Illogical nonsense
The timing of the change means banks will be able to offer bigger rewards in the upcoming round of bonuses, which regulators hope will give banks more flexibility about their cost base going into a potential downturn.
To manage costs better, going into a possible downturn, they’ll allow bigger bonuses to be paid?! How does that make any sense?
Because bonus is based on performance, lose a fuck ton, make zero bonus. If bonus is a bigger part of pay then it reduces the cost to the business compared to having high salaries that have to be paid whatever the performance.
So you’re suggesting we will be seeing a headline along the lines of “Huge pay cuts across all baking leadership positions”?
No, contracts are binding.
But new packages will offer higher potential earnings with more bonus and less salary.
I wish I had some amount of your naïve optimism
Anne Sammon, partner at law firm Pinsent Masons, said there was a “risk associated with creating a two-tier workforce where new employees are paid lower salaries but with higher bonus potential”.
“Those who received increases to fixed pay when the bonus cap was introduced will be contractually entitled to those higher salaries and so will only give those up where they are offered some incentive to do so,” she added.
