Wednesday, April 29, 2009

Should they get a Bonus?

Citi seeks permission to pay bonuses: report

Citigroup Inc has asked the U.S. Treasury for permission to pay special bonuses and is looking for ways to free an energy-trading unit from government restrictions, the Wall Street Journal reported on its website on Tuesday. Citigroup executives are describing these as retention bonuses, but the bank is still considering several options of how to structure any bonuses, the paper said.

Posted by alan @ 11:14 AM (933 views)
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10 thoughts on “Should they get a Bonus?

  • it_is_going_with_a_bang says:

    “In one plan, the bonus would be largely stock that vests over some three years and be worth at least half the employee’s cumulative pay over the last three years,”

    The answer should be absolutely not. Go and find a job elsewhere. Over paid as it is.

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  • er, NO !

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  • I’d seriously love to work in HR at one of these places. “The world has moved on – if you want to leave then go get your stuff and I’ll hold the door open for you”.

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  • timmy t I would welcome a change in the world of banking and bonuses, but I am very well aware of the bankers arrogant self belief that they are indispensable and that the world governments will do anything to keep them going so it is only a matter of time before the ‘masters of the universe’ return to form and the bonus pool becomes much larger than their collective gene pools.

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  • ted the red says:

    These people see themselves as “alpha males/females” hence they should naturally be paid more than the rest of us “losers”.
    They seriously need to be told to shut up or clear off.
    I mean how did energy trading become a source of excess wealth for traders anyway. Isn’t the supply of domestic energy a utility?
    It should be a dull but reliable source of income for all those involved.

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  • Bystander – I probably have an oversimplified view on this, but the suggestion of separating retail from investment banking seems sensible to me. Ordinary folk’s savings and loans go back to the old fashioned way of doing things, and the hot-shots in the city can gamble all they like. They can take their big bonuses, but suffer the losses too. They would have had a great decade, but would now be crying into their beer. If you could isolate their activity so it minimises impact elsewhere, there would be winners and losers, rather than winners and the bailed-out.

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  • One (of many I am sure) of the aspects being overlooked by the government, in their witch hunt like approach to prohibiting “bonuses” within financially troubled, and federally aided corporations, is the oft approached compensation plan by which a large portion of salary for executives is “funneled” through a heavily bonus laced strategy. In other words, as a means of deferring costs (a cash flow sensitive tool) to a business, a business will set the compensation for an employee by providing little or no salary, deferring the bulk of a persons compensation for a time when profits (or in this case distributions) are dispersed.
    To tax this at the 90 percent rate that Obama is suggesting would be devastating, not to mention un-contitutional!

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  • absolutely agree timmy t, but wasn’t the problem that bonuses are paid across departments so everyone benefited from the risks, although some benefited more than others. Surely noone working in retail banking would be prepared to take such a drastic cut in bonus payments until they see their risk taking investment colleagues fleeced while they in turnreceive a constant, regular bonus paid to them every six months or so, and then you’d get the bleating from those poor investment ‘tools’ who can’t afford to pay for the ski trip to Val d’Isere or the new Aston as they had royally screwed up and yet feel it is their god given, I mean Government given right to receive bonuses whether the coin lands on heads or tails. Hope this makes sense. Basically, as with eco-ideals, the whole thinking, which has become ingrained for the past decade or so of ‘it’s mine by right and if I don’t get it Ill scweam and scweam until I’m sick, and I can’ (Fred the Shred), needs to change. Obama promised change, lets see if he or anyone else can bring about real, long-term, rather than short-term change to a diseased part of our society that has got more bloated and more sick the more it has suckled on the teat of capitalism and that teat has been replaced by an artificial lover whose milk is paid for by us, the tax payers.

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  • Ncbro4 – you mean earning unethically large bonuses by bringing economies to their knees is OK, but when they get taxed on that bonus it’s wrong? Think you might be on your own with that stance.

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  • If payment of bonuses is mandatory and not related to personal or corporate performance, it’s not a bonus. It’s income, and it should be taxed accordingly.

    My performance-related bonus is bloody taxed as income!

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