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How to Pay the Bonuses

So, we have contractual issues that mean lots of people in banks need to be paid bonuses.  So be it.  Pay them then, but here's how it should be done.

1)  The first £5,000 in bonuses should be paid in cash.  That should mean that most lower-level people in the banks get the cash they deserve - i.e. those who work hard at the coal face, in branches and some central departments, most of whom really can't be blamed for what has happened.

2)  The remaining bonus above this amount is paid in shares, but not sold to them at the current share prices, which are low because of what these people have done to the banks. 

No, these shares should be sold to them at either the highest share price over the last 2 years or, if this is too harsh, at the rights issue prices quoted in September.  This would mean two things:

a) they are made painfully aware of just what has happened to shareholders, and taxpayers, in the place they'll appreciate it most - in the pocket, and;

b)  they have an incentive to work hard to get the value back in the banks, and a recovery in the share price.

These shares should also be placed in trust for 3-5 years, with these individuals being unable to get at them until that period has been completed.

Of course, they'll also share the risk in the price that most of the shareholders have - and share the risk that they might be rendered worthless by nationalisation - which I think would be a great practical lesson for all these high earners to learn.

Go on, banks - do it his way and show us all that you really understand our anger at what has happened.


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