Northern Rock bonus/loan repayment

[GaryPanic]

for our American friends Northern Rock was nationalised over a year ago

they have repaid the 50% of the loan back to the goverment and for this have recieved a 10% bonus -


in my opion - this is a pretty good deal for the goverment
they have got back 13 billion sterling but it has cost them 8 million

13,000,000,000 against a loss of 8,000,000
or a write of of around 0.06% (I think I have my figures right )

if i was a business person and could have 50% of my debts written off by workers working hard -recovering monies due then i would be happy with 0.06% write off - full story below ( lifted from the BBC)


The decision to award most staff at nationalised bank Northern Rock a 10% bonus is "indefensible", the Liberal Democrats have said.

Treasury spokesman Vince Cable said: "This is bringing the worst of the City bonus culture into a public body."

But the Unite trade union argued the bonus, which follows an agreement with the Treasury, was a fitting reward for "hard work and dedication".

Gordon Brown's spokesman said it was a "matter for Northern Rock".

Loan repayments

The bonuses are due to be paid to staff on Friday.

Northern Rock was nationalised in February 2008 after a run on the bank in 2007.

Once Britain's fifth-biggest home loan provider, it was taken into public ownership after it failed to find a suitable buyer from the private sector.

A Northern Rock spokesman refused to be drawn on how much money was being paid out, but pointed out that the staff-wide bonus scheme had been announced in October.

He also stressed that no executives or senior management would benefit.

The reward comes after staff met targets on repaying the bank's £26bn loan from the government.

'Step in now'

Mr Cable said: "This is an extraordinary action from a state-owned bank which still owes billions to taxpayers.

"When millions of people are facing pay cuts or even unemployment, this is indefensible. The government should step in to stop this now."

But Unite national officer Rob MacGregor said: "Unite members and staff at the bank have worked exceptionally hard in extremely difficult circumstances.

"They have experienced the loss of friends and colleagues through compulsory redundancy yet have continued working solidly with dedication and commitment.

"These have been very difficult times and this bonus agreed with the Treasury was promised if targets were met. Their dedication and commitment has meant that they have not only achieved but exceeded the targets set."

Asked whether Mr Brown approved of the bonuses, the prime minister's spokesman said: "Northern Rock, as I think is well known, has repaid its debts to the government at a rate faster than originally planned for.

"Operational decisions such as this are a matter for Northern Rock."

 

[Rabbie]

If the bonus is being paid to the ordinary workers for reaching their targets it is only right that they receive what they were promised.

Wht irritates me is when banks that are in serious trouble insist on paying large bonuses to the top managers who have got the bank into the mess in the first place.

 

[GaryPanic]

Directors bonuses are treated differently
so it will the "Staff" not the "muppets" who get this

the Goveremnt as the major shareholder - has dictated that bonuses to upper managemnt is curtailed _ once privatatised then different bonus will apply (but then its off our hands)

 

[Rich]

Directors bonuses are treated differently
so it will the "Staff" not the "muppets" who get this

Don't the "staff" get paid a wage to do the job properly in the first place?

 

[GaryPanic]

yes- but any company worth it's salt should offer a bonus incentive

if you increase sales by 15% we will give you 10% of your salary as a bonus


or if your inaccounts/recovery then heres you target - recoup 15% more and 10% bonus -

also on process - find a process that cuts cost then a bonus should be given

all of these focus an employee into high productivity .

if you flip this round to a service situation

reduce the complaints by 10% and get a bonus

we work best when there is focus and rewards at the end

but this might not work for hospitals -healthcare

 

[ColinEssex]

we work best when there is focus and rewards at the end

I thought getting a salary was the reward.

Col

 

[Rich]

yes- but any company worth it's salt should offer a bonus incentive

if you increase sales by 15% we will give you 10% of your salary as a bonus


or if your inaccounts/recovery then heres you target - recoup 15% more and 10% bonus -

Na, na, na, it was this fixation with bonuses that drove the world into near oblivian, this philosophy must be stamped on now and the west return to the dogma of an honest days work for an honest days pay

 

[GaryPanic]

You might have a point -

however i still see that bonuses do have a place , but warrant that it is possible to over do it - hard selling stuff to peole who don't need it

but some people are lazy and just rely on having a job and rolling along doing just enough to keep there job
surely there should be an incentive that if bob works harder then John that a reward should be offered to Bob and not John-(base on them doing the same job/salary)

 

[scott-atkinson]

You might have a point -

however i still see that bonuses do have a place , but warrant that it is possible to over do it - hard selling stuff to peole who don't need it

but some people are lazy and just rely on having a job and rolling along doing just enough to keep there job
surely there should be an incentive that if bob works harder then John that a reward should be offered to Bob and not John-(base on them doing the same job/salary)

I'm working hard and have been all Fiscal year to earn my bonus, upto £8k, shame as the shortfall of my mortgage when my house gets repossessed will take that so I won't see a penny, so where is my incentive to work hard and get the bonus???

Being in a job and earning an honest days wage should be enough incentive, otherwise we might as well start giving out bonuses to all those on Job Seekers allowance who go to more than 3 interviews in a week, guess they would never work then just go to interviews....

 

[GaryPanic]

sure its not perfect - but i work with people who are ..lets say less than perfect - there for the salary ,but moan about the work - even though they are not really pulling their weight ..why should i carry someone -

and an employer is hard pushed to get rid of people who are lazy ......
you need reasons and being lazy is one that works with employment lawyers..

 

[Simon_MT]

I think the real issue is the pressure that this has created on the credit market, if Northern Rock is reportedly wanting to shrink its morgage book from £90 billion to £50 billion, isn't money tight enough without it having to contract by £40 billion.

No wonder there is no money about.

Simon

 

[David Eagar]

yes- but any company worth it's salt should offer a bonus incentive

if you increase sales by 15% we will give you 10% of your salary as a bonus

So does this mean that if the company loses 15%, the employees must reimburse??

 

[ColinEssex]

The bonus scheme is a big con. Our taxpayers money are being paid to people who have done a "good" job at bringing this country to economic ruin.

It should be banned. Anyone who gets it in the money/banking sector is a parasite.

Col

 

[GaryPanic]

So does this mean that if the company loses 15%, the employees must reimburse??

Bonus - in certain companies work
if you take window sales reps they live off the bonus/commission
the basic salary to crap - but with commisson on sales becomes more attractive ,-- so to say that all bonus are pointless - doesn't work

Sales type jobs - it is the incentive - and the reward -

however in relation to banks - I agree stupid idea, but even so there is a good arguement for it - if the bonuses are not excessive -

with the banks the average bonus to the average workier is lesst han £1,000 - and new regs mean that the middle management-senior management don't get the bonus - which i think is a fair view

 

[GaryPanic]

The bonus scheme is a big con. Our taxpayers money are being paid to people who have done a "good" job at bringing this country to economic ruin.

It should be banned. Anyone who gets it in the money/banking sector is a parasite.

Col

thats stupid ..

Lets look at the current situation..
pretty poor , ok lets bring in a trouble shooter... John Wayne
Ok John if you sort out the problem - in 6 months we will give you x amount as an incentive/bonus

 

[ColinEssex]

thats stupid ..

It's not. Currently, those that brought the banks to their knees are still on for bonus's that are being paid out of our bail-out money.

People in the money sector get massive salaries anyway, that should be enough.

You think they shed a tear or two for all these problems they caused - not one. They still get their millions. It's always poor Joe Public that pays.
As I said, people that work in accounting and banking are parasites and should be horse whipped, then have their mobey taken away. They're all on the gravy train, even (I suspect) the receptionist at the Halifax.

Col

 

[GaryPanic]

I think you miss the point

certainly those on the current situation are milking it - but if your were given the chance

heres your job at say 20K , however if you improve the work flow by 10% then we will give you 10% of your salary as a bonus ....
or you can plod along at the same rate and just get 20K

the incentive is there ....if I take advantage of it by increasing sales/work flow then more power to me, if I coast along , then whine that x has a bonus and I don't whoses fault is that it isn't anyone elses -

now this does ot relate to the those who are xxxxx's bonus - but those in sales or those in admin who reduce overheads should be rewarded for using the brains ....

if this was done in most public sector areas then you would see less admin in places like hospitals/police and more action services ie more treatment more bobbies on the beat

 

[ColinEssex]

Look, if you get £20K as a salary then that's it. If you don't like it then tough - you either better yourself to get a better job, or lump it.

Millions of our money is going on these wasters bonus's for what? Bringing the company and the country down?

Col

 

[GaryPanic]

Wrong ...
all that happens is that the good people leave the company and go and work for another one that either pays better or has a bonus set up

you end up with a company that offers a poor(er) service - that company loses money due to poor staff quality

(I am not talking about banks here - it the bonus culture itself)
I could get a job in sales and never make a sale and live off the salary of x (in our example 20k) but neveer make a sale - the company will find it hard to remove me due to employment laws
That isn't fair to the other sales persons who have to work hard to carry me ...

THe provision of a bonus - means that there is an incentive to do more work rather than coast along ...

In an ideal world there would be no need for incentives we would all go to work and do our allocated tasks - but i am sure you mst of worked in palces where there were free loaders ...

 

[Rabbie]

Several Points Gary.
1. Most companies only pay a bonus if they are making a profit and specific targets are met - not true in the case of the banks who seem to think they desrve bonuses for being bailed out by the tax payer.

2. The fact you are getting a salary should be an incentive to do the job.

3. Good people don't necessarily move if they don't get a bonus. What's wrong with giving them a pay rise or promotion. anyway no-one is indispensible.