Since the chief of RBS, Stephen Hester, has said no to his £900,000 bonus I think it's time to make the case that not all bankers bonuses are bad.
Hester is a unique case, he is head of a bank that is largely owned by the UK taxpayer. However, he's done well in his role to stabilise the bank and make it more secure and less prone to excessive/risky lending and casino-style investment tactics.
However, we've since learned that one of the traders at RBS is in line to receive a bonus of around £4m. And many folks will wonder what he (or she) did to warrant that kind of pay packet.
The fact of the matter is that most bank traders are paid on performance, they get a basic salary and then a bonus depending on how much profit they've made for the bank. In all honesty, most traders in banks earn less than £100,000 a year (which for some readers will still seem like too much).
However, if the high flying traders bring in millions of pounds worth of income to the bank, the profits of which are then passed to shareholders, is it so bad if they get a hefty bonus?
I'm not sure it is, and here's why:
You see, most traders are salespeople. They go out on behalf of the bank and peddle financial products to other financial and investment institutions.
In many ways they're very similar to almost any salesperson. If they don't sell they don't earn.
I used to work for a well known home improvements company. I was given a small basic salary and then very generous commissions on what I sold. The scope for earning a considerable income was definitely there. But if I didn't sell I didn't earn.
As it turns out I didn't sell and didn't earn and didn't last long in the job (I since realise that I was a little too honest to close the deal on the day).
So, if a bank trader brings fifteen million pounds of profit into the bank, is it unreasonable to give him/her a bonus of over a million? I don't think so, and I'm not sure the shareholders would be all that bothered either.
If owned a business and my top salesman brought in millions of pounds worth of sales and profits I'd not be shy in giving her a hefty bonus.
So, if someone is bringing in the profits for a business then bonuses aren't necessarily a bad thing.
Disagree? Feel free to tell me why by making a comment below:
Most Popular Posts
- How Business Speaking Can Help You to Promote Your Business
- Manage your inbox – don’t let it manage you
- Competence Is Not Enough To Convince Someone To Buy From You
- Making workplace technology predictions is hard work but I’m going to try anyway
- Quick tips for coping with work overload
- Call me old fashioned but…
- Make what you can sell, don’t sell what you can make
- Getting started with new work habits
- Who you hang around with can mean a lot to your success
- What should be on a business card?
Follow me on Twitter...
- Useful stuff from the archive: Manage your inbox - don't let it manage you http://t.co/LvvwLoulvb about 15 minutes ago from Evergreen Post Tweeter ReplyRetweetFavorite
- Abigail's been talking about 'Mazel tov Cocktails'. Not sure it's quite what she means, but it sounds good to me. about 9 hours ago from Hootsuite ReplyRetweetFavorite
- Useful stuff from the archive: How to work out your skills and help your career http://t.co/MCIQDB2uVj about 15 hours ago from Evergreen Post Tweeter ReplyRetweetFavorite
- Started a book on quantum physics this morning. Nothing quite like a bit of light holiday reading. about 19 hours ago from Hootsuite ReplyRetweetFavorite
- Useful stuff from the archive: Make your 'To Do List' more effective http://t.co/rls2bbhfQd 06:36:02 AM July 21, 2014 from Evergreen Post Tweeter ReplyRetweetFavorite
- Useful stuff from the archive: How to assess a business opportunity, part 3 - Money http://t.co/pe5HAkN9HM 11:57:22 PM July 20, 2014 from Evergreen Post Tweeter ReplyRetweetFavorite