Phil MeekinView Profile
I have followed with interest the debate about bank staff bonuses. After spending some 30 years in commercial banking I feel that I am entitled to an opinion. (I should add at this point that this is my own opinion and not necessarily that of Wilson Field Ltd).
Much of the comment in the media seems to surround whether or not the staff on the ground should receive a bonus. In some instances it forms part of their contract of employment but in other cases it is discretionary.
The banking industry is in a unique position in so much as in commercial terms we (as a nation) cannot afford to let it collapse. In a sophisticated economy such as ours it would lead to total chaos. It would result in even more loss and damage than we are already experiencing. So whilst in these hard times the law of the commercial jungle applies. Due to this, many businesses have fallen by the wayside and the government has had to step in to protect and preserve the banking system. In doing so it has saved a number of banks which otherwise may have collapsed.
So turning back to the thorny issue of bonuses, generally I believe that staff who work hard and achieve or exceed what is expected of them should be rewarded. I have no doubt that many staff in banking have worked hard and so should they receive a bonus? – in my opinion a firm “no”. Bonuses should only be paid if a company can afford to pay them. The only reason that a number of banks still have a presence is that they have been artificially propped-up with public funds. There are thousands of people in the UK and beyond who have worked hard and achieved more than what was expected of them. Their reward in many cases – redundancy, through no fault of their own. In many cases companies are failing either as a consequence of falling sales due to the shrinking economy or as a knock on effect of another trading partner “going bust”. Much of the damage to the economy has ironically been exacerbated by the banking industry worldwide.
One weak threat made by banking chiefs was that if bonuses were not paid the best staff would “walk”. Realistically there have already been job losses in the banking profession and the market is likely to see a glut of unemployed banking staff chasing a limited number of jobs. At a time when few are unaffected by the recession, having a job should be more important than not receiving a well-deserved bonus.