Bonuses must be earned, not artificially concocted

It’s hard to argue with the principle of bonus clawbacks, so full marks to Lloyds Banking Group, which as exclusively reported in today’s Daily Telegraph has grasped the nettle and applied it to the 2010 pay packages of a number of senior executives, including the former CEO, Eric Daniels.

Their particular offence was the £3.2bn Lloyds was eventually required to provide for payments protection insurance mis-selling, a loss which coming on top of the disastrous HBOS acquisition and a subsequent state bailout does indeed make you wonder whether any bonuses at all should have been paid in respect of that year.

To act retrospectively is in most instances wrong in principle, but with bankers’ bonuses it is a bit different, as the short term profit generation on which such bonuses are frequently awarded can, as has plainly occurred in this case, turn into catastrophic long term loss. Bankers may think more carefully about the long term consequences of unbridled pursuit of the fee if they see such retrospective action more widely applied. To stand the test of public approval, bonuses have to be earned, not artificially generated.

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About OyiaBrown

Please send me, as a comment to this page, any old material you have for inclusion in The Daily Joke Alert - to help enable us all to have our fancy tickled regularly! Never mind the state it's in as I tidy everything up prior to publication. Don't let good material go to waste - and so much does. In the interests of the environment we should always try to re-cycle everything, especially jokes. You know that makes sense! You may find some historical stuff here, but this does not really matter as humor is fairly timeless.

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