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cojones
8th Feb 2009, 22:45
How much bonus did YOU get paid last year?
Did you earn that bonus?
Did you duck below DH/MDA because you caught a glimpse of 'something' and you knew the threshold lights and TDZ lighting would appear in a second... You did? Oh, well done, old boy. But that won't determine your bonus, because no-one knows about how 'good' you are. You took a risk and got away with it.
I know that none of us would condone such action.
Ahaa.. but if you'd pranged your effing aeroplane and killed scores or hundreds of people you would have been crucified in a court of law and been put away for a very long time.
Financial Risk=Financial Reward if you get away with it. Now that our banking brethren have been seen to be disastrously foolhardy, you and I, the tax payers, are now going to pay them bonuses of billions of s.
Shum mishtake shurely?
I am all in favour of massive bonuses to my financial gurus. AFTER they have made millions of s for me, THEN, and only then, do they get their greedy little snouts in the trough.
I retired with a pension 'pot' of about 700,000, most of it market and finance based, and I expected a return of some 6% to 7%, ie an annual income of 40,000 to 50,000. Not a huge sum for a life of contract flying, but enough to survive. Now my 'pot' is worth some 400,000 earning some 1%,4000 pa. Not a lot is it?
What to do? Withold payment of any tax due until Darling balances the books, and makes sure that those people responsible either pay back their bonuses or send them down for a long stretch too.

Gooneyone
8th Feb 2009, 23:00
As far as I am concerned, rather than paying them bonuses the following should be done:
1) Seize ALL their assets.
2) Start legal proceedings against them for malfeasance in office, fraud and whatever else they can be got on.
3) If found guilty, hand over their assets to the people they basically defrauded.
4) Let them do community service for the rest of their lives.
And let's start with the ones who started the sub-prime mess.

I would not object too strenuously to anyone wishing to line them all up and shoot them.

Scrubbed
9th Feb 2009, 06:53
let's start with the ones who started the sub-prime mess.

Does that include the peasantry who bought into it? Sub-prime - Bad ideas which would've gone nowhere without the ignorant greed of the masses...

Flap 5
9th Feb 2009, 08:31
Does that include the peasantry who bought into it? Sub-prime - Bad ideas which would've gone nowhere without the ignorant greed of the masses...

I don't think that is fair. The 'peasantry' were advised by the experts (the bankers) who knew exactly what was happening: get peasants to sign for loan, sell loan on, not my problem any more.

Overdrive
9th Feb 2009, 08:51
Since the real world value of just about everything has fallen hugely as a direct result, maybe a start would be to reduce what is owed in certain private and business/com. loans and mortgages on liquifiable assets by a similar proportion, to reduce negative equity. Or at least offset some of it.

500k mortgage on was-500k house that is now valued at 400k? Mortgage down to 400k then.

Why does the amount owed never reduce, whatever the prevailing power/value of currency etc? Wouldn't be to enable snatch-back "readjustments" would it? Or to ensure that the banks and lending institutions don't suffer the same losses on falling currency?

Come to think of it, maybe we should allow them to increase the amount owed, so as to save them taking bailout from taxation? :p

Blacksheep
9th Feb 2009, 09:07
Don't blame the Sub-Prime mess for the collapse of the financial system.
The sub-prime fraud was just the last straw that broke the camel's back.

There's always a last straw for every pyramid scheme. In fact the failure was a regulatory failure that hung upon the mistaken belief that the financial world was prudent and cautious enough to regulate itself. Allan Greenspan recently admitted as much and acknowledged that the mistake was largely his own. As Chancellor, Gormless Gordon followed the guru's lead, relinquished Treasury control over UK money supply entirely to the Bank of England (Bankers, every last one of them) and freed the banks to inflate their liquidity ratios to unsustainable levels. It is noticeable that those banks (e.g. Lloyds, Barclays) that retained some (but not much) semblance of reality have returned profits in their current financial year, while those that jumped on the greedy bandwagon (Northern Rock, RBS) are out of business or in tatters.

The entire staff of RBS for example, are complicit in a massive fraud and rather than pay them bonuses because they are "in their contracts of employment" they should be investigated and prosecuted. In any case, how any payment included in a contract can be a "Bonus" escapes me. By definition a bonus is an ex-gratia payment made as a reward for outstanding performance beyond that which is contracted.

The first signs that all was not well in the financial system came several years ago, with the failure of pension funds and the selling of unsuitable endowment policies to unsuspecting victims with little or no financial awareness. If the Chancellor had heeded these warnings that the financial world could not in fact be trusted to properly regulate itself and had re-tightened the controls, the current state of affairs would not have come about. The FSA has been and remains a paper tiger, filled as it is with failed bankers and unworldly civil servants.

Gormless Gordon has to Go. Along with his idiot reformed former card-carrying communist chancellor and as soon as possible. It is said that GG is about to reshuffle his cabinet - Lord Save Us from Ed Balls... :eek:

Ultralights
9th Feb 2009, 09:21
bring on the revolution!!!:D

Flap 5
9th Feb 2009, 10:55
As a follow on to Blacksheeps post I was watching the Parliament channel on Sunday morning (I was bored) and came across a Congressional Hearing about the SEC's lack of action with Madoff. The following is a link to it on C-SPAN:

C-SPAN Video Player - House Financial Services Hearing on Madoff Investigation (http://www.cspan.org/Watch/watch.aspx?MediaId=HP-A-15082)

The stonewalling and lack of answering the question by the SEC is incredible. One of the Congressmen gets very angry with them and it is quite amazing to watch. The Parliament channel had a 35 minute section - although the link takes you to 4 hours and 35 minutes worth. The juicy bit starts just after 3 hours and 30 minutes with Mr. Ackerman.

Curious Pax
9th Feb 2009, 11:25
The entire staff of RBS for example, are complicit in a massive fraud and rather than pay them bonuses because they are "in their contracts of employment" they should be investigated and prosecuted.

The entire staff? Some hapless harpy on the counter in your local branch? I suppose if you have personally lost money then you are justified in by being so angry, but maybe a reality check is in order?

The cry from many in the aviation world is to complain that they are treated like mushrooms by those above them. Why do you imagine the banking world is any different? It's all targets targets targets for them these days, with little tie in to the bigger picture.* Perhaps you will be happier to learn that for the lower orders at least, the company sharesave scheme (for RBS at least) has lots these individuals bucketloads.

* I feel obliged to point out that I don't work in the banking industry, but know a few people who do.

Dr Jekyll
9th Feb 2009, 11:57
In any case, how any payment included in a contract can be a "Bonus" escapes me. By definition a bonus is an ex-gratia payment made as a reward for outstanding performance beyond that which is contracted.

So if instead of being employed on 40K an employee has a salary of 25K with another 15K available if they (not the banks) achieve certain targets. What would you call the 15K, if not a bonus?

If you say such bonuses should not be paid, should the employees without bonuses in ther contract still get their contracted salary?

Flap 5
9th Feb 2009, 14:02
So if instead of being employed on 40K an employee has a salary of 25K with another 15K available if they (not the banks) achieve certain targets. What would you call the 15K, if not a bonus?

If you say such bonuses should not be paid, should the employees without bonuses in ther contract still get their contracted salary?

So a bank employs someone on 25k and tells them they will get a bonus of 15k if they do well and the bank can justify the bonus because the bank makes a profit. Well, RBS has not made a profit. In fact they made an enormous loss. In terms of the thread title pilots get a bonus if their company makes a profit. In the case of banks people are promised bonuses regardless of performance. That is wrong.

Interestingly Barclays who have not taken any public money but have made a profit are not paying their executives any bonus. RBS who have taken public money are still considering bonuses and have most definitely not yet said no to bonuses. Clearly Barclays is much better run than RBS.

Dr Jekyll
9th Feb 2009, 15:05
If the bonus is conditional on the bank making a profit they won't get it will they? What exactly is the difference between someone who has met their personal objectives which entitle them to a bonus getting that bonus, and someone getting their salary?

Do you object to anyone who works for a loss making bank (or airline) getting paid their agreed salary?

Flap 5
9th Feb 2009, 15:30
If the bonus is conditional on the bank making a profit they won't get it will they? What exactly is the difference between someone who has met their personal objectives which entitle them to a bonus getting that bonus, and someone getting their salary?

Do you object to anyone who works for a loss making bank (or airline) getting paid their agreed salary?

Direct answer: A salary is payable regardless of performance. Poor performance where the salary is not justified leads to termination of employment. Bonuses are based on performance over and above normal employment performance if it is based on individual performance, otherwise it is based on company performance as a collective productivity bonus.

That is the way it should be. In the case of banks and top executives of some other companies where bonuses are paid even for failure then it is not the case.

Dr Jekyll
9th Feb 2009, 15:57
But the point at issue is whether bonuses should be withheld from staff who have met the personal performance criteria.

Flap 5
9th Feb 2009, 16:51
If it is in the employment contract and there is no get out clause for poor company performance then whoever drew up the contract should be sacked (with no bonus!). In that case you have to honour the contract, but enforce a new contract from now on. If they threaten to leave then let them. Where would they go? There isn't exactly a lot of jobs going for failed bankers at present.

In the same way that pilot's get a bonus, or not, on the basis of overall company profitability bankers should get a bonus, or not, on the basis of overall bank profitability.

Dr Jekyll
9th Feb 2009, 17:20
In the same way that pilot's get a bonus, or not, on the basis of overall company profitability bankers should get a bonus, or not, on the basis of overall bank profitability.

Why does that make more sense than basing it on individual performance? Why should someone who does just enough to avoid the sack get a bonus just because their colleagues have worked hard to make the bank profitable?

ehwatezedoing
9th Feb 2009, 20:18
corones, someone at the Financial Director had this pilots versus bankers theory well rounded up too.
Editor's letter: Fear of flying - Financial Director (http://www.financialdirector.co.uk/financial-director/comment/2235023/fear-flying)

cojones
9th Feb 2009, 21:19
Yes, that is really good. Just what I was trying to say!!
I guess with your 'Ehwatzedoing' moniker, you're an Airbus pilot??

Blacksheep
10th Feb 2009, 13:55
So if instead of being employed on 40K an employee has a salary of 25K with another 15K available if they (not the banks) achieve certain targets. What would you call the 15K, if not a bonus?So, the target was to lose how many billions? Eh?

The entire staff? Some hapless harpy on the counter in your local branch? I suppose if you have personally lost money then you are justified in by being so angry, but maybe a reality check is in order?As to the minions on the counters in the High Street, they are not the ones who are set to get a significant share in the 1,000,000,000 "Bonus" pay-out are they? The Directors are not getting a penny, the busy bees that beaver about in the retail outlets are getting what they earned. We are talking here, about the Pin-Stripe Spivs in the higher management who tweaked the liquidity ratios and those in the trading rooms who stitched up the system to make the inflated 'paper' profits that brought them their cash bonuses.

But Sir Fred said if bankers felt they were not paid enough, they would leave. Goodbye! Close the door on your way out - and see what work you can find when your CV reveals that you were a banker in a previous life. :rolleyes:

As I heard on CNN, where a CEO had said that if he didn't pay the bonus he would lose all his best people. The presenter responded that judging by the loss his bank had made, he didn't HAVE any best people.

D SQDRN 97th IOTC
10th Feb 2009, 15:18
Blacksheep

Alright...so I'll bite.
Help me out here. What do you mean by "tweaked the liquidity ratios"? And if the profits were only "paper" profits, can't the losses also just be "paper" losses.

Is the blame to be laid squarely at the foot of just the Spivs? Do you have a problem with FX traders? How about people that sell interest rate swaps? Or is something more fundamental and closer to home (possibly near yours !) happening here, and the people you want to blame are really (in part) the people who approve mortgages up and down the length of the high streets in the UK (and USA) - and these people are possibly the children of the same people who approved you for a mortgage some years ago if you had had one. Let's look at Northern Rock (but Lloyds and HBOS are not much different I think) where more than 6% of the entire mortgage book is behind in payments. That is more than 1 in 20 of their borrowers. So for each mortgage approved by a Northern Rock Spiv, 1 in 20 is now in arrears. For each house that Northen Rock has repossessed, they estimate on average that they have lost nearly 20k.
So the Banks that have been lending crazy salary multiples of money on mortgages (6*, 7* salary...), and up to 125% the purchase price have not surprisingly not been making much money.
But then there were the Spivs, who were required to lend money under the
Community Reinvestment Act, which basil drew your attention to.

I suggest you read it - that will help you understand the origin of the sub prime mess.

Captain Stable
10th Feb 2009, 16:38
But Sir Fred said if bankers felt they were not paid enough, they would leave.Never mind thir employability - there aren't exactly a lot of banking/bookmaking jobs going at the moment. So if they walk, they're making themselves walk the employment plank - and the sharks are below in their hundreds, and hungry.

under_exposed
10th Feb 2009, 17:00
In that case you have to honour the contract, but enforce a new contract from now on.

If you are happy enough to break their contract next year why not break it this year?

Bonuses (http://www.thedailymash.co.uk/news/business/other-people's-bonuses-are-morally-wrong%2c-says-everyone-200902101569/)

Captain Stable
10th Feb 2009, 18:34
There is an argument that the banks that were saved by government intervention/bail out were to all intents and purposes defunct, i.e. no longer going concerns and that therefore all employees are now in a new concern. As such, their contracts are null and void anyway. One step further than that, they sould have to reapply for their jobs. Cue massive "re-emphasis".

Captain Stable
10th Feb 2009, 18:56
HBOS sacked and gagged a senior executive who four years ago warned the board of the bank that they were taking excessive risks, according to evidence given in Parliament this morning. MPs on the Treasury Select Committee were given details of a submission from the former head of risk at HBOS who claimed that he warned the board repeatedly that they were taking risks with financial stability and consumer protection.
Paul Moore, a former partner of KMPG and head of group regulatory risk at HBOS between 2002 and 2005, accused the bank of "a total failure of all key aspects of corporate governance" and said that he was repeatedly rebuffed and thwarted when he tried to register concern.

In a highly sensitive development he also pointed the finger of blame firmly at Sir James Crosby, the former chief executive of HBOS, who is deputy chairman of the chief City regulator the Financial Services Authority and a senior adviser to the Government. HBOS sacked and gagged bank risk whistleblower - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5701380.ece)

Blacksheep
11th Feb 2009, 00:17
"tweaking the liquidity ratios" was where the banks, released from controls by Greenspan, Brown etc. started lending up to thirty times as much money (i.e. non-existent paper) as they had in liquid assets. Under earlier controls, they were prudently restricted within a band of eight to twelve times their liquid assets and in UK at least, the Treasury exercised control by varying the amount that they were obliged to hold on deposit with the Bank of England. But of course you knew that, didn't you IOTC?

30:1 ratios were sheer madness. As to Northern Rock, it wasn't the money they lent in mortgages that sank them, it was the rock sold mortgage backed "assets" they imprudently purchased without checking on the true value of the bundled packages. The traders who lent mortgages to people who had no prospect of ever repaying and then packaged the resulting "junk" into mortgage-backed financial instruments and sold these on as solid investment asset bundles are what? Social Workers or Fraudsters? Fraud is what this is generally called; so how are they getting away with it? And what kind of idiots allowed this to happen? The FSA? With the likes of Sir James Crosby involved in setting its strategic policy and its overall direction?

As for me, I couldn't give a damn, but our children are in harm's way and who will bail them out? Me as usual I suppose. :(

Flap 5
11th Feb 2009, 06:56
HBOS sacked and gagged bank risk whistleblower - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5701380.ece)

That for me was where the apologies fell down. These people were warned and they not only chose to ignore the warning but sacked the guy. This person was employed to oversee the risk aspects. When the board of directors of the bank didn't hear what they wanted to hear they sacked him. That is why the apology was a nonsense, a PR stunt more than anything else.

D SQDRN 97th IOTC
11th Feb 2009, 07:52
Blacksheep

You are talking balance sheet leverage, not liquidity.
Yes you are right that balance sheet leverage increased dramatically across the Banking Industry- and the example you gave of leverage rising from 8 to 30 was not unusual.
A rise from 8 to 30 times leverage, is not however what I would call "tweaking".
This excess of leverage was a failure of controls in several respects.
It was a failure of the Banks to regulate themselves (but you find that every 25 years or so - it is a generation thing I think, where each new generation of bankers thinks it knows better than the previous one, but ends up learning the same lessons the hard way) the Banks get massively over-confident and chuck huge amounts of money at people who can't repay it - look at Latin America in the early 80s), a failure of the regulators to do their jobs in keeping the Banks in line (in fact the regulators in the USA threatened prosecution of the Banks for discrimination if they didn't lend money to sub-prime borrowers), and the failure of borrowers too - just because someone offers you silly money you should only take the money if you believe you will be able to pay it back.

Now lending to sub-prime is not such a bad thing if you can sell on this risk to someone who wants it. There is normally a taker to be found for all sorts of risk so long as the price is right. You want government backed securities? Then the reward will be low as there is only government risk. You want a higher reward? Then you need to start taking risk. Every lender is taking risk when they grant a mortgage - but they are not so concerned about the risk of lending to sub-prime borrowers if someone else is prepared to take this risk away from them. So this is what they did. But lo ! They saw after some years of doing this that the people who were buying the risk were making money - so they thought they would lend more money to sub-prime, but this time they would keep some of the risk themselves. And behold! The Banks started making decent money out of this line of business, and their shareholders wanted them to do more, and to keep more of the risk......

So the problem started small..........and whilst the housing market continued to rise, the people who owned the risk were not too worried because they knew they could repossess the underlying properties to get their money back.

But then in August 2007, BNP closed the door to redemptions on a couple of its US property funds. And thus the credit crunch started. And people despaired......

But back to you.
Traders don't lend mortgages to people.
A lack of liquidity (a run on the Bank) spelled the end of Northern Rock, not losses from its investments in sub-prime paper.
Please don't regurgitate what you read in the Daily Express or the Mail.
And you didn't comment on the "paper" profits or losses question.......

For those that want to read the latest regulatory thinking on liquidity, you should visit these links
http://www.fsa.gov.uk/pubs/cp/cp08_22.pdf
http://www.fsa.gov.uk/pubs/discussion/dp07_07.pdf

One is a consultation paper - cp08_22 - and the other is a discussion paper.
For those who think Northern Rock was a sub-prime problem, they should read para 1.1 of the introduction.

Blacksheep
11th Feb 2009, 11:17
This excess of leverage was a failure of controls in several respects.
It was a failure of the Banks to regulate themselves (but you find that every 25 years or so - it is a generation thing I think, where each new generation of bankers thinks it knows better than the previous oneNot so. It is not a repetitive process. The banks were always regulated by governments, acting through their central banks. Retail Banks did not indulge in financing mortgages or international trade deals and Investment Banks did not engage in High Street services. The ratio of assets to liabilities was controlled by requiring banks to deposit a specific proportion of their cash in the central bank and, by varying this proportion, governments controlled the ability of the banks to create money. (create money as in lending money that doesn't physically exist, to borrowers who were expected to be able to make the repayments on the loan that only actually existed in the the dusty pages of the ledger).

When in my twenties, one could not get a bank account without two references from persons of standing. Once I had an account, I had to pay the bank for managing my money. It was not possible to get a mortgage from the bank because they didn't do mortgages. You had an account with a building society in which you built up the 25% deposit needed before they might grant you a mortgage.

Saving was rewarded because governments wished to encourage savings. If you saved by investing in either a Unit Trust or an Investment Trust Fund, the contributions were rewarded by income tax relief. Likewise for those who prudently bought into a life insurance policy. Mortgage interest payments also received income tax relief, to encourage people to buy their own homes and settle down to being prudent and upstanding citizenry.

Now of course, saving fund contributions are taxed and in any case, most funds were pillaged by formerly prudent insurance companies and "Friendly Societies", freshly converted into retail cum investmant banks, securing the underlying assets and selling short for quick profit. An activity that destroyed the original intent of the funds - long term exponential growth. But what did the men in red braces care about that, eh?

Simple days, but the rules kept everybody honest. More or less.

Remember, it was Alan Greenspan himself who recently admitted that his greatest mistake was believing that the banks could be trusted to regulate themselves.

D SQDRN 97th IOTC
11th Feb 2009, 12:53
Blacksheep

I am not sure I follow your post.
You seem to have turned from saying that Bankers are Spivs, into saying it is now all the fault of the Central Banks?
Are you really saying that Banks did not made mistakes in the past from over lending to people that couldn't pay it back? So Latin America in the 80s was all a bad dream?
You say retail Banks are not in the business of financing mortgages? Quite the contrary - that was and is the mainstream of their business.
You want a walk down memory lane about how things were different when you were a youngster regarding credit controls and taxation regimes? Fine, it's a free UK and the resulting fiscal policies currently in place were brought in by a succession of variously elected governments - but most of them from Labour in the last 10 years.
You mention ratios - well now we are talking about capital ratios, just in case you weren't aware.
Good to see you have lost your disdain for traders.

You say:
"Now of course, saving fund contributions are taxed and in any case, most funds were pillaged by formerly prudent insurance companies and "Friendly Societies", freshly converted into retail cum investmant banks, securing the underlying assets and selling short for quick profit. An activity that destroyed the original intent of the funds - long term exponential growth. But what did the men in red braces care about that, eh? "
I can't think of any prudent insurance companies freshly converted into retail cum investment banks. Perhaps you can help by giving me an example or two? And I also do not understand your comment about securing assets and selling short for a quick profit.

and finally, and this really confuses me, you quote Greenspan.
"Remember, it was Alan Greenspan himself who recently admitted that his greatest mistake was believing that the banks could be trusted to regulate themselves. "
You also quote me at the beginning of your post, posting my comment "It was a failure of the Banks to regulate themselves......"
At least Alan Greenspan & I agree.
But you say "Not so."
I am often wrong - but do you really think Greenspan was wrong?

Overdrive
11th Feb 2009, 17:10
I only saw a short clip of a couple of questions not the whole thing, so don't know much of what was said factually, but; those apologies were so cringeworthy, fake and without substance. Tear-jerking stuff would've been a but cynical in the circumstances, but those performances were silly. A couple of them were nearly smirking. I guess they're not used to apologizing.

Those kind of sessions are an empty political sop. Action would help.

Captain Stable
11th Feb 2009, 18:49
We won't get action.

Senior politicians are so unwilling to take action that the bankers were briefed beforehand to make apologies - and if you can't be sincere, fake being sincere.

Senior politicians want a bolt-hole to head for when they're finally chucked out into the cold. They want a nice little store of fat non-executive directorships for which they have to work not a lot except to turn up to a meeting once a month and a nice fat reimbursement that will keep them laughing all the way to the (bankrupt) bank.

So, do you really think they'll pi55 off their future fellow board-members/employers?

Overdrive
12th Feb 2009, 17:23
So, do you really think they'll pi55 off their future fellow board-members/employers?



Not normally, I agree. This time is a little different though...

flash8
25th Mar 2009, 16:16
Front Office staff and Junior Back office aren't of course to blame. Those boys and girls wouldn't even know that a CDO was a (financial) instrument, nor indeed, what even consisted an instrument, or how it all (this mess) originated with Milken. They are the Monkeys not the Organ Grinders.

No, who should be laughed out of their jobs with a good kick up the backside is the Banks Risk Management Departments... whose greed (kinda contradictory to Risk Management) knew no bounds and was run by inept buffoons and intellectually bankrupt minions handling rocket-fueled risky complex (not even fully understood by them) and ultimately debt-ridden tailor made highly leveraged sh*te.

I have always wondered the so called value of Corporate "Managers" whose days consist of expense account lunches and idle pseudo corporate chitter-chatter (aka b*ll). And as I used to be fairly senior in a HBOS down in good old Copley (in the old Halifax days) I can tell you without a doubt its all about saving your own backside - f*ck the clients. Oh well... at least it paid for the CPL/IR...

anotherthing
25th Mar 2009, 16:50
The governement are as much to blame surely after all they have bodies in place to oversee banking practices?

The alleged wrongdoings of the banks have only come to haunt them because of the current state of the economy.

When the economy was strong, everyone was happy enough with how banks worked.

Hindsight is a wonderful thing (notwithstanding the HBOS chappie). Any laying of blame is as much to do with GB et al treying to squirm away from their responsibility in this mess.

As for Sir Freds pension - I personally think he should keep it. A bonus would be a different matter, but he has earned his pension under the watchful eye of governing bodies over the years.

larssnowpharter
25th Mar 2009, 17:05
Two years ago I designed a bonus system for the business that employs me. The bonus scheme was based on achieving certain targets and was closely tailored to the the company goals.

A total of 2 month's salary was the maximum payable to any employee.

To simplify things:

40% of the bonus payment was based on achieving certain safety targets.
20% was payable on achieving certain profits
40% was payable on achieving certain production targets

However, if the profit targets were not met only the safety part of the bonus was payable.

Any bonus scheme has to link the bonus to profitability. It has to be insane to reward people who do not - as a team - achieve set goals.

chuks
25th Mar 2009, 19:09
The tingle of AVGAS in your armpit on the first pre-flight of the day...

The taste of a microwave hamburger with "Best by: March 2010" on the wrapper...

The sight of a beautiful sunrise for the fifth day in a row...

The glint of frost on your jacket as you try to manually de-ice your Cessna using a credit card held in your freezing fingers...

Little boys standing at the fence gawking at you and your Cessna in awe... (Too bad it's just the Special Needs School's outing.)

Beautiful girls fawning over you in the bar when you explain that you are a professional pilot... (Only later do you realise that your portemonnaie seems to have gone missing.)

Hey, who ever said, when he was little that he wanted to be a banker when he grew up? Take your bonus and stuff it!

(Thinks: That is him told but me stuffed. Oh well...)

larssnowpharter
25th Mar 2009, 19:23
Hey, who ever said, when he was little that he wanted to be a banker when he grew up? Take your bonus and stuff it!

Understand where you're coming from and could not agree more.:ok:

Unfortunately, no-one will pay me to fly any more and had to go and earn my bread elsewhere. However, still get to act as safety pilot for my dad (now 87) and do silly things with sailplanes and the Pitts.

But, back to the point, if you design the business right from the outset and put in sensible and ethical goals, you really can focus bonus schemes on getting your peeps to achieve those goals.