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>Badly hurt by the financial crisis, the Dutch have capped bankers’ bonuses at just 20 percent of their annual salaries — a far more drastic curb than was impos
by yAnonymous 10y ago
>Badly hurt by the financial crisis, the Dutch have capped bankers’ bonuses at just 20 percent of their annual salaries — a far more drastic curb than was imposed by the European Union. Several bankers told me that unless the Dutch repealed the cap, they wouldn’t consider moving to Amsterdam. “I’d love to relocate to Amsterdam,” one top executive told me. “But I don’t think we’re wanted there.”
My deepest sympathy goes out to the poor bankers.
- varjag 10y agoIf there is market incentive to move banking to Holland, it will happen. The bankers will move where the jobs go, they don't have much say in the matter.
- clort 10y agowhat is market incentive? I'm not sure we can separate the incentive effects of the company making more money, or the bankers themselves making more money. The people at the top of these companies are bankers themselves, and they have bonuses too.
- varjag 10y agoProfit differential in billions on investments would be a great market incentive. Good luck holding this off by forming a mid-level bank clerk conspiracy circle.
- yAnonymous 10y agoThey are basically giving the bonuses to themselves, so if they can't do that, there goes the incentive to move to that country.
- varjag 10y agoThey then become unemployed as people whose money they manage move them to places with better ROI. Cruel world we live in!
- saiya-jin 10y agoyou don't know much about banking, do you
- yAnonymous 10y agoMore than you know about punctuation.
- shubb 10y agoThe large salaries paid to bankers are based on the idea that elite bankers are a rare and precious commodity - one that it is worth paying for. Presumably this is elite bankers are the most connected and collaborate to rig markets best. Presumably if a bank moved to amsterdam, it would not be able to hire the top bankers and would be left out of important money making schemes like the recent Libor conspiracy.
- varjag 10y agoThis is kind of saying that the salaries paid for tech talent in the Valley is an outcome of tech elites conspiracy. While in reality it's a function of history, location, network effect and estate prices. Big enough market disruption can easily tip the scales. And leaving the EU trade zone is pretty destructive for banking and European HQ beachheads in London.
- Houshalter 10y agoYou shouldn't have sympathy for the bankers, but it shouldn't be surprising that they would prefer countries with more favorable regulations. Anyway what is the justification for a cap on bonuses? As opposed to taxing them more or something.
- ramblerman 10y ago> You shouldn't have sympathy for the bankers I think that was sarcasm.
- yAnonymous 10y ago>Anyway what is the justification for a cap on bonuses? That the bonuses are paid for with tax payers' money? The banks fail, then get bailed out... and from the bailout money they continue to pay themselves bonuses when they actually shouldn't see a dime. Banks had to be bailed out a bit too much recently to still be allowed such high bonuses.
- lmm 10y agoWhat about banks that weren't bailed out, why should they be punished for the failure of their competitors? What about banks that have repaid their bailouts with interest? But more than that, why this focus on bonuses rather than total compensation? Surely what matters is how much someone is paid, not the details of how that payment is structured.
- tyfon 10y agoBonus is usually paid out as a reward for short term goals, and that creates incentives to take higher risk in the short term. Total compensation does not have this incentive. I am a banker (although we are a startup bank), and for us the bonus is structured so that it is not paid in full immediately. Quite a bit is held back in case someone does something unhealthy to the company to reach their short term bonus goals. This is not common practice though.
- 10y ago