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  #121  
Old 12.01.2011, 12:39
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Re: How about a limit on your bonus?

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You seem to be looking at this from the point of view that you'd like an extra 10% salary. That's great - go find a job where that's possible. But as has been clearly explained, bonuses with a proper incentive system are not any kind of problem.
I'll bite at this one, because you are wrong about the extra 10% salary. I actually took a massive paycut (40%) to do the job I am now doing because of the opportunities that may come out of it. The point is a fair salary and the possibility to earn a fair bonus.

From what I read on the posts it seems like 10% is not a realistic value and it should be unlimited, as long as it has been fairly earned. I do not have a problem with that point of view.
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  #122  
Old 12.01.2011, 12:43
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Re: How about a limit on your bonus?

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What I'm suprised at is that nobody so far has said that the bonus is a good thing because then it is fed back into the economy as school fees, new car, fancy apartment etc etc. In which case if it is salary or bonus doesn't actually matter, and it is better at least to be out in the open market and not stuffed in a corporate bank account.
Because Mr. Dougans salary translates into 8000 CHFs an HOUR - not a working hour, but each and every hour of the day. As I would him to expect very long hours a day and sleep from time to time, there is no bloody way he can feed this back into economy...

I think nobody is complaining that many people employed by profitable banks earn a bit more than others. I could not care less if they earn some hundred thousands more than me... but at the moment were managers have large two digit Millions a year, I do wonder if this can be seriously a payment for their personal work and achievements.
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  #123  
Old 12.01.2011, 12:47
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Re: How about a limit on your bonus?

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Because Mr. Dougans salary translates into 8000 CHFs an HOUR - not a working hour, but each and every hour of the day. As I would him to expect very long hours a day and sleep from time to time, there is no bloody way he can feed this back into economy...

I think nobody is complaining that many people employed by profitable banks earn a bit more than others. I could not care less if they earn some hundred thousands more than me... but at the moment were managers have large two digit Millions a year, I do wonder if this can be seriously a payment for their personal work and achievements.
I personally would be hard to justify 70 million CHF a year regardless of what I did, but that is just a personal viewpoint. I think 'enough' is enough and while 'enough' is different for different people I do think that 70 Million is 'more than enough' and probably 'repulsive'. To many people the fact that a person can earn such an amount does not make sense...
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  #124  
Old 12.01.2011, 12:58
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Re: How about a limit on your bonus?

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I personally would be hard to justify 70 million CHF a year regardless of what I did, but that is just a personal viewpoint. I think 'enough' is enough and while 'enough' is different for different people I do think that 70 Million is 'more than enough' and probably 'repulsive'. To many people the fact that a person can earn such an amount does not make sense...
i don't care that somebody makes 70m more than me a year. or even 10m a year more than me for kicking a football.

if i want the same, i can try for their job or realise they have skills that i don't.

i think this thread boils down to "i don't think people should get paid so much more money than me." and everything else just tries to rationalise this position.
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  #125  
Old 12.01.2011, 12:58
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Re: How about a limit on your bonus?

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I personally would be hard to justify 70 million CHF a year regardless of what I did, but that is just a personal viewpoint. I think 'enough' is enough and while 'enough' is different for different people I do think that 70 Million is 'more than enough' and probably 'repulsive'. To many people the fact that a person can earn such an amount does not make sense...
Wait wait wait. If I make 100 million for my bank, somebody's getting that money. Call it a bonus, a profit, a share dividend, a capital gain, whatever. I am the only one who actually did any work for it, so how much of it should I get? Well I have no idea, but why are shareholders more deserving of a cut than I am?
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  #126  
Old 12.01.2011, 13:03
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Re: How about a limit on your bonus?

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Wait wait wait. If I make 100 million for my bank, somebody's getting that money. Call it a bonus, a profit, a share dividend, a capital gain, whatever. I am the only one who actually did any work for it, so how much of it should I get? Well I have no idea, but why are shareholders more deserving of a cut than I am?
Who says that they are? Obviously if you make 100 million profit for your bank you are entitled to a salary that reflects that...and if you then lose 100 million the next year your salary should also reflect that.

What you are saying, and you may be right, is that banking can only work with the current system. I think it is fair to say so far that nobody has come up with a better alternative.
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  #127  
Old 12.01.2011, 13:06
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Re: How about a limit on your bonus?

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Who says that they are? Obviously if you make 100 million profit for your bank you are entitled to a salary that reflects that...and if you then lose 100 million the next year your salary should also reflect that.

What you are saying, and you may be right, is that banking can only work with the current system. I think it is fair to say so far that nobody has come up with a better alternative.
I'm sorry, a salary that is variable with your performance is called a bonus. Some people have a 100k basic salary but with the potential to make many millions in bonus. This means that yes, their fate rises and falls with their performance almost completely. But no, it's unfair to make them donate money to a loss making company - that's what shareholders are there for.
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  #128  
Old 12.01.2011, 13:11
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Re: How about a limit on your bonus?

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But no, it's unfair to make them donate money to a loss making company - that's what shareholders are there for.
I would agree but the shareholders of the banks got bailed out by the taxpayer. As was previously suggested (I think by you actually) they should have been left to fail.
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  #129  
Old 12.01.2011, 13:13
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Re: How about a limit on your bonus?

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i think this thread boils down to "i don't think people should get paid so much more money than me." and everything else just tries to rationalise this position.
No, I do not try to rationalize being jealous. I am not.

Unlike many do I fully understand why a footballer earns his money (or a pop star)... and I fully understand why good managers earn a lot of money. But my point is that a football club pays a market price for a player - this might seem a lot for an outsider, but in their business models does it make sense. What I am against are the not so open markets where some top level executives team up and get a seat in each others board - the gremium that should control the managers... - and then decide on their own payments. 70 Million is not the market price for a really good top level banker, it is the result of a fairly complex and intransparent bonus system. If it really would be all open and fair, the bank could easily argue "for 50 Mil we could get a guy who would bring x return, but for 70 Mil can we get one that brings more, so it is a reasonable investment..." but the truth is that they cannot. I do not care if people earn more or less than me, but I do care if it feels "unethical" for me. And frankly, some of the developments in the finncial sector of the past decade were extremly unethical for me. I am completely pissed off that the tax payers of many countries have to pay for the f ups of a few who at the same time decided to pay themselves huge salaries which remain mostly untouched.
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  #130  
Old 12.01.2011, 13:19
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Re: How about a limit on your bonus?

I would agree with Trev... that certainly from an outsiders point of view a lot of what has gone on recently has come across as 'unethical'. It would be interesting to see if it is an image problem and that from the inside it is actually ok.
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  #131  
Old 12.01.2011, 13:29
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Re: How about a limit on your bonus?

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If you have a high base salary you aren't encouraging people to overachieve - and make more money for the company. If you are paid 150k chf - and a bonus of 850k chf if you are a stellar performer - you're likely to work harder than if you get a 1m chf salary.
back in the days of socialism in Eastern Europe, almost everybody was overachieving, some by huge margins. That didn't prevent the economy from going tits up. If an above average number of people are over-achieving that sounds to me as if the bar is too low. Rewarding overachievment encourages people to concentrate soley on the indicators for which they are rewarded. Hence we have a bank system where the bonuses suggest that 99% of bankers must be far better than average, yet if you talk to the customers then you'll hear that 99% of bankers are seriously under performing and not providing satisfactory service.
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  #132  
Old 12.01.2011, 13:30
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Re: How about a limit on your bonus?

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Unlike many do I fully understand why a footballer earns his money (or a pop star)...
So do I, it's because there are too many suckers who pay their Billag fees and continue to watch TV depite complaining how rubbish it is.
That doesn't have much to do with bonuses however.
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  #133  
Old 12.01.2011, 13:35
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Re: How about a limit on your bonus?

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So do I, it's because there are too many suckers who pay their Billag fees and continue to watch TV depite complaining how rubbish it is.
That doesn't have much to do with bonuses however.
I guess with football a win bonus works of sorts, but then your bonus depends on the 10 other players also performing well. If the striker has a great game and the goalkeeper has a nightmare then nobody gets a bonus.
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  #134  
Old 12.01.2011, 13:39
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Re: How about a limit on your bonus?

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Wait wait wait. If I make 100 million for my bank, somebody's getting that money. Call it a bonus, a profit, a share dividend, a capital gain, whatever. I am the only one who actually did any work for it, so how much of it should I get? Well I have no idea, but why are shareholders more deserving of a cut than I am?
Because the shareholders own the bank and get to decide how it should be run. If they decide to sell all the assets and start grilling burgers instead, that is their perfectly good right. It's called the right to do with your own legally owned property as you see fit. Also, they ultimately carry the risk. If the bank goes bankrupt, they lose their value, you just lose a job.

If the gains you made were entirely your own work, the you wouldn't need to be in a bank to make those gains. You could set up your own or work as an independent advisor or consultant or whatever. But if being inside the bank makes you able to do that work better, it is because the bank (ie the sahreholders) do contribute value.
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  #135  
Old 12.01.2011, 13:39
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Re: How about a limit on your bonus?

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70 Million is not the market price for a really good top level banker
if it is not, then why not replace him with somebody who is cheaper?
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  #136  
Old 12.01.2011, 13:43
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Re: How about a limit on your bonus?

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if it is not, then why not replace him with somebody who is cheaper?
Off-topic somewhat, but if I earned 70 million last year then you would need to replace me. I'd be long gone....
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  #137  
Old 12.01.2011, 13:50
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Re: How about a limit on your bonus?

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It is called Socialism.
Socialism has some benefits though... like good cigars
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  #138  
Old 12.01.2011, 13:50
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Re: How about a limit on your bonus?

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Unlikely. Politicians are rather smarter than you give them credit for, and they know what happens if you scare all the high-earners out of your country - you have to increase taxes on the low-earners (assuming that the high-earners don't take their businesses with them).
An interesting point, but aren't elected politicians supposed to represent the people, so if the people want 'no bonus' then they get a 'no bonus' law. Or is it the role of a politician to do what is best for the country regardless of what the people say. i.e they know better...
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  #139  
Old 12.01.2011, 13:53
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Re: How about a limit on your bonus?

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An interesting point, but aren't elected politicians supposed to represent the people, so if the people want 'no bonus' then they get a 'no bonus' law. Or is it the role of a politician to do what is best for the country regardless of what the people say. i.e they know better...

any idea how much tax the gov take from all those bonuses??

(hint - a lot!!)
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  #140  
Old 12.01.2011, 14:00
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Re: How about a limit on your bonus?

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Off-topic somewhat, but if I earned 70 million last year then you would need to replace me. I'd be long gone....
oh i don't know. i'd probably would have spent it all by the end of the year and have to work another year
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