A lot is currently stated about the cap on bankers’ bonuses. One part of the discussion amuses me. It’s said that the bankers are threatening to leave the country if bonuses are capped. Well, here is why I say; I don’t care. Aren’t these the same guys who are driven by the bonus culture and have contributed to the economic woes which we are suffering? Aren’t these the same guys who have been running Lehman Brothers, Lloyds or RBS?
So I wondered if it would be such a bad thing if they did in fact leave.
I actually don’t think they will. Since the bonus cap is introduced all over Europe their only alternative is to work in the US (where they will no doubt introduce similar caps), Hong Kong or Switzerland. If people want to leave and bring up their family in those places then they are going to go anyhow but if the new policy helps us to get rid of the guys who have contributed to our economic troubles then I would be the first to welcome a cap on bonuses.
Clearly my above comments are a little bit cynical because in the ideal world I would not advocate that the government should get involved in how companies pay their staff. This is for the shareholders and the management to decide. If society believes that the bankers’ bonuses are too high then I wonder if a special tax would not be more advisable. That way society will benefit and if bankers are forced to cap their bonuses it will either result in new loopholes or staff costs decreasing as they will increase their profits which they can then protect with some other tax schemes (you just have to read what little tax banks are actually paying).
Do you think it would be such a bad thing is we waved farewell to the greedy bonus culture?