Bob Diamond isn't exactly on the short list for banking's Goodwill Ambassador after his performance before the Treasury select committee in London on Tuesday. Basically giving the committee the finger, Diamond remarked that, "...the period of remorse and apology needs to be over." regarding banker bonuses. He's reported to be making £8.5 million, or $13.5 million USD, as chief of Barclays this year.
His testimony has given rise to all kinds of protest in London over banker pay, and some forces in the British government are making efforts to extend the 50% tax on all bonuses over £25,000. That said, the British government has largely backed off of any type of pressure on the banks to rein in bonuses, aside from grumbling. Mark Steel has gone so far as to pen a tongue-in-cheek missive to the effect that, "We need to feel the bankers' pain". Easily the funniest thing you'll read all day.
At last someone has dared to defend the oppressed people of the banking community. Bob Diamond, chief executive of Barclays, who himself has to suffer the trauma of an £8m bonus, said yesterday that the bankers' "period of remorse and apology should be over". And you feel his pain, because the first words to cross your mind when you see a banker are "remorseful and apologetic". Then you're left worrying, "Oh, how I wish the poor souls were slightly less burdened with remorse about their bonus, and didn't apologise with such agonising sincerity about putting it into their wife's name in a series of untraceable accounts based in uninhabitable islands off Ecuador."
You guys know I'm all for bonuses and the bonus culture. But Diamond thumbing his nose at regulators doesn't help the perception of bankers while the rest of the world is still mired in a global financial crisis. I understand his frustration, but suggesting that the period of remorse for receiving massive taxpayer bailouts should be over while you're pocketing an £8 million bonus (largely thanks to those same taxpayers) is a little over the top.
No?
Good on him.
I don't really know what he was hoping to do, to be honest. Perhaps he has a secret plan in the works but I can't see what it is.
Financial crisis and bailout considered, most of the big banks are still making tons of money. I've never been a fan of clamping bonuses, though. If you want to regulate the hell out of the banks to strip profits and redistribute them, go ahead and try. But it's just my personal belief that the employees who generate the revenue should be the primary stakeholders and recipients of said revenue. Once the bank has already "earned" it, they should be able to distribute it however they want (within reason, of course. I'm not advocating for surrepticious distribution to support terrorism, etc.).
seems a little two-faced to defend his bonus while he cuts staff at barcap: http://www.wallstreetoasis.com/forums/barcap-to-layoff-600-people
F*ck him for making money...what a jerk.
As far as the impact of him 'thumbing his nose' at regulators and hurting the perception of bankers, if more politicians had a similar disregard for perception and said what needed to be said, I would feel a lot better. I get the whole 'you took government money, you shouldn't get anything during bonus season' but if memory serves, Barclays bought Lehmen after the gov't let it fail (could be wrong, too busy to look it up) so if anyone should be allowed to give a big fat middle finger to anyone, it would be him.
This
this whole taxpayer bailout talk is so much shit.
The uk's financial sector pays so much more tax than any of the poor voting majority.
This was more like the financial sector bailing itself out with the massive taxes it paid for years.
HAHAHAHAHAHAHA!
Love it. That, my friends, is rationalization and revisionist history at its finest.
@Happy Much better profile pic, bro. Pelosi was creeping me out.
Some of these kids are ignorant as can be. I know you're with me on this.
For those of you that don't get it, let us review:
1.) Banks give the economy AIDS
2.) Economy dies because AIDS ravaged its immune system (systemic failure)
3.) Banks are revived by TARP and numerous other programs which amount to the banks literally printing money
4.) Banks start paying massive bonuses almost immediately after the crisis (based on money which was subsidized through the taxpayers and numerous gov't programs)
5.) Banks act surprised when people are pissed off that they just funded the banks' performance and have to sit and watch as the banks pay outrageous bonuses while people all over the country DIDN'T get a bailout and are suffering (and will be for a long time to come.)
But, yeah, "poor people" need to stop complaining out of jealousy over how great the bank overlords are.
Give me a break.
Just wow.
To be honest Barclays did not accept any bailout money from the UK government so why should he apologise for anything. And let's not forget Barclays did much better than most of its UK/European peers. He is understandably frustrated at being looked through the same magnifying glass as RBS and Lloyds/HBOS. I agree though that he shouldn't pocket a multi-million pound bonus while laying off staff - that just makes him look like a greedy villain.
I'm sure you guys saw this on Dealbreaker, but just in case:
http://dealbreaker.com/2011/01/layoffs-watch-11-barclays-makes-jobs-cut…
Nice. Kick 'em in the ass on the way out the door.
Wow. That really sucks. Bastards.
All banks should close to appease the desire of the sheeple. The economy will surely rebound.
Haha, sheeple! I like it!
I hadn't checked dealbreaker in a few days, but dear lord... No bonus for 2010 if you get laid off? That's got to be the worst news you could possibly get...
And why are regulators sticking their nose in bonuses, or compensation of any form, for that matter? Compensation should not be subject to regulators, voters, or tax payers. Unless, of course, the employees in question are being paid by the tax payer. So, in this case, tax payers should have a say in the matter because they footed the bailout. But, two wrongs don't make a right and the banks shouldn't of been bailed out in the first place. See how tricky things get when the government get's involved?
Edit: Someone above said that Barclay's didn't receive any bailout funds. If that's true, than tax payers have absolutely zero say in the matter.
hes my boyyyyyyyyyy
he went to uconn holllllla
^ agreed
Pay based on performance is a feature found in many industries (hell, I'm a bartender on weekends) and it's not going away, so the public 'debate' never held any water. I don't think it's legal to cap pay anyway.....if it were, I imagine congressmen making laws to the effect that waitresses can no longer accept tips and must scrape by on the measly $2.15 hourly. It's all rhetoric.
GOOD FOR HIM
Diamond and Blankfein should perhaps learn to understand politics a bit more though.....public emotion is a dangerous and powerful force that should not be toyed with past accomplishing one's objectives
This is what happens. People get jealous of other peoples income. They raise a stink. Politicians who only care about getting reelected try and pressure, though law or bullying, payment practices.
I do not and will never understand how someone elses income effects me. I focus my life on maximizing my utility and do not waste time on other individuals and their utility or compensation package.
Little children whine about things being unfair. Adults should not. Politicians should tell the sheep that compensation regulation is not their job, but the job of the market.
Great piece on Diamond in BB markets mag. I read it last night.
I feel like you (and a bunch of other members) would love this podcast. Richard Epstein is a legal scholar, a libertarian, and probably the smartest and most articulate person you'll ever meet. He says something to the effect of:
Seriously, EconTalk podcasts are the shiz-nit! I urge all of you guys to check them out.
Nothing bothers me more than people complaining about how much other people make. Especially banker's bonuses, auto-workers, congressmen, and most especially professional athletes.
I agree that it stems from jealousy, but more importantly there is a lack of motivation among those who complain. They would rather complain that they don't get a bonus that is equal to 100% of their base salary, but they don't want to work 80-100 hour weeks or do whatever else it takes to get the job. I actually responded to Eddie's post from the other day with similar comments.
Diamond should have just thrown his weight around behind the scenes to get what he wanted; not complain so that the public could put the government in a no-win situation. He could learn a lot from Nucky Thompson.
Even though Barclays is 2nd tier I respect Bob Diamond being the man among boys
To be honest I don't think I have been impressed by any CEO during all these hearings and testimonial. I have watched the full congress hearings with Blankfein and all others CEOs, I have watched Diamond yesterday,...they might impress the summer analysts but when they come face to face with serious adveristy and other leaders in front of them it's quite disappointing.
What do you expect dude? Anyone of the people you just mentioned could make the most cogent, salient argument you have ever heard in your life and they would still bear the brunt of the inquisition's scorn. Anyway you look at it, it's a losing proposition. They come in and get beat up by Congress and they look weak. They come in, stand up for themselves, and they look like jerks. Not too sure what you expected to see. Maybe ole Lloyd riding in on a gilded stallion swinging the sword of hope? Get real. Dude isn't Barack Obama.
Considering his bank didn't get bailed out and successfully acquired Lehman's he is in a position to speak freely and has little to apologise for. However I do agree he seems politically naive since he risks being perceived as defending the banks that were bailed out and as such is likely to incur widespread condemnation. To be fair though much of the reaction is as usual media driven and I don't foresee members of the public closing their Barclays accounts in disgust. The 50% bonus tax is a painful issue, and was seen as a reactionary move by the last UK government.
Thanks Econ, I love podcasts!
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