Bankers to seek pay cap renegotiation

[Gatelodge]

Some bankers plan to renegotiate the Government cap on executive pay, RTÉ News has learned.

While banks say they are examining the details of the pay cap, it has emerged the reductions in pay for chief executives and chairpersons will have a knock-on effect on all senior management.

A major concern expressed by senior executives is that big cuts in pay will have a similar effect on their pensions which is based on their final salary.
rte.ie/business/2009/0403/banks.html

The pay cap will affect their pensions? Tough shit

[mr_anderson]

Im all in favour of re-capping executive pay … lower !

[jonny]

Oh oh, should have got a DC pension like the rest of us poor saps.

Whats that you say, they’ve lost shit loads on the ISEQ? Shit, you better get in touch with the Irish Association of Investment Managers.

What’s that you say, you’re a member? Well, that should make it straightforward then.

[BudFox]

I don’t understand how these guys possibly have any negotiating power. These Irish “bankers” all follow the same unimpressive pattern :qualified accountants who graduated in the 60s and 70s and then slowly worked up the greasy slope helped by connections and then made big profits off one idea - leveraged property loans. They all follow the Bertie,Haughey,Fitzpatrick prototype. These guys have no transferable skills to offer other industries or even the financial sectors in other countries and should be left exposed as the frauds they are.

[Lefournier]

[Now] I…understand how these guys… have… negotiating power. These Irish “bankers” all follow the same unimpressive pattern :qualified accountants who graduated in the 60s and 70s and then slowly worked up the greasy slope helped by connections and then made big profits off one idea - leveraged property loans. They all follow the Bertie,Haughey,Fitzpatrick prototype. These guys have no transferable skills to offer other industries or even the financial sectors in other countries and w…ould [otherwise] be left exposed as the frauds they are.

[The_Unwelcome_Guest]

Typical Irish Banker…

[daltonr]

Getting paid less will affect bankers pensions?

oookaay.

And what does knocking 99% off the value of banks do?
That affects pretty much EVERYONES pension doesn’t it?

Tell you what, when my BofI shares hit 10 euros
I’ll vote to pay you more.

fair?

-Rd

[Lefournier]

The bankers are feeling the squeeze

Serious tensions are emerging between the government and the banks over new pay recommendations which the government has imposed on the sector.Bank sources said the plan would be unworkable as it would have a major impact on salaries across the banking sector.

Anything that impacts on bank salaries is “unworkable”, unless of course it involves the payment of outrageous bonuses

A key issue for banks is that the proposed pay level for chief executives is actually lower than the current pay level for other senior executives, many of whom would face significant reductions under the new proposed structure.

This means they were willing to rein in the top dog but Lenihan’s plan would put the squeeze on a lot more.

sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=40853-qqqx=1.asp

[The_Unwelcome_Guest]

This means they were willing to rein in the top dog but Lenihan’s plan would put the squeeze on a lot more.

Oh shock… Decision leads to predictable consequences…

Bring me a dog, so I can bite it…

[optimus_1]

Not all bankers are incompetent.

If you pay peanuts you get monkeys.

We have had enough monkeys and idiots who brought us where we are.

You must pay for quality. C’est la vie.

[The_Unwelcome_Guest]

You must pay for quality. C’est la vie.

I’d rather not. Based on the evidence. We’ve overpaid for the most cynical, gratuitous and overbearing fuckers money can buy.

You might think that laudable. In fact, your value system decrees it.

But personally, I’d have a pitchfork handy as the bonus option in this scenario.

[Green_Bear]

Not all bankers are incompetent.

If you pay peanuts you get monkeys.

We have had enough monkeys and idiots who brought us where we are.

You must pay for quality. C’est la vie.

https://www.oreillynet.com/digitalmedia/blog/images/stupidMonkey.gif

The problem is the banking sector both in Ireland and globally is stuck with monkeys who refuse to take their hand out of the cookie jar. The amount people are paid does not reflect the quality of their work, unless you are a worker on pay for performance incentives with sound quality controls or metrics. The monkeys in Irish financial institutions would be swinging from lampposts now if the government had not stepped in guaranteed their debts.

The reason for the high compensation at bank director level is not to be seen as “weak and shit” by their underlings in the corporate or bureaucratic structure.

See Steven Levitt’s lecture for more detail
ted.com/index.php/talks/stev … omics.html

[Lefournier]

This means they were willing to rein in the top dog but Lenihan’s plan would put the squeeze on a lot more.

Oh shock… Decision leads to predictable consequences…

Bring me a dog, so I can bite it…

From the bankers’ perspective, I think this was neither predictable nor planned, TUG.

If Lenihan had accepted the CIROC recommendations that would have left a lot more headroom for the other executives i.e. the CEO would have to “make do” with the same pay at the other top execs. but now everyone will “feel the pain”

The CIROC Report is hard-hitting and highlights the recent advent of fat salaries and bonuses in the Irish banks:

Up to the year 2000, Irish financial institutionsadopted a conservative policy in relation to remuneration. However, that policybegan to change and had developed dramatically by the 2003/2004 period. Information provided to us suggested that
annual bonuses havedoubled approximately in the last ten years, influenced by a similar growth in the UK.

finance.gov.ie/documents/publications/other/2009/Cirocrept.pdf

In case anyone starts to blame it on the Brits, the Report notes an important contrast with the UK:

However, in the UK there was a strong element of deferral of bonuses but this did not become general practice in Ireland.

i.e. the Brits had a longer-term perspective but our greedy bastards wouldn’t wait a decent interval to get their hands on the loot.

You’re spot on with your reply to the “pay peanuts and get monkeys” argument, TUG. The CIROC report puts it more subtly:

The view has been expressed that high levels of remuneration can be justified by reference to the need to recruit and retain managers of the required calibre. However, the information available to us indicates that, in the period of substantial
growth in remuneration, there were no difficulties of recruitment and retention at senior management levels. In many cases senior management appointments were made from within the organisation.

Translation: the salaries were so far beyond what was needed to attract talent, our greedy bankers were fighting to keep outsiders away (step forward Mike Soden!).

I think CIROC anticipated the problems that are now arising with the pay of other senior bankers:

5.12: The remuneration of other executives should also be adjusted to take account of the revised salaries for chief executives. The reduced salaries for executives should have regard for the need for adequate headroom between them and the chief executive.

The easy option for Lenihan would have been to accept the CIROC recommendations but I think he felt a political need to be seen to go further i.e. he couldn’t defend these salaries while pouring taxpayers’ money into the banks, so he needed to appear ruthless.

I wonder in fact if CIROC deliberately left him with scope i.e. pitched their reduction somewhat above what they knew he would want so that he would look tough on bankers?

In any case, this is a real fight and if Lenihan gets his way it will be the first time the Government has imposed itself on the banks.

[The_Unwelcome_Guest]

It was predictable. Give me a break, Lef…

[Dreaded_Estate]

How have the American bankers managed with a lower cap?

[The_Unwelcome_Guest]

How have the American bankers managed with a lower cap?

On a large bed piled with money with many beautiful ladies.

[Lefournier]

It was predictable. Give me a break, Lef…

Was it predictable that Lenihan would undercut the CIROC recommendations?

[The_Unwelcome_Guest]

It was predictable. Give me a break, Lef…

Was it predictable that Lenihan would undercut the CIROC recommendations?

It was / is / and forever shall be unimportant.

[Lefournier]

It was predictable. Give me a break, Lef…

Was it predictable that Lenihan would undercut the CIROC recommendations?

It was / is / and forever shall be unimportant.

I disagree (and clearly so do many senior bankers) and I approve of Lenihan’s actions (clearly many senior bankers do not ).

Apart from hitting bankers where it hurts, the cap puts the Government in direct conflict with the bankers. So far the bankers have lead the Government by the nose from the moment they got the State Guarantee. If Lenihan can prevail on the cap, it will be a psychological victory but will also expose the nonsensical claims which bankers used to justify their pay and bonuses.

In the longer-run, what matters most is whether outsiders will be brought in with the expertise to expose the carry-on of these bankers. I think the bankers will squeal but, when faced with a choice, they will take the pay cut rather than leave a vacancy which an outsider might fill.

[wii4miinow]

Not all bankers are incompetent.
If you pay peanuts you get monkeys.

I agree not all bankers are incompetent.
But show me 6 CEOs or Chairpersons in Ireland who are?
Then if you already have monkeys then perhaps you should pay them a monkeys wage. Peanuts for them I say.