So the EU now thinks it is qualified to set limits on how much private businesses pay its workers?
The EU is proposing a cap be set on banker's bonuses. This is to be at one times annual salary or two times if there is explicit shareholder approval. While this is the typically fatuous nonsense that we have come to expect of the EU, this does betoken a worrying step into further interference in business and all that this means for the acceleration of Europe's economic decline.
These bankers are smart people - you may not like them, you may think that they are over-paid, but they are not dumb. Imagine the scene at a meeting between a top FX trader and his banker boss during a future 'bonus season' meeting
OK, so maybe the Trader wouldn't actually be that concerned about the bonuses for his/her team but I can imagine that this is how it would be played out.
Or, in the EU world.
Here's an alternative idea.
I know, One rule for them and one for the rest of us.
I fear that this proposal though, is a sign that it may be too late for Europe. Unemployment is soaring, the people of the southern countries are truly suffering but rather than address these issues and examine at the rot causes, the EU decide to be populist and bash the UK, at the same time by targeting a small, in EU terms, sector of the economy. OK, it's a successful one but that won't stop them.
Be afraid, first its banker's bonuses, then all bonuses and moves on to the Co-Op divi!
The EU is proposing a cap be set on banker's bonuses. This is to be at one times annual salary or two times if there is explicit shareholder approval. While this is the typically fatuous nonsense that we have come to expect of the EU, this does betoken a worrying step into further interference in business and all that this means for the acceleration of Europe's economic decline.
These bankers are smart people - you may not like them, you may think that they are over-paid, but they are not dumb. Imagine the scene at a meeting between a top FX trader and his banker boss during a future 'bonus season' meeting
Trader: Well that was a great year - my department and I made the bank a ton of money and contributed more than 50% of the bank's profits.
Boss: Yes, well done! Now you know we cannot give you a bonus of more than one year's salary, so what we are going to do is this. In two week's time, we will be paying out bonuses. Today, I am tripling your base salary, for a two week period and at the end of that period it will revert to the current level. This will allow us to recognize your contribution. OK?
Trader: Well I suppose that would work for my team, but I was thinking more like quadruple, for myself.
Boss: OK agreed. So now you can ditch your overtures to Rival Bank Co in Dubai, (or Zurich or Singapore) and get that new place in Gloucestershire, yes?
OK, so maybe the Trader wouldn't actually be that concerned about the bonuses for his/her team but I can imagine that this is how it would be played out.
Or, in the EU world.
Trader: Well that was a great year - my department and I made the bank a ton of money and contributed more than 50% of the bank's profits.So the above is a bit of fun but seriously, the EU setting caps on compensation? Doesn't quite mark the end of private enterprise but it does put us on a slippery slope.
Boss: Yes, well done! Now you know we cannot give you a bonus of more than one year's salary because of the cap on bonuses, so what we are going to do is this. The turnip harvest is looking pretty poor this year but we have managed to secure a corner on production. There was some problem with the latest Five Year Plan, when we over produced tractors but under-produced tractor engines - you know how these things work. Anyway, we will pay you a bonus up to the maximum and then grant you options on the turnip harvest. Come September, you will be making tons of money or before if you decide to cash them in early. What do you think?
Trader: Well I suppose that would work for my team, but I hear that the Executive Board are being offered options on sugar beet futures as well. I was thinking some of them would sweeten the pot, for me.
Boss: OK agreed. I will inform the board and the EU Commissar. By the way, a little birdy tells me that left foot shoes could be big next year. Some glitch in the Plan has seen an over-production in right-foot shoes. Keep it under your beret , though.
Here's an alternative idea.
- How about politicians in the EU and in the UK, put a cap on their own compensation?
- How about this is set at two times their respective country's average wage?
- How about these same politicians get taxed on this, just like all of the people that they supposedly represent?
- How about 50% of the EU politician's salaries and those of the EU Commissioners and bureaucrats be withheld until such time as the EU publishes a set of audited accounts?
- How about parts of their salary being subject to claw-back when they make a mistake - there are lots of mistakes out there - failed IT systems on which governments waste billions or more than 1,200 people die at Mid Staffs, for example.
I know, One rule for them and one for the rest of us.
I fear that this proposal though, is a sign that it may be too late for Europe. Unemployment is soaring, the people of the southern countries are truly suffering but rather than address these issues and examine at the rot causes, the EU decide to be populist and bash the UK, at the same time by targeting a small, in EU terms, sector of the economy. OK, it's a successful one but that won't stop them.
Be afraid, first its banker's bonuses, then all bonuses and moves on to the Co-Op divi!
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