Good reasons for bonuses

First published in Letters

MANY people have written to say that the banks should not pay a bonus if they are losing money, and in the main the people who created this have paid with their jobs (including Gordon Brown and the Labour Party).

The people now with the task of turning this around are no doubt working hard and under greater pressure than any previous incumbent in the job and hence, to get good people, you have to pay the market rate. Yes, to pay someone millions does seem unfair but so does paying 22 men 50K a week to kick a bag of air around a piece of grass to lose football matches. Not one of the Bolton players would find it hard to get another job and, in a similar manner, if the guy at the RBS left tomorrow he would walk into another job in another country. It is what it is.

Last year, I lost $280,000 in one area of my business, but did this knowing that I was building a foundation that would eventually pay dividends. The director in charge got a bonus as she had built the business although, as yet, it was not making money. Her task was to minimise the loss, as will be the criteria of the people working in our banking system and, hopefully, on the way to a profit in the same manner If I have factory making widgets and my staff get an output bonus, just because the company overall is losing money, is it right that I should stop the bonus of the shop floor? It’s the same principle, just the amounts are different. People making money is not a bad thing. Hopefully, we all aspire to being successful and success should be applauded and encouraged.

Andrew Davidson Bury

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