Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Alexander - someone sat at a desk or just doing admin while they can do their job efficiently and have an impact in that respect their ability to add to the bottom line is limited. There are some people who through their role, if effective, can significantly boost profits. Salesmen for instance is an obvious example, another in finance will be those who manage investment funds and make daily decisions that effect on how well their fund(s) do relative to their benchmarks. Other example include management at all levels who's efficient management can keep costs down adding to the bottom line. Directors too, are an obvious example. Ultimately it is sensible and logical that those who carry high levels of responsibility for creating the revenue to get a higher bonus. What is wrong is paying a bonus as a right and not where it is justified by performance against benchmarks and that information may not always be obvious to the casual observer.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
Barry, firstly, the economic situation - the downfall and sheer bankruptcies - we have been hearing of all across Britain and the eurozone, do not justify the bonuses of top guys directly involved in big-time economy.
They should be getting no bonus at all in return for the desperate situation they have let our economy sink in to.
Secondly, these guys usually lay people off so as to increase their own bonuses.
Thirdly, you did not address the point I made: if already on a top salary, who do these guys not be content. They are supposed to do their work in return for their high wages.
Why do their annual bonuses by far exceed their salary?
Where is the correlation between getting a 10% bonus on £20,000 a year, and a 330% bonus on £300,000 a year?
You are not answering these essential questions.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Alexander - if anything bonuses are more important because the difficult economic environment. This is all to do with getting the bottom line up and creating more profit for the business. Better performance is needed more than ever from each member of staff who can influence the turnover/profit.
Whether to lay people off is a matter for the directors of a business and many of the people who get these bonuses are not responsible for the cost base only generating revenue. The decision to lay people off for any business is never taken lightly and is a difficult one. Businesses always have to keep their structures and costs under review and it would be a very poorly managed company that did not do so and sometimes that does mean laying people off. It would be irresponsible to manage a business inefficiently and with higher costs than they need and it would place the whole long-term future of a business in jeopardy and of all the jobs it provides. Business do not lay people off just to get bonuses - in the short term can reduce the bottom line due to one-off costs.
Managing a business is difficult and challenging. A wrong decision that shears just a fraction of a percentage point off turnover can turn a significant profit into a significant loss in a very short time.
Armchair 'business managers' can be as far off track as some of the 'armchair generals' we see on TV and there are a lot of armchair business managers here on this forum who have never run a business in their lives and, from what I read, many would not even know where to start. This comment is not aimed at any specific individual.
Guest 695- Registered: 30 Mar 2010
- Posts: 426
Barry, when are you going to own up that you're not an expert when it comes to financial or business matters. There are obviously those far better equipped on here to offer such advice.
I suggest you give up the day job immediately.
Apart from that you have the patience of a saint to even bother responding!!
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
LOL Tony..... I wondered what you was on about at first......
Guest 695- Registered: 30 Mar 2010
- Posts: 426
I thought I might as well add some humour so the confused could possibly be educated in how business really works. Though I honestly think you are barking up a barren tree
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
all getting a bit elitist if nobody is allowed an opinion on business matters unless they have operated one themselves.
a bit like eating a bad meal in a restaurant and when complaining the owner says we are not entitled to an opinion if we had not run an eaterie ourselves.
Jan Higgins
- Location: Dover
- Registered: 5 Jul 2010
- Posts: 13,894
How true, nobody is perfect and everyone can be wrong or misinterpreted at times.
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I try to be neutral and polite but it is hard and getting even more difficult at times.
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Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
Barry, you have completely avoided the subject.
I was specifically referring to bankers and chief executives of large share-holding companies who get bonuses in the millions of pounds a year.
Exactly that point you are avoiding.
And the fact that dividends that should go to shareholders are eaten up as bonuses by the chief executives.
I wasn't referring to small businesses like my own painting and decorating business or Tony Jayms' two shops.
A million pound bonus a year, to give an example and a round figure, is about 3-4 times higher than the top salary of the person giving themself that bonus with other people's money.
Try researching on internet how many billions of pounds a year in Britain go on bankers bonuses, and I mean the high class bankers, not the people working behind the counter.
It's a relatively small number of people giving themselves tens of billions of pounds a year of other people's money. It's not their money!
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
Just to give 1 example: The Guardian 24 Feb 2011 reported that
"RBS bankers get £950m in bonuses despite £1.1bn loss".
"More than 100 bankers at Royal Bank of Scotland were paid more than £1m last year and total bonus payouts reached nearly £1bn - even though the bailed-out bank reported losses of £1.1bn for 2010".
The British taxpayers own 83% of the Royal Bank of Scotland, and these bonuses for 2010 almost equal the losses of that bank in the same year.
This is just 1 example.
How does one justify that? One doesn't, one can't!
It's not their money that they are taking on top of their top-salaries.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Alexander - no I included them in the example and answer. The losses of the overall business is not relevant because the 100 'business units' may have met their specific targets which will help towards the longer term recovery of the business. It is fully justifiable.
Performance is measured against the benchmarks set for the individual. If that is the manager of a fund investing in FTSE100 companies that benchmark may be to outperform the FTSE100 by, say 2% in a year, that means if the FTSE100 falls by 5% but their fund falls only 3% they will have still met their benchmark having made the right investment decisions. In so doing they moderated the losses and therefore deserves their bonus which might be a fraction of a percentage of the funds under management. The same applies to managers, a company might be making losses overall but if their unit achieves it budget and meets targets then they deserve the bonus. It is by achieving those targets you can get a business into a better position. As I said, what is wrong is paying a bonus where they have not met benchmarks.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
Or where there were no benchmarks in the first place.....
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
sorry peter,
think i confused the isssue a bit
iv never worked in a bank
worked in many places but not a bank.
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
Barry, but surely one point remains to be clarified.
Why do some people get no bonus, for example millions of people who do not decide where big money is invested, and other people get say a 5% or 10% bonus in respect of their annual income, and yet other people - usually if not always on a top wage, get a 300-400% bonus?
I thought that if a top banker or chief executive earned £300,000 a year, that in itself was sufficient compensation for their work.
Why can't their bonus be £30,000 a year? Why does it have to be £1 million?
How can one justify - rightly or wrongly - that public sector workers should get less pensions, or other people should not receive child benefits for their children, but at the same time justify that a top earner on hundreds of thousands a year should receive a £1 million bonus EVERY YEAR?
Is this not a slap round the face to us working people who struggle, and are told every day that we can expect more and more spending cuts, and more hardships to come?
My question is, is a £30,000 yearly bonus on a £300,000 annual salary not good enough? That would be a 10% reward.
It is obvious to see that these people on massive 300% bonuses amounting to a £million each year consider themselves more important than us, better than us, and consider us as inferior.
They show disdain towards us. Yes they despise us.
And they do not hesitate to home-evict the unfortunate family that could not meet up with debt repayments.
They show no human compassion, and unlike Scrooge, who also slept with his golden ducats under the pillow, are not moved to compassion either.
And no, they won't go and give their money away to the poor, as Scrooge did, when he saw what people thought of him.
They know what we think of them, and how much more we will think of them as they continue to line their pockets while we languish in despair.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Alexander - I have given the answer, bonuses are essential and are calculated and worked out in different ways depending on the nature of a particular job. It is all down to the policy of the employer and it really is a matter for them and them alone who gets and who does not get a bonus.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
ALL POSTS ARE MY OWN PERSONAL VIEWS
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
alexander/barryw
I think barryw is correct it' is up to the employer as to who gets what wage and bonus/s.
i think most people just want fairness when employers pick up millions of pounds whilst its workforce earn poverty wages is where the problem is.
ALL POSTS ARE MY OWN PERSONAL VIEWS
How often does that actually happen in the UK?
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,942
how long have you got bern??
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
Keith - define 'poverty'