Last year, managers of the 40 biggest French companies received an average salary of €3.06m. That’s 190 times the French minimum wage (Smic). 2.3 million French workers earned the minimum wage last year: i.e. €1,343.77 gross per month (€1,056 net).
Allied Irish Bank intended to pay €40m in bonuses to 2400 bankers, arguing that a 2008 court case was forcing them to do so. The bank then decided not to pay these bonuses, following a threat from the Irish government to withdraw the taxpayers’ money that is keeping the bank afloat. Now bank chiefs have admitted that new legal action could still be taken by some of those 2,400 executives who were supposed to receive the €40m windfall.
The attempt of some big British banks (Barclays, Royal Bank of Scotland, HSBC, Lloyds and Santander UK) to reach a ceasefire with the UK government looks likely to fail. The aim of the talks, called “Project Merlin”, is on the one hand, to convince the government not to levy new taxes on bonuses and, on the other hand, to show the public that banks are really making an effort to shoulder their part of the burden.
Carlos Ghosn, current CEO and President of Renault-Nissan, officially receives €1.2m salary from Renault, but he also receives a complementary remuneration from Nissan of about €8m, giving him a total salary of €9,240,809 per year. This sum is 573 times the French minimum wage (€1,344.77 per month gross).
The Committee of European Banking Supervisors (CEBS) has adopted guidelines which it believes is a response to answers public anger about outrageous bankers’ bonuses. Under these guidelines, the cash part of bonuses will be restricted and the shares part will be increased, so as to discourage shortsighted and risk-taking behavior by bankers. However, Even if banks are none too happy with these measures, there are serious doubts that they will prevent risky investments being made and in any case, the size of the bonuses remain unaffected.
The Institute of Leadership & Management has conducted a survey among 3,300 UK managers. Answering the question “What the ideal Christmas present from your employer would be?”, 48% preferred a cash bonus. Just one in 10 opted for a promotion, with one in six choosing more training and development and 12% saying they would like more staff. Just 11% would prefer to have an increased budget.
In a survey conducted by eFinancialCareers.fr, almost half of the 627 financial professionals interviewed expect that their bonus for 2010 will be higher than last year. Indeed 14% of them expect that it will be 50% higher. Moreover, apart from bonuses, 56% of those surveyed saw their wages grow over the last 12 months. For 55% of them, the increase was less than or equal to 10%.
Vince Cable, UK business secretary, had plans to force banks to disclose the number of staff who was paid more than £1m. He was, however, recently contradicted by the UK Chancellor of the Exchequer, George Osborne, who declared that the UK would not unilaterally force banks to disclose pay details and instead would seek a European consensus. A perfect example of an effective lobby by British banks
Allied Irish Banks has backed down on plans to pay out €40m in bonuses following a government warning that it would not provide billions of euro in funding to the bank if it did so. Irish Finance Minister Brian Lenihan told the bank that the non-payment of bonuses is a condition of state assistance for the institution. The bank, which is being kept alive with the support of billions of euro from the taxpayer, was planning to hand over €40m in bonuses to 2400 senior banking
After the bailout that skyrocketed Ireland’s deficit, Irish bank AIB – which is majority-owned by taxpayers – paid €700,000 in bonuses to just two senior executives in the first nine months of 2010. Another 41 managers shared a €3.06m bonus budget. Furthermore, Irelands Finance Minister Brian Lenihan admitted that about 300 employees of the bank received individual salary increases for the total sum of €3.4m in the first nine months of 2010.