Kwarteng removing bonus caps

Top trolling from the frothers to start their 2 year limited run in the West End. 

Next week - poll tax for Scotland.

good idea tbf

ridiculous incursion on the ability of private businesses to run themselves as they judge best

uncapped bonuses didn’t cause the GFC; imposing the cap was just political vindictiveness demanded by the electorate 

what real caused the GFC was a sudden and completely irrational loss of confidence. Animal spirits. Actual default rates even on the flakiest mortgage-backed securities and the subprimiest mortgages never reached levels to even vaguely justify the market convulsions, especially not in europe. 

If you were going to pin the GFC on a structural market feature, the originate2distribute model would be a much more accurate mark than bonuses

Sir Woke XR Remainer FBPE MBE15 Sep 22 09:30

good idea tbf

ridiculous incursion on the ability of private businesses to run themselves as they judge best

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As I recall this was imposed so that the billions of tax payer cash injected to stop the banks toppling over didn't immediately get paid out to the people who let the banks fall over

seems fairly in line with capitalist doctrine that funding comes with covenants 

In other news, no-one formerly at HBOS is to face any sanction for what happened at the bank pre-bail out. By all means give bankers the big bonuses but hold them to account when they are identified as at fault.

As I recall this was imposed so that the billions of tax payer cash injected to stop the banks toppling over didn't immediately get paid out to the people who let the banks fall over
 

didn’t these people just get paid in salary instead though

New Chimp_15 Sep 22 09:55

didn’t these people just get paid in salary instead though

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I'm not into the detail of the work arounds for this, I was under the impression that reduced business, corporate belt tightening and automation made half of these trader type guys redundant 

Laz unlimited bonuses mean too many risks are taken because the upside or a risk increases dramatically but the downside, getting the sack, remain constant.

It was more in the realms of in this together/cost of living crisis which is the Tories' best attempt at a value system. TBF give them the bonuses just tax them with no escape route @45% and start taxing capital gains inc. primary residences at top marginal rates. 

Default rates might not have been that high,but as Mark Baum says in The Big Short, dog shit wrapped in cat shit was being sold as AAA.

The issue isn't quantum of bonuses, it's how much of them are paid in the immediate term as opposed to contingent on 2-3-4 year performance.

No the issue is that the people that get them likely don't pay tax on them in the proportion a bus driver getting £500 at Christmas does. This is special pleading BS from a bunch of dickheads trying to leverage the govt pushing us into an economic hole. What would prob help the City is free access to the huge market on its doorstep. Is this available somehow? 

I’d like to watch a reality tv show where one of these speccy nerdy investment banker bros tries to survive for even one day on a desert island.

I wonder what actual work they are capable of

great centrist viewpoint Guy, cheers

being as I am able to read and think, I know what the arguments in favour of the bonus cap were

my point is that they are wrong, at least it intended as an explanation for the financial crisis, and the deployment of the caps had nothing to do with reason and everything to do with political score-settling, or the pretence of

heh @ the tory press describing the caps as “EU-era” legislation - they were entirely domestic in political origin and impetus

The issue isn't quantum of bonuses, it's how much of them are paid in the immediate term as opposed to contingent on 2-3-4 year performance.

That's one issue. The other is they should be taxed as cash so a bus driver getting £200 at Christmas is not more highly taxed than some waste of space geezer/hooray henry that got the job through their mum and dad/school chums.

This means that Judo should definitely focus on bagging a banker as a starter husband.  I am so taken now with Clerghers' idea in that regard. 

Judy aren’t you like 50? I’m pretty sure bankers spend all their bonus wonga on prostitutes in their 20s…

Lower bonuses have been normalized now so doubt they will rocket due to this. It's a very different industry to 15 years ago. Once everyone who was senior in 08 has left the industry, pay will drop even more.

uncapped bonuses didn’t cause the GFC; imposing the cap was just political vindictiveness demanded by the electorate 

Don't they mean QE is ineffective though as the only way that money gets back into the real economy is via bankers' bonuses

What would prob help the City is free access to the huge market on its doorstep. Is this available somehow? 

Heh. As if the EU single market ever did much for services.  

Have you heard of any EU based corporate, or state owned borrower come to that, complaining that they used to but can no longer access the markets in London?   No, didn’t think so. They have all set up U.K. entities or trade through their local financial institutions’ London units.

Why do you guys assume the bankers aren’t paying tax on their bonuses? It’s PAYE like any other bonus just bigger and some of it in shares which vest over time - they are all employees working in the U.K. - you can only get fun with tax if your income is generated overseas

The timing isn’t great - plenty of fodder for Labour to bang on about Tories prioritising their fat cat friends instead of hard working families struggling with the cost of living crisis etc etc. 

Optically it’s a poor decision timed badly. Agree that in practice it will make little difference to total financial services comp.

Not read thread but if you think this ‘cap’ has had any effect overall on what people are paid I have pictures of several bridges for sale that I’m sure will look great on your phone.

I don't mind this but they really need to put more auditors and directors in prison when companies go tits

Kaul - such as? share schemes I am in aren’t super interesting to be honest. I suddenly made 100K more in share options but I am U.K. resident what can I do with that? 

Pretty certain my boys aren’t doing that and are you certain that sort of thing works for a highly regulated Bank with a U.K. sub? 

maybe your super senior guys but I know our incentive scheme up to MD without a title is basically PAYE so they are paying their full additional tax on the whole Shebang - they can’t play with being contractors either so there isn’t that much wiggle room on what why get from us

Ditto, I've never heard of rank and file front office doing that. Only rinkydink stuff is being able to hedge the FX.

There's also deferred sustainability bonuses that pay out if the bank hits certain soft targets. Those can be a lot for seniors and is basically be a way of paying them more.

If it is a UK bank then I suspect it depends which one. I know from prior experience that RBS and Lloyds are (or at least were, circa 2015 odd) very cautious around not being seen to be good corporate citizens around tax liabilities, especially after having taken so much of the King’s shilling after the GFC fallout. 

If you’re one of the others I don’t see why not. It’s a fairly common structure amongst ftse 100s.