You knew it was coming. First Merrill realized that the bonus spigot was going to be shut down so they paid out bonuses asap when they should have been selling office furniture, and now the slightly slower cousins across the pond are realizing they need to cash out now before the U.S. populist anger focuses on their interior decorating... oh and get exactly 0 bonuses after being nationalized.As the TimesOnline reports:
Banks dependent on taxpayer support are planning to rush out hundreds of millions of pounds in bonuses to senior bankers and traders before a threatened crackdown.
As ministers prepared to curb excessive remuneration, it emerged that Barclays and Lloyds Banking Group were poised to follow Royal Bank of Scotland (RBS) by paying bonuses within weeks.
Barclays, which has tapped the Bank of England for billions of pounds in loans and guarantees, is believed to be planning even larger payouts. According to the terms of its purchase of the North American division of the collapsed Lehman Brothers, Barclays is due to pay $2.5 billion (£1.7 billion) in bonuses to traders and dealmakers on Wall Street in the next few days.
Ministers reacted angrily to reports in The Times that RBS was preparing to give bonuses to thousands of senior bankers and traders. Banks applying for government insurance to underwrite toxic assets and free up cash for lending are likely to have to meet conditions preventing them paying excessive remuneration, officials said.
While total payouts seem rather small time compared to recent U.S. precedent, what does seem surprising is that ironically, former employees of liquidated Lehman may get the best deal after all. However, as we are betting people, we see the chances of these bonus payments occurring now as rather slim. The Brits didn't learn from the U.S. precedent, and should have kept all their comp schemes under deep wraps.
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