Banks – Will There Be Bonus?

Banks and financial related companies usually belong to the generous lot when it comes to bonus give-out.

True enough, many of the bank staff will find themselves sometimes working until early in the morning and often put in a predicament where resignation comes drumming to their ears.

But there will be happy faces as the fiscal year edges to an end. When it comes to earnings and profits, banks make most money. And this means, a super high year end bonus in the coffers.

At times, bonus payment can be as much as 10 times of their basic salary, or even more.

But maybe not this year though. With the subprime mortgage crisis and the credit crunch triggered in the US, banks and financial companies became the mostly hit casualties. It pushed Citibank down from the world’s largest bank to 7th in less than 6 months. It hit Lehman Brothers so hard that the company had to file for one of the largest bankruptcies in history. It prompted the US government to rescue the AIG Group through a multi-billion bail out.

Recession looks inevitable.

As the Wall Street continues its downfall, Goldman Sachs, a New York based international bank holding group with major interest in securities, investment banking and investment management, has made up their mind about the bonus pay out for its 7 top executives – they will get nothing. The decision was made even though the company was recently injected with $10 billion by the US government as part of a bail out exercise that included some budget for the company’s executive pay.

Public officials in New York have warned the company, together with other banks rescued by the government, not to use the tax payers’ money unnecessarily to award bonuses to their staff to avoid public backlash. Rumour has also been spreading that the habit of major banks in awarding exuberant amount of bonuses to their executives in the recent years has become a catalyst for catastrophic losses and stimulated the current economy crisis.

With Goldman Sachs’ move, questions are lingering in the air how other banks and financial companies will pay their staff bonuses. Will there be any bonus this year?

Other posts you may want to read:

1. Top Executives Declining Year-End Bonus
2. Citigroup Ready to Lay Off More Staff
3. Goldman Sachs Ready for Record Bonus
4. No Bonus For Vikram Pandit & Co
5. Goldman Sachs to Set Up Malaysia Office
6. CIMB Urges Staff to go for Unpaid Leave
7. Citibank Job Cut Arrives in Malaysia
8. JPMorgan Tops as World’s Strongest Bank

Author's bio: Zul is the founder and principal contributor for the SKOR Career blog. He is the author of two books, The Malaysian Job Seeker's Dilemma and Buat Duit Tanpa Kerja Makan Gaji (How to Make Money Without a Job), available in major book stores nationwide. You can reach him at zulkiflimusa[at]gmail.com.