Archive for the ‘Bonuses’ Category
By Olivia - Wednesday, November 18th, 2009
The Queen’s speech has, not unexpectedly, addressed the issue of banker’s bonuses. The proposed Financial Services and Business Bill will bolster the powers of the Financial Services Authority allowing it to tear up banker’s contracts which could promote risky behaviour. Key banks and financial institutions will also be obliged to draw up ‘living wills’ detailing how they can be wound up without threatening the stability of the overall system.
The Tories have reacted against this, arguing that the FSA already have sufficient powers to curb bank bonuses and this won’t affect payouts due this Christmas.
Time’s running out though, with approximately 80 days of Parliamentary business until the General Election, it’s touch and go whether the new bills will make it to the statute book before Parliament is dissolved,
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By Sarah - Monday, August 17th, 2009
The Chancellor in an interview with the Sunday Times this weekend said that he would consider new legislation to curb city bonuses which would go further than the FSA proposals. The new legislation would apply to all banks not just those which have been partly nationalised.
The legislation would allow the Government to control bonuses in all banks. It comes after the two banks signaled that its staff were in line for big bonuses this year. Goldman Sachs employees are in line for pay and bonuses averaging £430,000 and one new banker at RBS will get a guaranteed bonus of £7m!!
The Chancellor has said that it is quite clear that the problems we have today are caused by the fact that some traders were incentivised to take risks that neither them nor their bosses understood. You can read the full article about city bonuses here.
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By Olivia - Tuesday, August 4th, 2009
In recent months we have seen a decline in large incentivisation packages being offered to City high fliers, amongst public cries of ‘quite right so’. Today, however, sees a shift back to bygone days of City bonuses frequently exceeding basic salary. The Times has reported that three investment bankers at Barclays have been guaranteed two years’ worth of bonuses, despite government recommendations that such deals be banned. Barclays Capital has also hired about 200 new financiers and has guaranteed their bonuses for a year.
This makes for uncomfortable reading given that not so long ago Barclays benefited from billions of pounds of taxpayers support. And the response of John Varley, Chief Executvie of Barclays? He commented that ‘there is a clear expectation from customers that we employ the best people we can’. Hmmmm…!
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By Olivia - Tuesday, May 26th, 2009
First, a thank you to all at PJH Law and to all the clients I have met so far for such a warm welcome. If the first two weeks are an indication of times ahead, then the future is rosy!
Talking about happy employees, it’s not all gloom and doom amongst UK employees. More than 207,000 Tesco employees are celebrating today after scooping up share bonuses worth a total of £98m. Supermarket staff from checkout workers to store managers are eligible for the free shares representing up to 3.6% of salary. It’s good to see that the consumer spending slump and increased ’shopping around’ has not stopped Tesco’s retail growth and, most importantly, that some of the benefit has been passed down to employees.
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By Liam - Wednesday, February 4th, 2009
The EAT have handed down judgment in Small & Others v Boots. The case discusses at some length whether a bonus is a contractual right or a discretionary benefit. Payment of the former can be enforced by the Courts. Payment of the latter can not.
Referring to a bonus as “discretionary” is not enough on its own to place a bonus in to the latter category as it can be ambiguous as to whether the discretion relates to the decision to offer the bonus at all, the amount to be paid, how it is to be paid or when it is to be paid. Employers who do not wish to be bound by a bonus scheme must therefore make it plain that the bonus is not contractual and the employer has complete discretion as to whether to provide a bonus scheme at all and if they do decide to provide a scheme, that they have complete discretion as to the amount, the calculation of the amount, the method of payment, the date of payment and any other conditions for payment (for example a requirement to be in employment at the time the bonus is to be paid).
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By Philip - Wednesday, November 22nd, 2006
In Commerzbank AG v Keen the Court of Appeal has held that the Unfair Contract Terms Act 1977 can not be used by an employee to argue that a contractual provision that he was required to be in employment when a bonus was paid was unfair. The Act only applies where one party is dealing as a consumer and the other deals on its standard terms of business. The Court of Appeal held an employee does not deal as a consumer and an employment contract does not constitute standard terms of business.
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