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• Averaging bonuses over time will not work. What happens when I want to leave?

  Him 02 May 2008

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• Bonuses make bankers behave like rational self-interested individuals. If they behave badly it's because the performance criteria for awarding bonuses aren't correctly defined - say that bonuses will be paid for opening doors to PAs and everyone will fall over themselves to do that.
  
  But if you say bonuses will be paid for selling as many mortgage-backed products as possible, they'll do that instead. Simple really.

  Kermit the dog 02 May 2008

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• No bonus should be paid (or not paid) on the whim of a manager - whose bonus is based on how much of the pot he holds back for himself.  Compensations committees need independent scrutiny to challenge levels of bonus paid within a particular team. In an ideal world, that is.  And sacking employees before their bonus payouts as a sneaky means of increasing the pot for the survivors should be a hanging offence.

  Jane 01 May 2008

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• Bonus, HF fees,failing board remuneration, celebrity culture and pay- it all points to greedy capitalism strangulating life on this planet.

  Karen 01 May 2008

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• Mervyn King's criticism of bonuses is both foolhardy and astonishing. The financial services industry is a huge generator of the UK tax revenues, which go to pay Mr. King's salary. Over the past decade investment banks generated profitability per head which was second to none. In a people driven business it is inevitable that the people would want a part of that. If King and others try and deny them it, you will simply drive the people away.

  Thomas 01 May 2008

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• Incentives and commissions have been the driving force behind the widespread fraud in the mortgage lending industry. As a 30 plus year veteran of this industry, it has become apparent that the overall integrity of my industry has fallen to an all time low driven in part by personnel who do not understand the dynamics of mortgage lending and by management who also do not understand the elements of long term risk or the operations of the secondary market. All are motivated by production numbers regardless of them quality of assets or risk. As a result a lot of seasoned/experienced lenders are being omitted from the restructuring of the mortgage industry. These lenders have been through various market cycles and have far better understanding of the industry than the folks on Wall Street. The advent of the mortgage brokering shops has had a serious negative affect on mortgage lending to the extent that they think they should dictate to the primary lenders how they will produce loans for them which includes them informing real estate buyers how to avoid the primary lender's checks and balances for lending. Their prime motivation to be in business is get their fees as fast as they can.

  R Hunnicutt 01 May 2008

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• The whole comp stucture of "aligning" employees interest with shareholders interests by paying employees in stock is flawed.  A small proportion of employees (ie fixed interest /CDO traders) could hypothetically create billions of dollars in losses resulting in shareholder losses and impacting ALL employees, not just those responsible for the losses.  Even thought some employees may be generating high income for the bank, there stock interest can be totally eroded by other employees actions which they have no control over....no exactly equitable alignment of interests

  yeahright 28 Apr 2008

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• If you're Goldman Sachs and you're still sitting pretty, why would you change your comp structure?  Why would you submit yourself to change just 'cause your rivals screwed up the way they pay.. one size doesn't fit all.

  GTi 25 Apr 2008

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• Blaming bonuses for financial melt-down is crazy and lazy logic.
  Bear Stearns, did more than most bnks to pay people with shares, but still went down the pan

  Pops 25 Apr 2008

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• UBS has at least had the balls to admit that it's comp structure was partly to blame for its current woes. If others follow suit then the tide could well be turning I think. It's one thing for think-thanks and the like to complain about bonuses, another when the banks start doing it themselves.

  TheBiz 24 Apr 2008

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