More on Bonuses

Bloomberg had up today a story on attempts by British regulators to rein in bank bonuses, which - unfortunately - meandered a bit.  The article started by saying that "employment contracts [may] hinder efforts to make changes this year". Why? Because some bonuses are guaranteed - when a person is hired, a certain pay-out is written into his contract (for instance) for the first two years. 

It is only at the end of the story that it is acknowledged that it's just a few lucky ducks (usually, those who recently changed jobs) who have guarantees; most do not. So at the least, most bank workers' bonuses can be reduced to zero with no problem. Perhaps those who end up with nothing will cry about the unfairness of the situation, as those with guarantees receive a huge sum for equivalent work, while their team members get nothing. But that's a bit like a model claiming she's being discriminated against because her hair is black rather than blonde. The bonuses that financial-services workers receive are patently unfair compared to the compensation of everyone else in the world; so if fairness is what they want, then the best way to achieve it is by getting no bonus at all.

Indeed the very end of the article makes it sound - and here I myself fell off my chair, because I thought the sanctity of a written and signed paper could not be challenged - that contracts could just be put aside. "The banks may have precedent and sentiment on their side if they choose to cut guaranteed payments. English courts have been reluctant to intervene in disputes over bonuses." So, apparently, it's not the law or contracts which may hinder efforts. If there's a will, there's a way. The question is, Will there be the will?