Stranger things have happened than the sudden outburst of grief all over the pages of the BBC website following the death of the obese actor Richard Griffiths. His portly frame would not normally merit any comment here, but it does seem to have been a contributory factor in his death from complications following a heart attack. (And yes, since you ask, I manage to keep a relatively trim figure with a certain amount of exercise - mostly cycling and stuff in the gym - and a rigorously low starch/low carb diet.)
But Mr Griffiths seems to have been relaunched from a minor supporting actor to a thespian of the standing of Olivier, Richardson and Gielgud. At least in the eyes of the BBC.
Or could it be that on a quiet news day that the BBC is doing all it can to push today's news that an 82 year old man from Berkshire has been arrested under operation Yewtree. A few days ago the BBC readily told us that Jim Davidson was having his collar felt by the Met. Fortunately, The Age, An Australian newspaper is more forthcoming and tells us that the pensioner in question is an Australian entertainer, and they have spoken to family friends in Sydney.
Nevertheless, despite a search warrant an arrest and being bailed until May, the press have been less than forthcoming with the man's name.
Can you see what it is yet?
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Friday, 29 March 2013
Wednesday, 27 March 2013
So David Miliband ....
What caused you to give up your position as a £65,000 a year socialist MP for the arse end of nowhere, and take up the job of CEO and President of a New York based charity that receives donations of $40,000,000 a year and government grants of $260,000,000 a year on a salary of $400k and if reports of your predecessor's remuneration are to be believed, annual bonuses around the $500k mark?
The irony is that the charity changed from being a Holocaust / Jewish refugee charity to a government funded NGO when the US decided to help refugees from the Castro regime in Cuba.
Thursday, 21 March 2013
Storm in a teacup
The BBC is doing its best to cultivate a row between the government and the opposition over a Budget initiative aimed at helping people get on the housing ladder. that Labour say could be used for second home purchases.
Well it might, but since nobody has seen any draft enabling legislation, nobody can say for sure that it will or it won't. But a lack of facts won't stop Labour from making a fuss, for its own sake.
Monday, 18 March 2013
Shut up and listen, you might learn something
Teachers are considering going on strike over pay and conditions:
http://www.education.gov.uk/get-into-teaching/salary.aspx
At £23,010, the average starting salary in teaching is high compared to the average graduate starting salary. Experienced teachers can earn up to £64,000 in London and £56,000 outside London, while head teachers can reach a salary of between £42,379 and £112,000.Source:
http://www.education.gov.uk/get-into-teaching/salary.aspx
Taking the fun out of fund management
Not content with meddling with bankers' pay packages, it now seems that the EU wants to meddle with the moolah of their near neighbours, fund managers.
Now there may be some merit in constraining the behaviour of traders whose capital base is effectively underwritten by taxpayers, but where is the sense in limiting the pay of fund managers when the customers are willingly signing up to contracts that reward their firms for performance.
Personally, even though I pick and buy my own stocks, if I did use a fund manager I would want him to be on my side, and preferably paid 100% for performance. Under the EU proposals with a bonus capped at 100% of salary, the fund manager gets 50% of his maximum pay even when my investments are tanking. It seems that MEPs who are paid a massive amount without really doing anything useful, think we should all be like them.
I don't remember any funds blowing up because the fund managers tried too hard. A bad solution to a non-existent problem.
Now there may be some merit in constraining the behaviour of traders whose capital base is effectively underwritten by taxpayers, but where is the sense in limiting the pay of fund managers when the customers are willingly signing up to contracts that reward their firms for performance.
Personally, even though I pick and buy my own stocks, if I did use a fund manager I would want him to be on my side, and preferably paid 100% for performance. Under the EU proposals with a bonus capped at 100% of salary, the fund manager gets 50% of his maximum pay even when my investments are tanking. It seems that MEPs who are paid a massive amount without really doing anything useful, think we should all be like them.
I don't remember any funds blowing up because the fund managers tried too hard. A bad solution to a non-existent problem.
A failure of objectivity
The BBC have a programme going out tonight on the Iraq War: "Iraq: The Spies Who Fooled the World."
Sorry, but you don't have to apologise for your old pal Blair. He fooled himself, but he never fooled me.
Sorry, but you don't have to apologise for your old pal Blair. He fooled himself, but he never fooled me.
Sunday, 17 March 2013
Savers kebabed
The Cypriot cash snatch has probably given UKIP their biggest PR boost in many years.
For the benefit of those who haven't got to the bottom of the story, in summary international lenders have agreed to a €10bn of the Cypriot government on the basis that the government will also grab €5.8bn from Cypriot bank deposits.
The cash from account holders with Cypriot banks and the Cyprus branches of foreign banks will come in the form of a one-off 9.9% on deposits over €100,000 that will be taken from their accounts when the banks reopen on Tuesday,. Monday is a Cypriot holiday. An additional 6.75% levy will be imposed on deposits below €100,000.
Western Europe has not seen such arbitrary retribution since the WWII punishments meted out by the Germans in response to attacks by partisan and resistance movements. Cyprus is the fourth eurozone country to receive a sovereign bailout after Greece, Ireland and Portugal. Spain has also required €40bn in EU aid to shore up its teetering banking system. The Cyprus precedent means that the next time a country is bailed out, the Cypriots can reasonably expect that country to receive the same treatment, so from now on expect a run on banks and capital flight whenever a eurozone economy looks in trouble.
The EU and others leading the negotiation have justified the measure by saying it broadened the number of people who will shoulder the burden of the bailout. Without the measures, he said, much of it would fall on Cypriot taxpayers; by going after all large deposit holders, many of whom are Russian or British, outsiders would help fund the rescue.
Cypriots hit by the levy will be granted shares in their banks of equivalent value to their losses, but it is hard to see how the Cypriot government could order foreign banks that have taken deposits in the Cypriot branches to issue shares to their Cypriot depositors, particularly when the confiscated cash would be used to pay off the government's creditors.
Christine Lagarde, the IMF managing director who participated in the marathon talks, said she would now recommend to the fund’s board that it contribute to the bailout, though she said it was too early to say whether it would chip in one-third of the cost as it has in Ireland, Portugal and the first Greek bailout. So the Cypriots were strong armed into ponying up 10% of other peoples' money without actually getting any idea of how much the IMF was going to put up.
Remember dear reader, that at no point have EU officials said how much they would contribute to any of these bailouts, because they have contributed precisely nothing. Indeed, only 2 days ago the European Parliament voted against a measure that increased the EU budget by only 1% per annum, because that would limit their power to splurge.
On the other hand, if you are a UK tax payer, you will be picking up the bill for the compensation of UK military and diplomatic personnel. Yet again, the general public is picking up the tab for the profligacy of the public sector, this time in another country.
For the benefit of those who haven't got to the bottom of the story, in summary international lenders have agreed to a €10bn of the Cypriot government on the basis that the government will also grab €5.8bn from Cypriot bank deposits.
The cash from account holders with Cypriot banks and the Cyprus branches of foreign banks will come in the form of a one-off 9.9% on deposits over €100,000 that will be taken from their accounts when the banks reopen on Tuesday,. Monday is a Cypriot holiday. An additional 6.75% levy will be imposed on deposits below €100,000.
Western Europe has not seen such arbitrary retribution since the WWII punishments meted out by the Germans in response to attacks by partisan and resistance movements. Cyprus is the fourth eurozone country to receive a sovereign bailout after Greece, Ireland and Portugal. Spain has also required €40bn in EU aid to shore up its teetering banking system. The Cyprus precedent means that the next time a country is bailed out, the Cypriots can reasonably expect that country to receive the same treatment, so from now on expect a run on banks and capital flight whenever a eurozone economy looks in trouble.
The EU and others leading the negotiation have justified the measure by saying it broadened the number of people who will shoulder the burden of the bailout. Without the measures, he said, much of it would fall on Cypriot taxpayers; by going after all large deposit holders, many of whom are Russian or British, outsiders would help fund the rescue.
Cypriots hit by the levy will be granted shares in their banks of equivalent value to their losses, but it is hard to see how the Cypriot government could order foreign banks that have taken deposits in the Cypriot branches to issue shares to their Cypriot depositors, particularly when the confiscated cash would be used to pay off the government's creditors.
Christine Lagarde, the IMF managing director who participated in the marathon talks, said she would now recommend to the fund’s board that it contribute to the bailout, though she said it was too early to say whether it would chip in one-third of the cost as it has in Ireland, Portugal and the first Greek bailout. So the Cypriots were strong armed into ponying up 10% of other peoples' money without actually getting any idea of how much the IMF was going to put up.
Remember dear reader, that at no point have EU officials said how much they would contribute to any of these bailouts, because they have contributed precisely nothing. Indeed, only 2 days ago the European Parliament voted against a measure that increased the EU budget by only 1% per annum, because that would limit their power to splurge.
On the other hand, if you are a UK tax payer, you will be picking up the bill for the compensation of UK military and diplomatic personnel. Yet again, the general public is picking up the tab for the profligacy of the public sector, this time in another country.
Saturday, 16 March 2013
Crime of next week: Cyprus
Eurozone finance ministers have agreed a 10bn-euro (£8.7bn) bailout package for Cyprus to save the country from bankruptcy. The deal was reached after talks in Brussels between the ministers and the International Monetary Fund (IMF).
In return, Cyprus is being asked to trim its deficit, shrink its banking sector and increase taxes. OK, so far, fair enough, but the sting is in the tail, because there will also be a one-off levy of savings deposits.
In return, Cyprus is being asked to trim its deficit, shrink its banking sector and increase taxes. OK, so far, fair enough, but the sting is in the tail, because there will also be a one-off levy of savings deposits.
- Depositors with under 100,000 euros deposited must pay 6.75%
- Those with more than 100,000 in their accounts must pay 9.9%
- Depositors will be compensated with the equivalent amount in shares in their banks
Which is a nifty for the banks who will see their capital base increased by 10% of their deposits, but not so hot for savers.
How and why did this come about? Well according to Reuters, someone in Germany said they were pretty convinced that most of the money in Cyprus belonged to Russian money launderers, so rather than bothering to find out the facts, the EU just decided to effectively confiscate cash from all depositors next Tuesday.
Friday, 15 March 2013
Crime of the week: SAC
Two affiliates of SAC Capital, the giant hedge fund, settled insider trading charges with the Securities and Exchange Commission for $614 million on Friday, in what the agency was the biggest ever settlement for such cases.
The settlements spare SAC’s founder, Steven A. Cohen, who hasn’t been charged with wrongdoing. Also he gets to keep his billions.
Mr. Cohen, one of the most successful hedge fund managers in the world, has long been considered a dodgy dealer .. errm ... target of federal investigators.
The amounts paid by SAC surpass the $400 million that Michael Milken paid to settle charges by the agency in 1990. But such are the low standards of today that this will pass without a murmur and unlike Mr Milken who ate a lot of porridge, the US judicial system is unlikely to be troubled by Mr Cohen.
One affiliate of SAC, CR Intrinsic, agreed to pay over $600 million over charges tied to one of its employees, who is accused of trading on illicitly obtained confidential information about the drug makers Elan and Wyeth. The other affiliate, Sigma Capital Management, agreed to pay $14 million to settle charges that it engaged in insider trading in the stocks of Dell and Nvidia. SAC’s management company will pay the settlements, meaning that investors of the hedge fund are not on the hook
Which is good for investors who get to keep their illicit gains.
A spokesman for SAC said in a statement, “We are happy to put the Elan and Dell matters with the S.E.C. behind us. This settlement is a substantial step toward resolving all outstanding regulatory matters and allows the firm to move forward with confidence." You bet your bippy they are!
Which makes it all the more amazing that a firm can be found guilty of insider trading, fined such an enormous amount, and yet be considered fit and proper to carry on in business.
Mr. Cohen, one of the most successful hedge fund managers in the world, has long been considered a dodgy dealer .. errm ... target of federal investigators.
The amounts paid by SAC surpass the $400 million that Michael Milken paid to settle charges by the agency in 1990. But such are the low standards of today that this will pass without a murmur and unlike Mr Milken who ate a lot of porridge, the US judicial system is unlikely to be troubled by Mr Cohen.
One affiliate of SAC, CR Intrinsic, agreed to pay over $600 million over charges tied to one of its employees, who is accused of trading on illicitly obtained confidential information about the drug makers Elan and Wyeth. The other affiliate, Sigma Capital Management, agreed to pay $14 million to settle charges that it engaged in insider trading in the stocks of Dell and Nvidia. SAC’s management company will pay the settlements, meaning that investors of the hedge fund are not on the hook
Which is good for investors who get to keep their illicit gains.
A spokesman for SAC said in a statement, “We are happy to put the Elan and Dell matters with the S.E.C. behind us. This settlement is a substantial step toward resolving all outstanding regulatory matters and allows the firm to move forward with confidence." You bet your bippy they are!
Which makes it all the more amazing that a firm can be found guilty of insider trading, fined such an enormous amount, and yet be considered fit and proper to carry on in business.
Wednesday, 13 March 2013
Lynch mob
Any aspiring criminals who want to avoid investigation should follow the lead of Autonomy, and do business with the investigating authorities.
A criminal investigation into Autonomy by the Serious Fraud Office has been thrown into confusion just as it began after the UK agency admitted that its £4.6m contract with the software-maker could present too much of a conflict of interest for it to continue pursuing the probe. Which is a shame, but particularly when the opinions voiced in America last year are considered.
Autonomy was founded as Cambridge Neurodynamics in 1991 by Michael Lynch, a Cambridge-educated computer scientist. Nothing wrong with that. There are lots of us.
The company was based on the then-hot concept of Bayesian search, named after 18th-century mathematician Thomas Bayes, and ultimately developed an all-encompassing software package it called IDOL — Intelligent Data Operating Layer.
Hewlett-Packard say they "stand behind" IDOL. And so they should; otherwise they would have to write off the rest of the $11 billion they paid for Autonomy.
But, in short, the naysayers say that there isn't really much to the concept, more just smoke and mirrors that Autonomy has used to make people think they have got something very impressive. It's basically a search engine, like Google's and a host of others, but unlike Google's it just works on a company's own data, and doesn't have the portal/advertising business model of Google.
So how did Autonomy show such big numbers? They would go to customers and offer them a deal they couldn’t refuse. Say a customer had £5 million and four years left on a data-storage contract. Autonomy would offer them, say, the same amount of storage for £4 million but structure it as a £3 million purchase of IDOL software, paid for up front, and £1 million worth of data storage. The software sales dropped to the bottom line and burnished Autonomy’s reputation for being a fast-growing, cutting-edge software company a la Oracle, while the revenue actually came from the low-margin, commodity storage business.
Lynch’s management team also was practiced at the art of wringing attractive-looking growth out of a string of ho-hum acquisitions. The typical strategy was to bolt IDOL and other software onto a target’s existing products and try and convince customers to pay more for the “new” products.
If that failed, they’d milk the existing customer base by halting development and outsourcing support, my source says, using the cash from the runoff business to fund more acquisitions.
Which to come back to the SFO, tells us why they might feel a conflict of interest. Not because they are a loyal and willing customer of Autonomy, but because they spent a fortune on software that they don't use as part of a ho-hum data storage contract.
A criminal investigation into Autonomy by the Serious Fraud Office has been thrown into confusion just as it began after the UK agency admitted that its £4.6m contract with the software-maker could present too much of a conflict of interest for it to continue pursuing the probe. Which is a shame, but particularly when the opinions voiced in America last year are considered.
Autonomy was founded as Cambridge Neurodynamics in 1991 by Michael Lynch, a Cambridge-educated computer scientist. Nothing wrong with that. There are lots of us.
The company was based on the then-hot concept of Bayesian search, named after 18th-century mathematician Thomas Bayes, and ultimately developed an all-encompassing software package it called IDOL — Intelligent Data Operating Layer.
Hewlett-Packard say they "stand behind" IDOL. And so they should; otherwise they would have to write off the rest of the $11 billion they paid for Autonomy.
But, in short, the naysayers say that there isn't really much to the concept, more just smoke and mirrors that Autonomy has used to make people think they have got something very impressive. It's basically a search engine, like Google's and a host of others, but unlike Google's it just works on a company's own data, and doesn't have the portal/advertising business model of Google.
So how did Autonomy show such big numbers? They would go to customers and offer them a deal they couldn’t refuse. Say a customer had £5 million and four years left on a data-storage contract. Autonomy would offer them, say, the same amount of storage for £4 million but structure it as a £3 million purchase of IDOL software, paid for up front, and £1 million worth of data storage. The software sales dropped to the bottom line and burnished Autonomy’s reputation for being a fast-growing, cutting-edge software company a la Oracle, while the revenue actually came from the low-margin, commodity storage business.
Lynch’s management team also was practiced at the art of wringing attractive-looking growth out of a string of ho-hum acquisitions. The typical strategy was to bolt IDOL and other software onto a target’s existing products and try and convince customers to pay more for the “new” products.
If that failed, they’d milk the existing customer base by halting development and outsourcing support, my source says, using the cash from the runoff business to fund more acquisitions.
Which to come back to the SFO, tells us why they might feel a conflict of interest. Not because they are a loyal and willing customer of Autonomy, but because they spent a fortune on software that they don't use as part of a ho-hum data storage contract.
I am a French telecom service
Apparently. French prosecutors have been asked to investigate Microsoft’s Skype because of its failure to register in the country as a telecoms operator, in the latest attempt by France to control the activities of global internet companies.
In a statement on Tuesday, the telecoms regulator Arcep said that it had contacted the Paris public prosecutor after the instant messenger group ignored “several requests to declare itself as an electronic communications operator”.
So what exactly does Microsoft/Skype do to warrant being called a telecoms operator? Well we all know about the software that they distribute for free, but that is just software, so where is the telecom operation, Arcep said the fact that Skype allowed its users to make voice calls to fixed line and mobile numbers in France meant that it provided a telephone service, and therefore had an obligation to allow emergency calls and to allow French police and security services to monitor its voicemail traffic when legally required.
So because Skype owns some boxes that sit between the internet, provided by whichever ISP that might be and the public telephone service, that makes Skype a telecoms operator, even though they don't actually own any wires.
Now that is patently absurd. Way back when in one of my first banking jobs, I had some involvement with a message transmission system, a bit like SWIFT, but connecting to the telex network (I said it was a long time ago), international leased lines and a whole host of internal networks and computers. The network of message switches owned no external wires but we connected to lots of them all over the world in many different countries. Diod that make us a telecom operator? Of course not.
Mind you, the French authorities description would fit the ever growing network at Chateau Masterley (latest count 4 desktops, 5 laptops, various handhelds and wifi-enabled phones, broadband @ > 75Mbps and a phone line for backup). So that makes me a French telecoms operator.
And so is my wife.
So what exactly does Microsoft/Skype do to warrant being called a telecoms operator? Well we all know about the software that they distribute for free, but that is just software, so where is the telecom operation, Arcep said the fact that Skype allowed its users to make voice calls to fixed line and mobile numbers in France meant that it provided a telephone service, and therefore had an obligation to allow emergency calls and to allow French police and security services to monitor its voicemail traffic when legally required.
So because Skype owns some boxes that sit between the internet, provided by whichever ISP that might be and the public telephone service, that makes Skype a telecoms operator, even though they don't actually own any wires.
Now that is patently absurd. Way back when in one of my first banking jobs, I had some involvement with a message transmission system, a bit like SWIFT, but connecting to the telex network (I said it was a long time ago), international leased lines and a whole host of internal networks and computers. The network of message switches owned no external wires but we connected to lots of them all over the world in many different countries. Diod that make us a telecom operator? Of course not.
Mind you, the French authorities description would fit the ever growing network at Chateau Masterley (latest count 4 desktops, 5 laptops, various handhelds and wifi-enabled phones, broadband @ > 75Mbps and a phone line for backup). So that makes me a French telecoms operator.
And so is my wife.
Tuesday, 12 March 2013
Lonely hearts
WANTED: Short term lover (9 weeks - 8 months max.) in Westminster area to
replace long(er) term partner who is unavoidably detained. Europhobes,
climate change "deniers", Cons and Labs need not apply. Must like the colour
yellow, Aardman Animation characters and windmills. GSOHubris appreciated, as is ability to spell schadenfreude. Gender
unimportant. Apply in confidence to CarinaT@thatman.co.uk
Sunday, 10 March 2013
Short, sharp and to the point
From The Sun:
If the Tories don’t wake up, they will be destroyed at the 2015 election.
A crucial poll of 109 marginal seats — the ones that decide elections — puts Labour on course to seize 93 on their way to a majority of 84.
The Conservatives have only themselves to blame.
It’s no good bleating about the Lib Dems.
Who is wearing the trousers in this Coalition?
Not David Cameron.
The Tories have lost the plot.
Welfare spending is still way too high.
Promised cuts in quangos and bureaucracy never happened.
Overseas aid wastes billions.
There’s nothing wrong with a humanitarian fund for catastrophes, but no excuse for Cameron handing out cash just to make himself feel good.
On Europe, he dithers while UKIP surges.
On taxes he offers nothing.
On slashing the regulations crippling firms and worsening unemployment, there is only talk.
If the Tories don’t wake up, they will be destroyed at the 2015 election.
A crucial poll of 109 marginal seats — the ones that decide elections — puts Labour on course to seize 93 on their way to a majority of 84.
The Conservatives have only themselves to blame.
It’s no good bleating about the Lib Dems.
Who is wearing the trousers in this Coalition?
Not David Cameron.
The Tories have lost the plot.
Welfare spending is still way too high.
Promised cuts in quangos and bureaucracy never happened.
Overseas aid wastes billions.
There’s nothing wrong with a humanitarian fund for catastrophes, but no excuse for Cameron handing out cash just to make himself feel good.
On Europe, he dithers while UKIP surges.
On taxes he offers nothing.
On slashing the regulations crippling firms and worsening unemployment, there is only talk.
Wednesday, 6 March 2013
Venezuelan democracy in action
In praise of the malus
Bonus as any fule kno' comes from the Latin:
Etymology: From Old Latin duonus.
Adjective: bonus m (f bona, n bonum); first/second declension
1.good, honest, brave, noble, kind, pleasant, 2.right, 3.useful, 4.valid, 5.healthy
It's opposite would be a malus. I have long been a fan of the malus, because that would allow for the clawback of previous bonuses when the business goes pear shaped.
Until now the idea hasn't really caught on, mostly because turkeys will never vote for Christmas, but now I think it is an idea whose time has come. Not perhaps in the form that it was originally intended, but in the wonderful world of finance, old ideas have a habit of coming back in new guises, and this particular structure seems to be a slightly contrary way of getting banks and their employees around the restrictions that the EU are trying to impose.
Let us suppose that nobody in their wildest dreams would ever expect to get a bonus to make their total pay equal to 10 times base salary. So we set that figure as the annual pay for bank staff. They don't actutally get paid 1/12 of their annual salary every month, but only 1/120, with the final 109/120 due in the final month. Also payable in the final month, or rather repayable, is the "malus", which is a sum recognising the diffference between actual performance and the performance required to justify the full salary. Management sets the malus for every employee up to 108/120 of the annual salary, and offsets the amount of the malus against the alary payment for the year.
Net result: 0% bonus, and even if the malus was taken into account, the amount of the malus is always loess than the amount of the base salary.
Etymology: From Old Latin duonus.
Adjective: bonus m (f bona, n bonum); first/second declension
1.good, honest, brave, noble, kind, pleasant, 2.right, 3.useful, 4.valid, 5.healthy
It's opposite would be a malus. I have long been a fan of the malus, because that would allow for the clawback of previous bonuses when the business goes pear shaped.
Until now the idea hasn't really caught on, mostly because turkeys will never vote for Christmas, but now I think it is an idea whose time has come. Not perhaps in the form that it was originally intended, but in the wonderful world of finance, old ideas have a habit of coming back in new guises, and this particular structure seems to be a slightly contrary way of getting banks and their employees around the restrictions that the EU are trying to impose.
Let us suppose that nobody in their wildest dreams would ever expect to get a bonus to make their total pay equal to 10 times base salary. So we set that figure as the annual pay for bank staff. They don't actutally get paid 1/12 of their annual salary every month, but only 1/120, with the final 109/120 due in the final month. Also payable in the final month, or rather repayable, is the "malus", which is a sum recognising the diffference between actual performance and the performance required to justify the full salary. Management sets the malus for every employee up to 108/120 of the annual salary, and offsets the amount of the malus against the alary payment for the year.
Net result: 0% bonus, and even if the malus was taken into account, the amount of the malus is always loess than the amount of the base salary.
Tuesday, 5 March 2013
Left wing dictator dies - BBC goes crazy
Venezuela's Hugo Chavez dies aged 58
Venezuela's President Hugo Chavez dies at the age of 58 after a battle with cancer, his vice-president announces.
Left wing journalists working late into the night to give the lowdown on dead socialist on the other side of the world....
Bonuses and maluses
I earn a bonus as a reward for my successful endeavours.
You earn a bonus because the institution needs to retain your services in a competitive market.
He/she/it's bonus is an unjustified outrage.
It seems that the CEO of Rolls-Royce is quite entitled to earn bonuses and other rewards six times the value of his base salary (total pay for 2012 as near as dammit £5 million against a base salary of £800k plus change since you ask), but that for bankers to earn a bonus of more than 100% of base pay is a mortal sin.
At least in the view of MEP's and the EU Commission. Well, they are quite entitled to their view, but that doesn't necessarily have any relevance because they may not have the power to do anything about it, but more on that in a minute. The immediate reaction is that the MEP's and EU Commissioners all live the life of Riley in Brussels on expatriate packages paying for second homes, living away from home allowances and in the case of those working at the EU, an infeasibly low tax rate on their salaries - all of which is of course completely risk free, not subject to performance appraisal or even financial results - not that there is any financial risk in their taxpayer funded business.
But let's go back to their powers. The EU is only entitled to make rules in areas granted to it by treaties, and the relevant treaty and Articles would appear to be Articles 151-153 of the Lisbon treaty, particularly Article 153. To give it some context, here is Article 151.
Did you see that Mr Barosso? "Shall not apply to pay". And that includes bonuses. Of course some Euro twit came up with the line that this wasn't about pay but about how much was paid as salary and how much was paid as bonus.
Wrong, thicko. Pay is pay and I don't care how much Euro-spin you want to ladel out, the treaty couldn't be much clearer. All pay controls are strictly off limits to the EU. Try pulling a variation on 153 (5) and claim that the EU may not be able to legislate on the right to strike, but is not prevented on legislating on the length of strikes. See you in court, loser.
Anyway, there may be another article under which the EU claim these powers, but so far, they haven't been able to point it out.
You earn a bonus because the institution needs to retain your services in a competitive market.
He/she/it's bonus is an unjustified outrage.
It seems that the CEO of Rolls-Royce is quite entitled to earn bonuses and other rewards six times the value of his base salary (total pay for 2012 as near as dammit £5 million against a base salary of £800k plus change since you ask), but that for bankers to earn a bonus of more than 100% of base pay is a mortal sin.
At least in the view of MEP's and the EU Commission. Well, they are quite entitled to their view, but that doesn't necessarily have any relevance because they may not have the power to do anything about it, but more on that in a minute. The immediate reaction is that the MEP's and EU Commissioners all live the life of Riley in Brussels on expatriate packages paying for second homes, living away from home allowances and in the case of those working at the EU, an infeasibly low tax rate on their salaries - all of which is of course completely risk free, not subject to performance appraisal or even financial results - not that there is any financial risk in their taxpayer funded business.
But let's go back to their powers. The EU is only entitled to make rules in areas granted to it by treaties, and the relevant treaty and Articles would appear to be Articles 151-153 of the Lisbon treaty, particularly Article 153. To give it some context, here is Article 151.
| Article 151 |
| The Union and the Member States, having in mind fundamental social rights such as those set out in the European Social Charter signed at Turin on 21 October 1961 and in the 1989 Community Charter of the Fundamental Social Rights of Workers, shall have as their objectives the promotion of employment, improved living and working conditions, so as to make possible their harmonisation while the improvement is being maintained, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment and the combating of exclusion. To this end the Union and the Member States shall implement measures which take account of the diverse forms of national practices, in particular in the field of contractual relations, and the need to maintain the competitiveness of the Union economy. They believe that such a development will ensue not only from the functioning of the internal market, which will favour the harmonisation of social systems, but also from the procedures provided for in the Treaties and from the approximation of provisions laid down by law, regulation or administrative action. |
Now I think it is pretty unclear whether the regulation of banking pay falls under that heading, but let us give the Eurocrats the benefit of the doubt. So then we have Articles 152 and 153 which you can read in the attached links which contains a lot of guff about the protection of workers rights and harmonisation, followed by the following in Article 153 (5).
5. The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs.
Wrong, thicko. Pay is pay and I don't care how much Euro-spin you want to ladel out, the treaty couldn't be much clearer. All pay controls are strictly off limits to the EU. Try pulling a variation on 153 (5) and claim that the EU may not be able to legislate on the right to strike, but is not prevented on legislating on the length of strikes. See you in court, loser.
Anyway, there may be another article under which the EU claim these powers, but so far, they haven't been able to point it out.
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