The FCA boss Nikhil Rathi is now proposing to scrap the bonuses after two independent reviews found the regulator had acted too slowly to protect consumers. He said the payouts had “not been effective at driving individual or collective performance”.
Details of the bonus payouts obtained by the Observer reveal £125,529,590 has been paid out in bonuses at the watchdog since 2016, including bonuses worth up to £45,000 each for executive directors.
In the year to 31 March 2021, £19.8m in bonuses was paid out, with average payouts of about £5,300 for those receiving awards.
These are among the biggest bonus pots ever handed out in a government department or quango.
Gina Miller, the business activist and co-founder of the True and Fair Campaign, which is calling for a package of financial reforms to benefit consumers, said: “These payouts are an absolute insult to people who have lost their life savings or have had their lives decimated because we have a regulator which isn’t fit for purpose.
OK, quango, government, why in buggery should they have bonuses?
But also, the industry itself works on wages plus bonuses. And you would like to have at least a modicum of people at the quango who know the industry from the inside. So, to at least some extent, you’ve got to adopt the pay scales and pay styles of the industry you’re trying to recruit from.
Actually, there’s a good argument that given the incompetents they do have they should be paying better bonuses – and also adopting that other employment feature, firing people on the spot.
Having been a bureaucrat myself, I’d argue that they’re paid a salary and should do their job.
If they want bonuses, they should resign and join the private sector.
In private industry there is the (admittedly small) chance of taking the fall for crap performance.
Of course, it’s pretty weak as any public school duffer taken on as a “trader” at a brokerage because he’s a family friend demonstrates.
Oh, and the CxOs who fuck up one company then go onto others seemingly without the stink of shit following them (Andy Hornby for example).
So, mainly for the proles when their incompetent manager takes a dislike to them.
I digress, paying more to the people in the public sector will not help. It should work as Tim outlines, but it’s more likely that politically connected asshats will get the role rather than people qualified to do it. Like the 3rd sector, it’ll be a teat for failed Leftists to make out like bandits from.
The problem with bonuses is that unless they are directly linked to performance (like sales commissions), they don’t motivate individuals. In most places I’ve worked, managers can’t be arsed fighting over who deserves slightly more or slightly less; so the whole department gets a flat n% or £n bonus.
the whole point of a financial watchdog is that it doesn’t.
Thus actual competency is a handicap….
The bonuses being complained about are tiny, at least by financial services standards. Cuts both ways, though. Not really worth complaining about, but not worth fighting for either.
Bet Gina had one or two big bonuses in her time…
Long ago I was consulted by my academic Head of Department about the university’s proposed policy of introducing ‘discretionary awards’ i.e. bonuses. I said (i) I was all for it (interested party, you see). However (ii) no doubt the size of bonus would be (a) too small to cause a change in my way of life but (b) large enough that people who didn’t get one would be seriously pissed off.
And lo it was so! One chap was so annoyed that he cleared off Oop North where in his promoted post he got paid much more and the money went far, far further.
@ dearieme
Yonks ago my then employer consulted investment staff about introducing a bonus system, so I proposed one that I thought was fair, rewarding *real* performance as distinct from luck due to random fluctuations. HR didn’t even reply and imposed a system of sector bonuses (all those in one sector got a bonus that was a uniform %age of salary, but differed from the %age given to those in a different sector), thereby massively diluting any incentive that the bonus system should have created. I (and several others) contributed a lot to group performance and got as much as someone who contributed zilch but this suited HR.
In a fair and reasonable world, HR would be getting negative bonuses!
“most places I’ve worked, managers can’t be arsed fighting over who deserves slightly more or slightly less; so the whole department gets a flat n% or £n bonus”
Or alternatively realised how much crap they would have to deal with if people received different amounts, especially in this age of victimhood and diversity. Working in a team once where the manager and I were the only men he admitted to me after we both left that he had a few complaints of discrimination from the womenfolk so couldn’t dare give any of them less than me.
Most performance reviews in a HR sense shouldn’t be linked to bonuses as if people know it means money they aren’t going to have a frank open discussion about improving intangibles but will instead be defensive or even game the system where possible.