Friday, January 23, 2009

Rocking that bonus boat

I find the news that Northern Rock staff are to get a 10% bonus to be quite incredible.
Northern Rock triggered a political row last night when it revealed that it was preparing to pay about £9 million in staff bonuses.

The nationalised bank confirmed that almost all its 4,500 employees would receive bonuses worth 10 per cent of annual pay tomorrow. For an average employee, that will amount to about £2,000.

Now, there are a couple of things that annoy me about this. The first is that I thought that we had all agreed that the "bonus culture" was a bad thing? Was the government not condemning it? Indeed, they were essentially laying all the ills of the banking crisis at the feet of said culture.

The second thing that pisses me right off is that, in return for government loans, most banks were stopped from paying any dividends to shareholders. So, now that Northern Rock is paying what are, effectively, dividends to its employees, will it also be paying dividends to shareholders? In fact, will the government be lifting the ban on dividends entirely?*

But it is this utterly hysterical defence of this bonus scheme that gripped my shit. [Emphasis mine.]
Unite, the trade union, defended the payments. “Staff at the bank have worked exceptionally hard in extremely difficult circumstances. They have experienced the loss of friends and colleagues through compulsory redundancy yet have continued working solidly,” it said.

What? That phrasing—"experienced the loss of friends"—that I find a bit insane: it's not like these people are dead, for fuck's sake. Perhaps I should send cards to Northern Rock employees reading "so sorry for your loss".

And these people should be congratulated and rewarded for the fact that, despite their tragic loss, they "have continued working solidly"? Seriously, what the fuck?

Seriously how out of date are Unite (don't answer that)? The reason that Northern Rock employees have carried on "working solidly" is because, if they did not, it would have been them who would have been made redundant.

You see, Unite, that's what happens in the private sector when you are lazy, incompetent and generally shit at your job: you get fired. Now, I know that you union cunts are used to dealing with the public sector but surely you must understand that the rest of the economy—the productive part of it—doesn't work in quite the same way?

Fucking hellski...

* I only ask because I would like to see some return on my now-near-worthless RBS shares. I bought the shares with some of the large profit that I made from Apple, so easy-come, easy-go, I suppose. Even so, it's a little irritating to see £5k reduced to about £100...


Anonymous said...

On Question Time and in every comment I have read on this issue everyone is ignoring the rhino-sore-arse in the room. Bonuses are an established method of paying employees a given sum that is very “Efficient” for employers. No pension contribution is made. Bonuses MUST be a reward for effort and may not become an established payment. If bonuses are to be paid the employer must hold there was additional effort or they will have problems with the Inland Revenue.

Anonymous said...

don't totally agree Alistair.
"bonuses" in the private sector - related to "targets" - was already a failed system, and largely abandoned, when Blunkett suddenly thought, 20 years too late, that it "might" be a good idea.
Apart from the congenitally greedy (ie the financial sector) they were largely abandoned by 2000.
Blunkett though offered MOST public servants "bonuses" just for performing to contract. NR employees are now effectively public servants! they , like many public servants, only have to do a HALF DECENT job to qualify.

I once on a consultancy project caused some mirth, and a lot of realisation, when I observed that "your employees seem to think their salary is just an attendance allowance and actually working demands further reward". How prescient I was!

Bewick Northumberland

Sargon the Demented said...

Is anyone really surprised that Northern Crock should do this?

Angry as fuck, yes. But surprised? No. Not even a little bit.

As for fisking a trade union, DK, shame on you. They're such an easy target, it's like picking on the retarded kid in class...

Anonymous said...

Dear Sir,

I work for a software company where I am in charge of marketing. We had a record year in 2008 with record months in October and December when the recession was well under way. I had zero days off sick. My bonus was 2.8%. Am I in the wrong job?

Yours etc.
Assegai Mike

Curmudgeon said...

There are plenty of jobs where the basic salary is relatively low, but there is an annual bonus dependent on various individual performance factors, which are not necessarily related to the overall success of the business.

Surely if this is part of the Northern Rock employees' T&Cs they are entitled to it. It is not remotely comparable to profit-related bonuses in the City.

John B said...

"I work for a software company where I am in charge of marketing. We had a record year in 2008 with record months in October and December when the recession was well under way. I had zero days off sick. My bonus was 2.8%. Am I in the wrong job?"

Yes, you're a bloody idiot. Fuck the number of days you had off sick, that has no relevance whatsoever - but if you managed to achieve record sales despite the recession, and your bonus (you're counting commission as bonus, right?) was still under 3% then you shouldn't be working in sales.

"Apart from the congenitally greedy (ie the financial sector) they were largely abandoned by 2000."

Crazy lies. I've never worked in FS, I started work in 2000, and every job I've worked in featured a bonus element.

TheFatBigot said...

As you know, Mr Kitchen, I always hate to disagree with you but I think I have to on this one.

Whether we think bonuses are generally a good thing or a bad thing, if they are part of a contract they must be honoured.

By all means argue that someone employed on £20k a year with a potential £2k bonus should actually be on a fixed £21,500 (or whatever discount is appropriate to reflect that bonuses are not guaranteed). By all means castigate the fat cats for awarding themselves a new Ferrari despite the company heading down the pan. But don't criticise a company for honouring its obligations.

Neal Asher said...

Northern Rock employees are not to blame. The problem here is with the pricks who drew up the contract in the first place. The wording should have been yes, you will get a bonus if you do your job well, you'll still have a job.

Dr Evil said...

I walked past the absolutely huge RBS on Bishopsgate yesterday. It seemed like half the workforce were outside smoking. It was pissing down too. I expect they were celebrating their bonuses and getting ready to nip off to Dirty Dicks or some other local hostelry once the rain eased off. I also see the Merril Lynch bozo consultants that advised them re buying Amro bank (plus it's nasty big US surprise) got £11 million in fees, for what was essentially a huge fuck up for RBS. Yet another financial outfit rewarded for causing a huge mess.

Anonymous said...

As I understand it, these bonuses have been earned by paying the government back early, which means they are getting bonuses for reducing the amount of available credit during a credit crunch!

Anonymous said...

"As I understand it, these bonuses have been earned by paying the government back early"

They can do this because of all the house repossessions they have achieved.

Note that Brown gave NR two mutually exclusive objectives:

1) Do get as much money back as they can

2) House repossession to be minimised and be the last resort.

During this economic downturn (Brownturn), this is not the only brace of policies issued which have opposing goals.

Robert said...

We are told the people working at the Sharpe end the customer service you know the counter people, will get little or no bonus. The people who are middle management the advisers you know the one's that sold you the duff pension or the duff mortgage will get between 20% to 50% of wages, which I suspect will be about £5,000 to £10,000 upper management and director will get less then normal but the average payment is expected to be down 30% on last year and will average between £300,000 to £500,00 the reason given the bank cannot afford to lose these people to other banks.

Good one.

FlipC said...

Having a go at Unite for actually doing what they're paid to do (defend their members' interests); shouldn't you be applauding them despite disagreeing with what they say?

Rob Clark said...

Never had a fucking bonus in my entire working life (20+ years).

Also been made redundant 3 times at last count. You pick yourself up, go and get another job and accept it may not be quite as enjoyable or well-remunerated as the last one but at least you can feed the family (kids, eh, devil wish some other bastard would pay for mine as per our earlier conversation…

Where can I get a job where I get a bonus even if I’m really shit?

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