Really taking the pi55!

Discussion in 'Current Affairs' started by broadside, Dec 17, 2008.

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  1. As if it isn't bad enough that these financial high flying w*ankers have got us all into this current mess now they are getting bonuses!

    "City workers at a firm that benefited from the US bank bail-out are still to share in a multibillion-pound bonus pot, it has been confirmed.

    Goldman Sachs revealed the figure, worth about £55,000 per employee, as it posted its first quarterly loss since becoming a public company in 1999.

    A spokesman said the bonus pot, which will not be shared by the chief executive and six senior colleagues who have agreed to give up their perk, totalled £1.67 billion.

    The US-based firm, which switched from being an investment bank to a bank holding company in September, lost £1.36 billion in the final quarter of this year. "

    Full story

    It's enough to make you want to SCREAM!
  2. Ah, employment contracts, don't you just hate them :D

    If the individuals hit their performance targets then they're entitled to the cash, it's up to them if they want to refuse them or not and some firms have recently announced that staff have done it. The fact that the performance regime is part of the reason that they ended up where they are is largely irrelevant.

    There is probably a legal question around whether the public funds should have had further conditions applied and whether that would have been enforcable, but nobody here is a specialist in US employment law.
  3. The US has laws? I thought they just did what they wanted and bugger anybody else ... in fact that is EXACTLY what they do!

    But forgive my ignorance; if the company made a £1.36 billion loss in Q4 how does that fabulous performance justify a £1.67 billion bonus.

    To justify such a big handout it would seem that they must have made multi-squillions of dollars profit in Q1-Q3 so why the fcuk did they need baling out in the first place?

    Oh, I feel another headache coming on - I think I am going to go and have a lie down!!!!
  4. With respect I would suggest that a company which has a bonus structure that does not require the company to make a profit before payment is made has got something ever so slightly wrong with both it's employment contracts and morality.
  5. Well I just wish there was a way I could boycott Goldman Sachs as a show of protest ot this pile of bloody nonsense.

    Regrettably, I wouldn't know where to start.
  6. Well I certaily won't be allowing them to look after my overdraft, it's big enough as it is.
  7. It may depend on how the loss is structured, and how the funding for the bonus pot is accumulated. Since this is a US firm this is a little speculative, but essentially the accounting rules are resonably common. Bonus accrual commonly happens on a monthly basis, so that it's both tax effective and the cash flow is managed, once the bonus is accrued then any use of that is very restricted. Essentially once it's accrued then it can only be used for reward.

    As far as the objectives set up is concerned, it's likely that they were very unbalanced. The financial services industry has a reputation for being very short term oriented and I would say that it's likely that business development wasn't as high on the agenda as straightforward short term profit.

    It's also worth bearing in mind that under Chapter 11 legislation many US firms can run on a loss making basis for several years, so I wouldn't agree that profitability it needs to be a pre-requisite for bonus payment. Clearly Ch11 isn't the case in this instance, but it illustrates the point.

    As to the morality point, whose morality would you prefer; personally I'm not a fan of socialism, but I appreciate that others are.

    All that said, I do agree that it's probably inappropriate in the circumstances.
  8. I must admit that most of the companies that I have worked for have not paid bonuses at all, the one that did had two forms of scheme, one for very specific actions, ie delivering X units bu Y date, and the other that required the company to make a profit which was greater than the target.

    My brother works on the fringes of the financial industry and his bonus is very specific and relates to the profic earned in his office.

    I fear that the big city money guys seem to have made getting bomuses too easy and their scheme seem to be unrelated to company performance, as I understand it the Goldmine Sacks bonus payments this year will be equavalent to a significant proportion of the bail out cash supplied. Outwardly it would appear that the ******* who brought the organisation to it's knees are being given rewards with tax payers cash for their abject failure.

    And for the record the morality I am talking about has B**GER all to do with political labels rather just good old human decency, something that seems to have evaporated in this country under NuLabor and in the US under little Shrub.
  9. Mine is based on four aspects; utilisation, sales, service development and company management/ pro-bono.

    There has been quite a lot of discussion in the financial media recently about the imbalance and the encouragement of unresonably high risk taking. The financial services industry is already pushing back on regulatory advice that they need to address the culture and structure of their bonus regime, despite the fact that it's very clear that it was a big contributor to the meltdown. Not the only contributor, but certainly something that stimulated when it happened, rather than the fac tit happened.


    Human decency, heard of it but don't have much faith in the idea.
  10. (granny)

    (granny) Book Reviewer

    In the city I would assume that 'the best man for the job' was paid a salary that would ensure that he did his best for his company. In which case why is a Bonus necessary? I have heard many a comment from an employer stating the reasons for, what appeared to be, an exhorbitant salary was that they have to pay 'top' wages to get the best. Again.. why is a bonus deemed to be necessary? To me it seems plain and simple GREED!

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