Bankers, Your Bonus This Year Will Be That You Keep Your Job; (1) No Bonus: Bob Diamond, President of Barclays Bank, Is Having to Forgo Perks (2) A Bonus, but Only in Shares: Eric Daniels, CEO of Lloyds TSB, Has Helped Save HBOS (3) No Bonus: Michael Sherwood, Co-Chief Executive of Goldman Sachs in London

The Evening Standard (London, England), November 24, 2008 | Go to article overview

Bankers, Your Bonus This Year Will Be That You Keep Your Job; (1) No Bonus: Bob Diamond, President of Barclays Bank, Is Having to Forgo Perks (2) A Bonus, but Only in Shares: Eric Daniels, CEO of Lloyds TSB, Has Helped Save HBOS (3) No Bonus: Michael Sherwood, Co-Chief Executive of Goldman Sachs in London


Byline: GIDEON SPANIER

AT A cocktail party in a stuccoed Notting Hill home, an investment banker is looking glum. It's hardly a surprise.

He has been sounding gloomy all year long as the markets tanked. But now he is clutching a letter from US Congressman Henry Waxman to the chief executive of JPMorgan, Jamie Dimon, asking for details about wages for his staff "broken down by salaries, bonuses (cash and equity), and benefits" for the last three years. What's more, Waxman wants "documents to show all policies governing the granting of the bonuses" and "a description of the reasons for the year-to-year changes".

"You know what this means," says the Notting Hill banker as he and his City friends pore over that Waxman letter, sent a few weeks ago to the heads of his and eight other US banks. The politicians have handed over hundreds of billions of pounds of taxpayers' money to recapitalise the banks. Now comes the quid pro quo.

These banks can no longer be secretive on the grounds of commercial sensitivity, hiding every detail about bonuses except for its board directors. Bankers' earnings are being held up to public scrutiny like never before.

No British political leader has yet asked publicly for such a level of detail as Waxman, chairman of the powerful Committee on Oversight in the US House of Representatives. But as Richard Snook, senior economist at the Centre for Economics and Business Research, says: "It is just not politically feasible that any British clearing bank is going to pay out large bonuses."

Already the directors of some of the top banks on both sides of the pond Barclays, Goldman Sachs and UBS have announced in recent weeks that they are waiving their bonuses. They had little choice in the matter It means that one of the City's star earners, Barclays president Bob Diamond, the man who snapped up the choice parts of Lehman Brothers in September, could collect just his base salary of [pounds sterling]250,000. Last year he earned [pounds sterling]21 million in bonuses and incentives.

Similarly, Michael Sherwood, co-chief executive of Goldman Sachs International in London, is set to earn a basic salary of $600,000. Last year he almost certainly collected a compensation package in excess of $10 million. The top Goldman director in London earned $23.4 million last year

This matters now because the end of November has traditionally marked the start of the annual bonus season..

Goldman and Morgan Stanley, each of which employ around 5000 staff in London, end their financial years this coming weekend. Those fallen Wall Street giants, Lehman and Bear Stearns, also used to end their years on 30 November a reminder of how much has changed.

Most other banks will wrap up the year's business by 31 December. In previous years bosses would be totting up fat profits, ready to hand back around 45% of revenues in compensation to staff.

The bonuses are announced within weeks and paid the following month.

It won't be quite like that this year. The CEBR estimates that annual bonuses to City bankers will slump 60% to [pounds sterling]3.6 billion from a peak of around [pounds sterling]8.8 billion two years ago. Bonuses at the end of 2007 were still high because it was a decent year, despite the credit crunch starting.

Now many bankers are just grateful to have a job. And it is no coincidence that so many of the big banks have been announcing huge lay-offs in recent weeks. Bosses need to cut staff numbers in any case but it also makes sense when bonuses will soon be due. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Bankers, Your Bonus This Year Will Be That You Keep Your Job; (1) No Bonus: Bob Diamond, President of Barclays Bank, Is Having to Forgo Perks (2) A Bonus, but Only in Shares: Eric Daniels, CEO of Lloyds TSB, Has Helped Save HBOS (3) No Bonus: Michael Sherwood, Co-Chief Executive of Goldman Sachs in London
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.