. I'm just saying paying loads of money in a bonus when your company has just been rescued with public money may not be morally the way to go.

Not paying at least very close to the going rate will ruin the first bank to try, losing tens of thousands of people their jobs (many of whom are on unexceptional salaries). I don't agree with you that that is in any way the morally correct thing to do.

So you're saying that if you worked at a business that nearly went to the wall and had to be bailed out with public money, you'd still expect the same remuneration package as before. You don't think it's reasonable to expect the whole business to cut back on it's overheads (including wages)?

That isn't really the point. Having been bailed out, if you want the bank to stay in business, it has to keep hold of its better staff. If they don't get paid, they can and will leave.

[HundredthIdiot]

ATG said:

Having been bailed out, if you want the bank to stay in business, it has to keep hold of its better staff. If they don't get paid, they can and will leave.

Normal businesses in normal amounts of trouble would tend to constrain staff costs (including bonuses and pay rises) out of pure necessity, expect some staff to leave and deal with the consequences.

[CommanderJameson]

HundredthIdiot said:

ATG said:

Having been bailed out, if you want the bank to stay in business, it has to keep hold of its better staff. If they don't get paid, they can and will leave.

Normal businesses in normal amounts of trouble would tend to constrain staff costs (including bonuses and pay rises) out of pure necessity, expect some staff to leave and deal with the consequences.

I think we should have let some of the banks fail. Or forcibly broken them up. There should be no such thing as "too big to fail".

I understand the point being made by NB and ATG, but it raises the question of just how hard do the top-level decision-makers in an organisation have to fk up, before there are real negative consequences for them (rather than golden parachutes)?

[devil's advocate]To the man on the Clapham omnibus, the argument appears to go something like "I know it looks like we're keeping the bankers in 911s and Rolexes, but you see, it's completely necessary, otherwise they'll all leave", to which TMOTCO is just going to say "the last time I fked up badly at work, I got a P45."[/devil's advocate]

I dunno. It's conflicting me. On the one hand, I understand that the banks need good people to keep going. On the other, some of those good people didn't half cock things up, and their bosses who cry "Gordon took away the regulations" could, perhaps, done a spot of self-regulation.

This situation would have been a lot clearer had public money not been involved.

[ClaphamGT3]

I cant believe the Wail & their like; Osborne has gone on a moderately priced family ski holiday - just like hundreds of thousands of others will do this year, recession or no recession; where's the fricking story?!

[ATG]

The impression I've got is that the senior mgmt teams who steered their banks onto the rocks have mostly got binned. It depends on the bank and the business areas its involved in, but frankly at least half the time the staff you really need to worry about aren't the senior mgmt team ... you want to keep the investment bankers who actually get deals done, the sales staff who generate flow and the traders who don't blow up the balance sheet. There are lots of activities under the umbrella of "banking" and most tend to be simple, flat business processes involving pretty small numbers of people (there may be intellectually complex problems to solve, but the business models themselves are trivial). It's the guys working at the coal face who you need to keep, and in banking, it's those guys at the coal face who get extremely well paid on a pretty transparent performance basis. If you don't pay these people in proportion to the amount of money they can demonstrate they've made for the bank, they will get up and leave ... and they'll usually take their customers with them too, so you tend not to just lose staff, you lose market share straight to which ever rival institution hires your staff.