Monday, February 09, 2009

No rewards for failure, insists Brown.

Gordon Brown is insisting that there should be no bonuses for bankers who lose money:

Prime Minister Gordon Brown insisted today that there must be "no rewards for failure" in Britain's banks.

Speaking to an audience of economists in London, Mr Brown promised that he would "sweep aside" the short-term bonus culture in banks and ensure that rewards are provided only for long-term sustainable success, with "penalties" for those who take irresponsible risks.

The policy of "no rewards for failure" would be pursued "aggressively", said the Prime Minister, adding that banks in which the state now holds a majority stake would pay no bonuses to board members and no dividends to shareholders this year.

Mr Brown said: "I believe, as a society, we should support hard work, effort, enterprise and responsible risk-taking.

"We should not in any way condone, but should punish, irresponsible and excessive risk-taking."

I'd take this even further and ask why do these people deserve bonuses at all? Most of us agree on a fee and then do the work that we are contracted to do for that fee. Why is there a stratum of society which needs to be promised bonuses in order to do their job properly?

I know people argue that they require incentive but some of these people are already taking seven figure salaries, so what further incentive do they need?

If a million pounds a year isn't enough incentive to make them eager to do their job properly then maybe they ought to move on to another job. There will be plenty of people in line eager to accept that meagre salary.

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