London about to kick off again?

[G4Z]

Because what time do you put someones bonus over. As someone who's worked in investment banks, hedgefunds, on the trading floor (not some back office roll) I think that far too many traders are given short term rewards. Ultimately I don't think their bonus should be paid, until the pnl has been actualised.

By this is mean not until the posistions have been closed, and the money made for 100% certain.

The problem is this isn't very praticle, what if someone buys a Disney Bond (yes, Walt Disney is a text book example in this) that is issued over 50 years.

Banks are so large, and complex its not fair to reward them with general stock, its akin to paying everyone the same regardless how well they perform, a race to the bottom soon emerges.

I actually agree with this, I used to work in sales myself and saw this happen. The bonuses drive the behaviour and that is invariably short term rewards. For example where I worked there were deals done that basically made the company no money but had large contract values so were chased down to completion by sales poeple in order to earn the bonus even though the company made nothing or even lost money on the deal.

In any case, I don't think there is really a case for regulating down to that level. The simplest solution is that when a bank or other business is inadequate in policing this stuff itself and then it fails. DONT THROW GOOD MONEY AFTER BAD AND LET IT FAIL.

What is our investment in HBOS and Lloyds worth at the moment..?

[Andeh13]

I've going to leave this here and leave this thread at this stage.

http://news.bbc.co.uk/1/hi/8417205.stm


And not just for the chart - but the questions is poses about reactions to the answer.

An interesting read. I would also add that those top few % are less likely to cost the country money. Their children will no doubt go to private schools, private health care, cars of a higher quality, less likely to be committing crime, less likely to be using the NHS or claiming any of the government benefits/hand outs. That is before you go about their spending on all of the above & the amount of tax that would push into the economy.

This is an area where I am very much against the protesters. I am all for punishing those banks & bankers who took excessive risks (and have been referring to when I mention my support for them), but the minute they start hammering on the door of the ''rich'' I quickly loose a lot of patience with them.

Those earning the big money have usually worked very very hard to get it. Why shouldn't they be allowed to keep it? You don't earn £100k a year for picking your nose and watching daytime TV, nor do you afford big houses or cars for being fat, dumb and lazy. I would also argue that those earning that sort of money will be working far longer hours, and longer weeks then anyone else, as well as under more stress and pressure from all angles. Why should they be punished, or have their income cut because they are earning far more then someone else?

It is only the big salaries and luxury life styles that make people (like me, and no doubt many of us here) work as hard as we do, and stay in education as long as we have. I hope to one day be earning and KEEPING that sort of money, and It is with those thoughts that I work hard.

[G4Z]

I've going to leave this here and leave this thread at this stage.

http://news.bbc.co.uk/1/hi/8417205.stm


And not just for the chart - but the questions is poses about reactions to the answer.

Very interesting however if the top 1% own 50% or more of all the wealth anyway then paying 24% of all the income tax is really nothing is it?

I realise that is simplying a lot and taking no account of other taxes but honestly 25% of all income tax payed by the top 1% is not an impressive figure to me in the slightest. If they paid 60% of all of it I might sit up and take notice.

Even then, its not a true representation of everything and I think you will find that proportionally the top 1% pay less overall. Even somebody on say 80k pa pays less proportionally than somebody on 20 - 30k. source -A SURVEY OF UK TAX SYSTEM 2009
Stuart Adam and James Browne - http://www.ifs.org.uk/bns/bn09.pdf (page 36 fig 3)

[G4Z]

An interesting read. I would also add that those top few % are less likely to cost the country money.

you what??!?!???

Banking crisis for one thing, though they do cost this country in many many ways other than that. If you need me to think up a list for you then I really am concerned that 'they got to you too!'

[Agent]

An interesting read. I would also add that those top few % are less likely to cost the country money. Their children will no doubt go to private schools, private health care, cars of a higher quality, less likely to be committing crime, less likely to be using the NHS or claiming any of the government benefits/hand outs. That is before you go about their spending on all of the above & the amount of tax that would push into the economy.

This is an area where I am very much against the protesters. I am all for punishing those banks & bankers who took excessive risks (and have been referring to when I mention my support for them), but the minute they start hammering on the door of the ''rich'' I quickly loose a lot of patience with them.....

Ermmm....could you show me where the protesters are, who are protesting against people paying their share?

I have not seen one article, or one person being interviewed that have been against people with high wages on its own. It seems pretty clear from the articles out there that people have an issue with the way the financial system is being run as a whole:

http://www.bbc.co.uk/news/uk-15322134

She said: "They may not be a coherent group but they appear united in their goal - to criticise the UK's bankers and speak for what they describe as 'people over profit'."

One protester, Peter, said: "We're occupying and opening up this space directly next door to an institution which gambled with our economy recklessly and criminally."

and so on....

I've not heard one person say something along the lines of "Don't pay people high wages". The protest seems to be firmly about the way the economy is being gambled by institutions.
You seem to totally misunderstand why people are protesting based on your post.

[format]

This is the area where I come unstuck in terms of evening it out. In terms of responsibilities, work and effort put in, and the effort in getting to those positio . CEO, directors, company heads more often not deserve the big salaries, and bonuses due to the work they put into the companies. There is a reason the salaries are so big it is because so few people can do that they do, and do it so well (in theory). Reducing their pay means they go elsewhere, and have to be reduced with inferior people...making the company worse off.

Do they work 350 times harder than the average worker?

[TheAnimus]

Do they work 350 times harder than the average worker?

No but their impact is.

Who turned round Apple? A disgusting bully? Or the Cleaner?

One of them increased the value of the firm by forty odd times.

If a cleaner does a really good job vs a half assed job, what difference does it make? Almost none, they can either just hire another cleaner, or even fire them.

Then you get the other issue. What about when someone wants someone but they just don't really need the money. If we're truely honest, and willing to make significant sacrifices, I doubt many here need half the money they have. Heck by having access to the forums your already probably a first worlder. The thing is many of you won't agree with this statement, but thats because your the kind of sick individual who thinks that a toy status symbol phone, which is twice the ANNUAL salary for so many people, is an essential, not a luxury.

But many people aren't so money grabbing. Plenty are in the situation were their kids have left home and are having a good life on their own, they've got enough for retirement, they don't need as much as they earnt whilst they had them. Why work as hard?

I'm trying to take more time off to work on my flying and do a little bit of travelling, I've made some good investments (some bad ones too mind!) and you know what, I can afford to take 6 months off. However someone wants me to help turn round a project. I don't care, its boring, but its a project which has had $15M squandered on it, they need to try and get some value, they know me, my track record with other projects...... See where I'm going with this, I genuinely don't want to, so when I said no, they offered an obscene amount more than the last time I worked with them, I've still said no as I don't want to go to new york, and the money wouldn't make as much good in my life, as the bad of having to uproot and move..... Imagine what it must like for the millionares, or those who don't have a mortgage / family who need supporting. How do you get them to take the job? Is it worth the risk of chancing it? Or do you throw more money at them? Or in your strange world do I get forced to work for them?

[G4Z]

I didn't say essential, I said commodity. And it is.

As for the rest of it.. it just doesn't follow. In reality your skills are not as rare as you seem to suppose in the example. If you don't need the money then why work and take that opportunity from somebody who might really need it?

[roachcoach]

As for the rest of it.. it just doesn't follow. In reality your skills are not as rare as you seem to suppose in the example. If you don't need the money then why work and take that opportunity from somebody who might really need it?

I said I was done (and am) but his point is that the traditional behaviour of business when faced with a quantifiable, known short term issue is to get someone good with a known proven track record and (for the most part) damn the cost in to fix it.

If you throw a grand a day at a seriously good contractor for a short duration project and it delivers, it is often far less expensive than a project bombing/mishandled/involving a FNG/gambling on someone else.

You don't need super rare skills, just a degree of specialism and a history with the employer wanting your help. This kicks income up at odds with the rest of life, if that makes sense



And so long as I'm back, the beeb link wasn't so much chart as raising the notion that we do not have enough hard facts to hand easily to make a formed, considered opinion.


Oh also, @Format the earnings multiplier is a poor measure. There's stress levels, hours worked, home life sacrifices, responsibilities and most of all - skills. Is the gap right? I don't know but I do know that's a poor measure to use. Imagine football club cleaners vs premiership player wages.

[G4Z]

I understood the point, I just think its a really rubbish point and entirely inconsequential set of circumstances in the big picture. Certainly not a reason for maintaining the status quo regards income inequality.

[roachcoach]

I was going to edit to add, but it'll cross posts now so my (last) final words on the topic.

It's a massively complex issue that too often is vastly over simplified. You can't just look at salary in isolation and be done with it.

[Andeh13]

you what??!?!???

Banking crisis for one thing, though they do cost this country in many many ways other than that. If you need me to think up a list for you then I really am concerned that 'they got to you too!'

Some of them in big money financial jobs have caused problems but on a whole the majority of people earning the top few % (going off what was said previously in this thread, around £50k+ a year is it?) are not going to be tax dodging, greed harboring folk. A few bad eggs in the financial district shouldn't spoil it for everyone who is a company CEO or is being paid a respectable bonus for their wage/job.

Do they work 350 times harder than the average worker?

Over a life time, including education, job hunting and working there way up...they will have worked categorically far far far harder then those cleaning. They made the right decisions throughout their life, took a path harder then most and are being rewarded for it. They are only being paid that amount of money because someone (shareholders, board of directors etc) feel they are worth that amount and contribute enough to the company to justify it.

Ermmm....could you show me where the protesters are, who are protesting against people paying their share?

I've not heard one person say something along the lines of "Don't pay people high wages". The protest seems to be firmly about the way the economy is being gambled by institutions.
You seem to totally misunderstand why people are protesting based on your post.

I am generalsing/extrapolating over the whole ''99% vs the 1%'' debate, and should have said ''if and when they'' as IMO it is only a matter of time before it is anyone earning £xxx,xxx gets the finger pointed at them and cries of foul play & not paying enough tax are heard. From Wikipedia;

''The participants are mainly protesting social and economic inequality, corporate greed, as well as the power and influence of corporations, particularly from the financial service sector, and lobbyists over government.''

I am wary over where the protesters draw the line at greed vs working hard to get what one wants (be them company CEO or high up in the financial industry). I worded the original post poorly and should have said I support them in their main goals (political corruption, excessive risk taking etc) but the minute they start going down the route of 'economic inequality, lets forcibly balance the books by taxing the rich more and giving it to the poor', I will quickly loose sympathy for them.

edit:

TL;DR: In short, I am not defending the top 1%, but the top 2-10% who may suffer due to the bad eggs at the top, and possible over reaching by the ''99%'' who want widespread social & economic changes at the bottom.

[TheAnimus]

I didn't say essential, I said commodity. And it is.

You said its not a luxury, or that you don't think of it as such, or is it only when someone else has something shiny?

I'm somethings not a luxury, its a necessity surely?

As for the rest of it.. it just doesn't follow. In reality your skills are not as rare as you seem to suppose in the example. If you don't need the money then why work and take that opportunity from somebody who might really need it?

In reality you have no idea what the skills I'm talking about are.... Lets just remember that. I also know roughly how many people have done something similar before.

I understood the point, I just think its a really rubbish point and entirely inconsequential set of circumstances in the big picture. Certainly not a reason for maintaining the status quo regards income inequality.

So why is it a rubbish point? A company can waste a LOT of money? An external can come in and fix it up, and charge a percentage of the money saved. This happens all the time. But sometimes they have to out bid for the external, that isn't always another firm.

Now why is that inconsequential, its an example of one of the many many cases where this happens and wages get accelerated by a significant multiplier. How can they motivate me to do something I don't want to do? In your world would they force me too? Or simply take another chance (remember the problem in the first place, was caused by this, it wasted money and resources.....).

Its very hard to train a CEO, plenty of people frown on MBAs as having no real world experience. That is why people are willing to out bid for someone with a track record, a known entity.

[directhex]

Over a life time, including education, job hunting and working there way up...they will have worked categorically far far far harder then those cleaning. They made the right decisions throughout their life, took a path harder then most and are being rewarded for it. They are only being paid that amount of money because someone (shareholders, board of directors etc) feel they are worth that amount and contribute enough to the company to justify it.

350x. Think about that number. Mull it over in your mind. "selling duff mortgage-backed securities is three hundred and fifty times harder work than cleaning toilets" is your argument. Really? Really really? Maybe they work 350x more hours per week?

Actually, I've long thought that the way we approach paying people is broken - jobs like sewage worker should earn top dollar, and jobs like footballer should earn pennies.

[directhex]

The funny thing in this "discussion" is the straw man erected to argue against.

I'm going to go for some elder wisdom here. From someone born in the 1800s, with a far better grasp of basic economics than most of the people moaning here about how owning an iPod prohibits you from complaining about bailouts for banks paid for by people losing their jobs and homes largely due to those banks.

"There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible." - Henry Ford

Successful companies do NOT exist in a vacuum. Your success eventually depends on the success of the lowest of the low. Wal-Mart are starting to suffer - by the systematic movement of all capital upwards, there aren't enough people with disposable income to sustain demand for goods and services, and without the demand for goods and services, there's no way for many companies to turn a profit - and without companies turning a profit, banks run out of non-fraud-based ways to earn their money.

Without well-educated citizenry, your choice of employees is poor. If you aren't helping to educate the citizenry - typically though direct or indirect funding of educational establishments, then you're ****ed long term.

Without stable and reliable infrastructure, your employees can't move about and neither can your goods. If you're set up somewhere without sensible infrastructure an investment in its maintenance and improvement, then you're ****ed long term.

Ford realised that to make his company a success, he needed everyone to be a part of that success - in 1914 he doubled the minimum wage paid to staff, and brought in a profit-share scheme such that every employee would see some reward for doing their part for a better year.

It's something we've basically abandoned, on a global basis.

Wages for normal schlubs, adjusted for inflation, haven't changed for decades. Executive pay has gone up by several orders of magnitude. Are CEOs working orders of magnitude harder than they did in the 90's? How about normal people? Hell, in the US it's normal nowadays for people to work 60-hour weeks just to stay afloat, without any chance of seeing a doctor if they get ill - does that sound reasonable, should we aim for that here to ensure a few quid more for bank bonuses?

The system is unfair, it's stacked, and it's paid for - with big-money donors playing a large part in the political process and helping to ensure laws and tax regimes which benefit them whilst harming those at the bottom. That's a horrible, short-sighted practice - and if it continues, those at the top will build their peaks so high that they bankrupt themselves.

[TheAnimus]

I'm going to go for some elder wisdom here. From someone born in the 1800s, with a far better grasp of basic economics than most of the people moaning here about how owning an iPod prohibits you from complaining about bailouts for banks paid for by people losing their jobs and homes largely due to those banks.

No, someone who is complaining about business praticies, capitalisim, yet chooses the example which is one of the worst offenders. As someone said, you have less patientce for someone at an anti-furr rally wearing a seal coat because they don't like the cold.....

But what I'll ask you know is who are "those banks" which banks exactly are responsible for this mess, your happy to tar them all in the same brush? Which ones exactly? Hedge funds too?

The system is unfair, it's stacked, and it's paid for - with big-money donors playing a large part in the political process and helping to ensure laws and tax regimes which benefit them whilst harming those at the bottom. That's a horrible, short-sighted practice - and if it continues, those at the top will build their peaks so high that they bankrupt themselves.

So why are we having tax breaks rising for someone who earns <£10k, tax credits for them. Yet 50% tax, no tax credits, no benefits for someone who is on a lot of money? Reality and the way your viewing it doesn't stack up.

Plenty of people in the top 1% would have benefited more if the banks had collapsed..... Myself included.