Why Can't I Get A Bonus Guarantee ?

Here's an interesting e-mail exchange we recently had with one of our readers.

Trader

'I've just been offered a job (to start in the New Year), but the firm won't offer me a bonus guarantee for 09. My potential new boss told me that the days of guarantees are over. Is that really correct ?'

Here Is The City

'Yes, for the most part, bonus guarantees are a thing of the past. It will be politically difficult for most firms, especially the many who have been bailed out by their governments, to use these funds to guarantee bonuses'.

Trader

'I find it hard to believe the market has changed so quickly. Once these writedowns are behind us, surely it will be back to business as usual - once the cash markets recover and M&A returns with a vengeance'.

Here Is The City

'It's more a question of bailout monies, rather than writedowns. Until they are paid back (and that could take years), there are unlikely to be too many bonus guarantees floating around. I think you also have to look at the markets. M&A doesn't look like recovering any time soon, and a lack of leverage will mean that profitability across the board will be reduced going forward. Firms will just be much more careful with their bonus pennies going forward. You must also remember that compensation structures are changing - it's now about firm, team and then an individual. Giving out guarantees to individuals upfront kind of defeats the object'.

Trader

'But why should someone like me be penalized for the mistakes made by colleagues in structured credit ?'

Here Is The City

'170,000 financial markets professionals have been laid off in the last 12 months, yet less than 1,000 of these were responsible for the writedowns. Investors have seen their stock in most financial institutions fall by up to 90% - and they weren't responsible at all. And taxpayers have seen their hard-earned tax dollars used to bailout banks. Yet taxpayers weren't to blame either. Quite frankly, most of us couldn't care less about you or your guaranteed bonus (or lack of it). You need to get up and smell the coffee. Thank your lucky stars that you have been offered a new job in this environment'.

READER COMMENTS

1. 'Definition of a bonus: 'A extra amount of money that is given as a reward'. If you get a bonus, then consider it - a bonus!'.

2. 'This idiot shouldn't have a job - let alone a bonus!'.

3. 'Can you please let me know where this guy lives - I want to go 'round and smack him in the mouth!'.

4. 'This guy is clueless!'.

5. 'Is this guy the thickest, most self-centred person in the industry ? And has he been living with Santa in the Grotto for the last 18 months ?'.

6. 'Does someone actually want to employ this dork ?'

JefferiesAnd the Best Place to Work in the global financial markets 2017 is...

Register for Financial Markets News Alerts