Tuesday, Feb 24, 2009
Living in another world
Independent: ‘We need a pay rise’ bankers demand
Senior City bankers are demanding pay rises of up to 10 per cent this year to make up for the clampdown on the bonus culture, a senior City head-hunter has told The Independent. Shaun Springer, chief executive of Napier Scott, which specialises in recruiting senior bankers for posts in Europe, Africa and the Middle East, said bankers were attempting to rebalance their financial packages in favour of higher salaries. And he predicted that, over the next few years, city salaries could more than double to compensate investment bankers.
Posted by quiet guy @ 10:55 PM (425 views) Add Comment
9 Comments
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1. Matthew said...
This is a joke isn't it? How about asking them if I can borrow £1,000,000 to go to my local casino? If I win I'll keep the money (without paying interest on the loan) and if I loose then I'll shrug my shoulders, pass the house debt onto the public, borrow more and the pay myself for loosing.....
Come on Britain....wake up and be a Nation...be men and women who have a voice. Or is you disillisionment and appathy so intrenched that you feel impotent to act. This is your Childrens future your are gambling with...I for one am disgusted!
2. japanese uncle said...
What they need is a rope (for hanging) rather than raise.
3. rotten tomato said...
Instead of raising (bwankers's) salaries, why not send the same banks with the unsustainable debts into bankruptcy organization? Create new banks with fresh funds, employing other people than the previous failed managers. The govt. should only guarantee ppl's savings.Then those billions which would have gone into banking bailout programs can be rather invested in publics works projects (badly needed in the crumbling West), creating real jobs and wealth in a trickle up effect. Give more money to engineers! I fear that the above 4 lines of common sense will never get through the earwax of Western politicians and our European elites.
4. Eternal Sceptic said...
We need a rise. No, you need to be fired for gross incompetance.
5. ketha said...
As tempting as it is to 'bash the bankers', let's consider 3 things... 1) bankers did what they were told, they made massive amounts of money in the short term 2) we've known since the dawn of times that humans are flawed, so we set in place robust ways in which to monitor and police this... laws, credit agencies, regulation, government... these boys aren't 'targeted' to make money but to understand what is going on.. it is these 'gods' who failed... the bankers did exactly what was logical and rational. 3) The mess is what it is, it's going to take skills to get out of... if bankers are paid a lower 'basic' and rely on bonus and the bonus is gone they need a higher basic,all things being equal...
that said the only one who can decide this is the government, and I've lost faith in them.
6. ketha said...
As tempting as it is to 'bash the bankers', let's consider 3 things... 1) bankers did what they were told, they made massive amounts of money in the short term 2) we've known since the dawn of times that humans are flawed, so we set in place robust ways in which to monitor and police this... laws, credit agencies, regulation, government... these boys aren't 'targeted' to make money but to understand what is going on.. it is these 'gods' who failed... the bankers did exactly what was logical and rational. 3) The mess is what it is, it's going to take skills to get out of... if bankers are paid a lower 'basic' and rely on bonus and the bonus is gone they need a higher basic,all things being equal...
that said the only one who can decide this is the government, and I've lost faith in them.
7. Deciphermonkey said...
Ketha, the argument that bankers were only doing what they were told doesn’t hold water. The same argument has been used to try to justify war crimes in the past. The people running these banks must have either known that there were potentially massive problems with the current system or were wilfully ignorant. Either way they should have known. I do agree with you that the blame should be shared equally with the Government and the regulators. The fact that the bankers are getting a hard time in the press is because they are still only paying lip service to doing anything about the problem and are still 100% focused on making money short term. I.e. they are still digging.
8. d'oh said...
Most IB bankers base pay is already beyond the wildest dreams of most employees. The skills are not that rare. I know a number of senior bankers, and none of them are supra geniuses. In fact, a couple of them have had other careers in which they were paid much less for exercising precisely the same skill set for similar hours per week.
To say that all bankers have been doing is making money for their banks as required of them is demonstratably false. Note the recent kerfuffle about HBOS and a similar article posted on here yesterday by a senior risk manager from an unidentified bank who was repeatedly thwarted in his attempts to block risky trades which looked good for the bonus of the trader, but exposed the bank to a 30 year risk. It is clear that some senior staff have been lining their own pockets at the expense of the long term viability of the institution that employs them, by trading long term risk for short term profit. I also had a conversation with a senior MBS guy from a bank that is no longer with us, who said that they knew the risks the business was putting the bank under for a long time, but continued to make hay whilst the sun shined. Of course most people in the bankhave no control over policy etc., so are vistims as well, but the simple fact is that many senior people have pushed for deals that were inimical to the long term well being of their employer.
Salaries in banking are already high. The extreme bonus culture is clearly misaligning the interests of employees and that of the banks' shareholders and the economy in general. Why the heck should these people have their pay doubled? It is obscene to argue that bankers rely upon their bonuses, when unemployment is rising and the people losing their jobs relied upon their salaries...
9. new user 2007 said...
Ketha.
You basic assumption is that these people are in fact talented and irreplaceable. That was never the case. There are plenty of people who can do those jobs BUT the people at the top of banks and hiring like to to create barriers to numbers as 1) they worked many hours so why shouldn't the new people and, more importantly, 2) they can then justify their own inflated salaries.
This applies to directors and many other jobs. Does anyone wonder why there has been a surge in people with "director level qualifications" i.e. degrees etc BUT during the same period salaries for the said people rose way beyond the average i.e. the average person has become more qualified (and so closer to the top end of the hierarchy BUT has moved further down in relative income terms).
Fine, lets pay for unique talents and for results BUT NOT for average talents that happen to be in the correct field or network, and even worse, pay people bonuses for failure. Gold parachutes for executives, pay rises for people who work in banks that only survive via public handouts etc.
They profess to being in a free market environment. Given the lack of exceptional skills, and what I say above, the supply of labour wishing to enter (never mind the unemployed in it) the industry would suggest wages should fall. And yes we need people who understand the banks to stay there, but they will hardly get other jobs somewhere else, so why worry that they will leave if they do not get pay rises.