Bankers bonuses – history repeating itself
So Barclays results are not as good but their bonus pool is up.
The bank’s total bonus pool for 2013 rose by 10% to £2.38bn, from £2.17bn in 2012, with the investment bank’s bonus pool increasing by 13%.
The details come a day after Barclays released its full-year profit figures.
The bank’s statutory pre-tax profits for 2013 rose to £2.9bn, while adjusted pre-tax profits fell to £5.2bn.
Barclays said its profits were hit by restructuring the bank last year, including its withdrawal from certain lines of business, as well as legal costs.
Overall, the bank’s pay-to-income ratio rose to 43.2% from 40% in 2012, well above the bank’s mid-30s target.
BBC News Website 11 February 2014 Barclays to cut up to 12,000 jobs as aims to trim costs
How does this work?
In a previous post I suggested:
I just wonder whether we in the UK might get some level of control by:
- Getting the shareholders to vote annually – in advance – for the size of the executive remuneration pool (to cover salary, benefits, pension, bonuses, golden parachutes, golden handcuffs, golden hellos and all other such payouts etc. etc.)
- Any losses made should be recovered from this pool
- Any fines charged against the company should be paid from this pool
- Should losses or fines exceed the pool, the deficit should be recovered from previously awarded deferred bonuses (share options etc.)
A bonus pool for just this year for just Barclays of £2.83bn (the same sort of scale as the GDP of a small country) should be used to pay fines and compensation first. Let’s look at the scale of compensation paid over the years for: Endowment mis-selling, Pensions mis-selling, PPI mis-selling, Credit Swap Insurance mis-selling, and Libor fiddling. (Outside banking most of these behaviours might be seen as fraud) Why should the shareholders pay?
(30 Jul 2013) previous scandals including pensions mis-selling of the 1980s, where the subsequent “clean-up” review cost about £10bn; and mortgage endowment mis-selling which cost lenders and insurers about £5bn.
(5 February 2013) Following a review, the bank said total provisions for the scandal involving interest rate swaps were now £850m, and £2.6bn for the PPI schemes.
(27 June 2012) Barclays has been fined £290m for attempting to manipulate the world’s benchmarking borrowing rate
I guess these “masters of the universe” believe they should be paid despite the misdeeds of them and their colleagues before the shareholders to whom they are meant to owe a duty. And the shareholders? Pension funds etc. which ultimately means the little people like you and me.
As an order of magnitude let’s compare just today’s Barclays bonus pool of £2.38bn with say the population of the UK at 65 Million. That’s on average £36 from each of us to pay for failure and misbehaviour at Barclays alone. RBS, HSBC, Lloyds, etc. still to come.
“We” are all in this together. The problem is those b******** at Barclays are not part of “us”. So they are the “pigs in the trough” and “we” are at the other end of the pigs!