BoI staff to receive 3.5% pay rise after Gov bailout.

Martyr

With BoI receiving 7 billion euro of tax payers money, is it appropriate that staff receive a 3.5% pay rise?

HashSlinging

No it is not, Obama went ballistic when the banks over there started handing themselves bonus payments, there has to be something done about this. The irish public needs to wake up to what is going on here.

Its only a matter of time before AIB follow suit, this cannot be accepted, we are getting screwed like never before.

Is there a protest being organised or are people just going to take this..

brayblue24

Martyr wrote: »

With BoI receiving 7 billion euro of tax payers money, is it appropriate that staff receive a 3.5% pay rise?

There are no grounds for this. For once, the Greens are right. This is clearly provocative.

Jebus, they have just taken 8% of the weekely income from my house. What a country....

annon123

Oh my god. I'm furious reading this. Obviously i realise i don't know enough about it as yet to make a proper informed comment but just reacting on what i have read i'm not happy. How can they justify a pay rise using government money that's meant to bail them out when the money used is being taken from other peoples pay packets in forms of levys. Am i not mistaken in believing that they will be using the capital from the public funds pensions to fund the bail out? It's time people wake up and smell the bacon and start demanding that the banks take responsibility for their part in our current economic climate! Sry for the rant. Just getting things off my chest. Perhaps i've been misinformed and there is a perfectly plausible reason as to why they are getting a pay rise. For the moment i remain sceptical!

silverharp

RBS is doing the same but they are only paying out half the bonuses of last year, thats nice of them. The argument will be in some cases that the bonuses are contractual however

from the film network - classic

http://www.youtube.com/watch?v=dib2-HBsF08

bonkey

Martyr wrote: »

With BoI receiving 7 billion euro of tax payers money, is it appropriate that staff receive a 3.5% pay rise?

What was the basis on which the 3.5% was agreed on? Was it because the staff were already underpaid and had a valid claim to a rise?

I know it angers people, but the reality is that the vast, vast majority of bank employees had absolutely nothing to do with bringing about the need for a bailout. They're regular people, working regular jobs.

According the link offered, its for 6,000 branch workers. Lets go mad, and assume they have an average salary of 100k each. That makes 600 million Euros. 3.5% of that is 21 million Euros. Branch workers don't get paid anywhere near 100k on average, but even if they did we're talking about chump change here, when compared to the millions on bonuses paid out to small numbers of people, or to the overall costs racked up by bad investment strategy. So from the bank's perspective, cutting (or freezing) normal staff costs isn't going to make a huge difference to the issue. If they can't become profitable again without doing this, then not doing this wouldn't save them either.

So then we get to the real question...if this doesn't make a huge difference...why do it? Well...the question there boils back to why it was agreed on in the first place. Were the workers already underpaid? Have the workers agreed to other conditions which were part of the same parcel, which the bank will have to renegotiate if they don't hold to their side? What will be the cost of that?

It may be that the payrise is unjustified...that branch workers are well paid and there is no good reason for them to get their payrise. It may also be that they're not all that well paid, that they've already agreed to and implemented other conditions which went along with the payrise negotiation, and/or that the cost of not implementing it would be higher than the cost of implementing it.

A knee-jerk reaction of "how dare they", though, strikes me as somewhat missing the point.

HashSlinging wrote:

Obama went ballistic when the banks over there started handing themselves bonus payments

With respect, there's a difference between a bonus paid to those who created and/or oversaw this mess and a small payrise for the "rank and file" workers who had little or nothing to do with the mess in the first place.

Saruman

What the hell? The banks caused the recession and now they pat themselves on the bank?

What can we do about this? I have been made part time so almost 50% cut in salary and many more have lost their jobs around the country. This makes me sick.

If i could sell my house now, i would move the US. Their economy sucks but being such a vast economy they will be more stable than ours. Oh and moving to the US is no problem as my wife is American.
I do not want to move there as the working life over there is horrible compared to Europe but if i have to i will.

silverharp

bonkey wrote: »

With respect, there's a difference between a bonus paid to those who created and/or oversaw this mess and a small payrise for the "rank and file" workers who had little or nothing to do with the mess in the first place.

That not the point though, there is no economic , moral or other law that says that people get what they deserve. Running a business is a simple proposition ,make a profit or go bust. To the extent that the Irish taxpayer is now subsidising these operations they should thank their lucky stars that they still have a job given that as a country we are completely overbanked for the next decade at least.

AMIIAM

The reality is, it is our money the "government"?? is mishandling. TAXPAYERS money. Good money thrown after bad.

dhorgan3

HashSlinging wrote: »

...this cannot be accepted, we are getting screwed like never before.

Is there a protest being organised or are people just going to take this..

You are totally right. Enough is enough. I am absolutely sickened by this government. We have to pull together says brian cowen. Its ok for overpaid TDs but ordinary workers like myself on minumum wage with a family will find it tougher and tougher. We will be the ones who feel the pinch. Pat kenny took a pay deduction...wow...so what. He is stil getting paid a six fugure sum. The guys upstairs in the bank are to an extent the main reason why we are here...along with a corrupt government.

bonkey

silverharp wrote: »

That not the point though, there is no economic , moral or other law that says that people get what they deserve.

So when all the complainers say that these people deserve nothing, you agree that there is no economic, moral or other law that says that is just what they should get?

Running a business is a simple proposition ,make a profit or go bust.

At a simplistic level, yes. At a even-slightly-less-simplistic level, most companies realise that staff are a key factor in determining whether they make that profit or go bust.

Punishing some of your staff - particularly in the areas that have performed honestly and well - because other staff have cocked things up is not a smart move from a business perspective...particularly when one is talking about chump change in proportion to the scale of the problems being dealt with.

To the extent that the Irish taxpayer is now subsidising these operations

The Irish taxpayer is not subsidising anything, but rather loaning the funds which are to be repaid with interest.

dhorgan3

bonkey wrote: »

So when all the complainers say that these people deserve nothing, you agree that there is no economic, moral or other law that says that is just what they should get?


At a simplistic level, yes. At a even-slightly-less-simplistic level, most companies realise that staff are a key factor in determining whether they make that profit or go bust.

Punishing some of your staff - particularly in the areas that have performed honestly and well - because other staff have cocked things up is not a smart move from a business perspective...particularly when one is talking about chump change in proportion to the scale of the problems being dealt with.


The Irish taxpayer is not subsidising anything, but rather loaning the funds which are to be repaid with interest.

Get off the moral high ground. Yes they may be loaning...but that is not getting away from the fact that people are getting decreases in their public sector pay and others are getting pay rises. You can be as technical as you want but where is the fairness??

bonkey

dhorgan3 wrote: »

Get off the moral high ground.

I'm not the one getting outraged that there is something wrong going on here.

I lay no claim to the moral high ground, nor am I appealing to anyone's morals.

I'm asking that we not look on this as an emotional issue, but rather pay some attention to those sometimes-inconvenient things known as facts...y'know...like the fact that we're not subsidising anything, the fact that we're not talking about rewarding the people who created this mess, or the fact that good business is not just about the immediate bottom line (which, ironically, is the real reason this mess was created).

Yes they may be loaning...but that is not getting away from the fact that people are getting decreases in their public sector pay and others are getting pay rises. You can be as technical as you want but where is the fairness??

Fairness? That would be a moral issue. Are you asking me to get off that high ground because there isn't space for both of us up there?

Also, I'm not entirely sure how you interpreted my comments that this payrise may not be unreasonable to somehow mean that I also believe the public-sector pay-cuts are perfectly ok.

silverharp

bonkey wrote: »

So when all the complainers say that these people deserve nothing, you agree that there is no economic, moral or other law that says that is just what they should get?

they should get what the company can afford. I know of profitable companies that have introduced pay freezes which I would argue is prudent. It would seem odd for a technically insolvent company to pay increases given that it is only possible in the light of a gov bail out.

calex71

at first glance this makes me furious but i will bite my lip and wait to hear their justifications.

bonkey

silverharp wrote: »

they should get what the company can afford.

BoI obviously feel they can afford this....so then why shouldn't they get it?

I know of profitable companies that have introduced pay freezes which I would argue is prudent.

I know of normally-profitable companies who have given small pay-increases during periods while they were making a loss. Hell, I've worked for such companies.

A pay freeze can be prudent in some cases...particularly when staff costs are a significant proportion of a company's running costs and/or would have a significant impact on the bottom line. In other cases, it can be irrelevant or even counter-productive.

It would seem odd for a technically insolvent company to pay increases given that it is only possible in the light of a gov bail out.

Lets leave aside that the money came from the government. The bank needed an injection of cash, which it will need to repay. It received said injection. Its priority now is to make itself as profitable as possible, partly because thats what a business should do, and partly because it needs to repay its loans.

If that priority is - in part - best helped by giving rank-and-file a small pay increase, to ensure that a previously-profitable part of the business remains so, and to show that they are in no way held responsible for, or made to pay for, the mistakes of others...then that is what should be done.

If Ireland is, as was claimed above, "over-banked" for the coming years, then one place that this will be felt is through increased competition at the branch-banking level. Pissing off your branch staff by reneging on a previously-agreed payrise, despite their not having done anything wrong themselves is not a good way to gear up for that challenge.

Biting off your nose to spite your face is not good business.

To be honest, if there wasn't the idea that this is somehow connected to the public-sector paycuts, I doubt there'd be anywhere near the outrage.

Mr.Micro

It looks like the banks can do no wrong. Massive bonus payments during the boom times leading to the collapse of the giant global pyramid scheme, and now in the mess get bonus payments again. What sort of message is that for the future a) the banks know that they have us all over a barrel and b) the public lack of confidence in a system where the bank will always be bailed out, which means business as usual. It defies logic.

The money would be better spent in funding public infrastructure( not FAS by a mile) projects that would provide jobs, revenue, much needed infrastructure and big money into the economy and make the banks go back to basics and earn our respect and trust.

gandalf

TBH in the current climate and given taxpayers money is bailing them out there is no justification for this. Others are taking pay freezes and cuts (and have been doing so for over a year now) the PS have the pension levy so personally I feel the banks especially as they cannot transact business without a state bailout should at very least be freezing pay until such time that they can stand on their own two feet.

bonkey

Mr.Micro wrote: »

Massive bonus payments during the boom times leading to the collapse of the giant global pyramid scheme, and now in the mess get bonus payments again.

Did you even read the article?

Its a payrise for branch staff, not a bonus for those who created the mess.

Seriously...when you go to a teller in a branch, do you honestly see them as someone who's involved in trading derivatives and/or receiving millions in bonuses???

What sort of message is that for the future

I dunno.

Government cut pay for public sector, and tehre's outcry on the grounds that the public sector didn't cause this mess.
BoI give their rank-and-file a payrise, and there's outcry, on the grounds that...well...even though the recipients of the payrise didn't cause this mess, they should pay for it.

I'm honestly trying to figure out what message people want sent here...either those who didn't cause it should, or should not be held accountable and have to pay for it. I wish we'd make up our minds on that one.

the public lack of confidence in a system where the bank will always be bailed out,

As a member of the public, I'd be quite disturbed by the idea that my life's savings could be wiped out by the collapse of the financial institution(s) holding them. I'd certainly be disturbed if I was told that because of some derivatives trading gone really south, my pension and other savings had all been written off, along with those of thousands of other people...and we'd now be dependant on the state for our future because that self-same state wouldn't intervene on the behalf of the common man.

gandalf

bonkey I don't think anyone is blaming the bank tellers or the public sector directly for this mess. I think however that everyone has to accept that times have changed and agreements that may have been negociated when times seemed better need to be revisited especially as the banks need help from the irish taxpayer to continue trading.

Mr.Micro

bonkey wrote: »

Did you even read the article?

Its a payrise for branch staff, not a bonus for those who created the mess.

Seriously...when you go to a teller in a branch, do you honestly see them as someone who's involved in trading derivatives and/or receiving millions in bonuses???


I dunno.

Government cut pay for public sector, and tehre's outcry on the grounds that the public sector didn't cause this mess.
BoI give their rank-and-file a payrise, and there's outcry, on the grounds that...well...even though the recipients of the payrise didn't cause this mess, they should pay for it.

I'm honestly trying to figure out what message people want sent here...either those who didn't cause it should, or should not be held accountable and have to pay for it. I wish we'd make up our minds on that one.


As a member of the public, I'd be quite disturbed by the idea that my life's savings could be wiped out by the collapse of the financial institution(s) holding them. I'd certainly be disturbed if I was told that because of some derivatives trading gone really south, my pension and other savings had all been written off, along with those of thousands of other people...and we'd now be dependant on the state for our future because that self-same state wouldn't intervene on the behalf of the common man.

Its wholly inappropriate to give pay rises to bank staff at this time, especially when most others have to bite the bullet. Bank staff are not to blame of course for carrying out policy of the top brass, a bit like soldiers who may know what they are doing maybe/is wrong but follow orders anyway. The public perception though will see the very machinations of the banks, in the form of the staff being rewarded for all the damage they have caused, and worse still using tax payers money to do it. Its wrong at this time, it only further alienates public opinion.

silverharp

bonkey wrote: »

I know of normally-profitable companies who have given small pay-increases during periods while they were making a loss. Hell, I've worked for such companies.

that's cool if we are talking about private companies , if we are taking about state companies or state sponsered companies we have stopped talking in terms of free market forces.

bonkey wrote: »

A pay freeze can be prudent in some cases...particularly when staff costs are a significant proportion of a company's running costs and/or would have a significant impact on the bottom line. In other cases, it can be irrelevant or even counter-productive..

thats fine in a free market, not when the money comes out of taxpayer funds

bonkey wrote: »

Lets leave aside that the money came from the government. The bank needed an injection of cash, which it will need to repay. It received said injection. Its priority now is to make itself as profitable as possible, partly because thats what a business should do, and partly because it needs to repay its loans.

There is no guarantee that they will get the money back. The market wouldnt put money into these banks as it judged the risk/reward to be not favourable

bonkey wrote: »

If that priority is - in part - best helped by giving rank-and-file a small pay increase, to ensure that a previously-profitable part of the business remains so, and to show that they are in no way held responsible for, or made to pay for, the mistakes of others...then that is what should be done.

maybe management isnt aware of how bad things are , which is cool, time and the market will judge this later , still doesnt get around the fact that they are using taxpayer money where there is no guarantee that the state will get any or all the money back.

bonkey wrote: »

If Ireland is, as was claimed above, "over-banked" for the coming years, then one place that this will be felt is through increased competition at the branch-banking level. Pissing off your branch staff by reneging on a previously-agreed payrise, despite their not having done anything wrong themselves is not a good way to gear up for that challenge. .

The game has changed mate , every week that said bank branch staff get paid will be a bonus as far as they are concerned. Compare to say a self employed tradesman, as business dries up and gets paid less does he start doing a shoddy job, I dont think so.

bonkey wrote: »

To be honest, if there wasn't the idea that this is somehow connected to the public-sector paycuts, I doubt there'd be anywhere near the outrage.

I dont know about that , In the US people are pretty angry about bonuses being paid out,

murphaph

bonkey wrote: »

BoI obviously feel they the taxpayer can afford this....so then why shouldn't they get it?

Fixed that for you. BoI CANNOT afford this or they wouldn't have gone cap in hand to US, the TAXPAYER for capital (money).

It is totally unacceptable for any bank staff at any level to be getting pay increases. If their employers were normal private sector companies (ie, not of systemic importance to the economy) they would all be out of work as they have run out of money and would be bankrupt.

bonkey

silverharp wrote: »

that's cool if we are talking about private companies

Which we are.

, if we are taking about state companies or state sponsered companies we have stopped talking in terms of free market forces.

The banks are neither state-run nor state-sponsored. They have been given a loan from the state.

still doesnt get around the fact that they are using taxpayer money where there is no guarantee that the state will get any or all the money back.

This whole "guarantee of getting it back" has, quite honestly, nothing to do with the payrise given to the branch staff....which is the point I'm trying to make. If it is the best way for the bank to use that money, then the money should be used that way....the thing is that no-one seems to care about why the money is being spent the way it is. They've skipped over finding out the details, and jumped straight to the outraged conclusions.

Imagine that instead of the article linked to by the OP, we had one saying that despite having received no pay-increases in 5 years, and having negotiated a modest pay-rise which still left them well-behind the curve, branch staff were now getting in the neck with bank management reneging on a binding agreement, despite insisting on enforcing the rest of the agreement...there'd be outrage on behalf of the poor staff. I'm not saying that this is what happened, mind, I'm saying that no-one seems to care what the details really are.

I dont know about that , In the US people are pretty angry about bonuses being paid out,

And so they should be. Bonuses are - or should be - a reward for good performance. The bonuses they're getting pretty angry about are bonuses being paid to the people who cocked things up, being paid on the grounds that they are contractual obligations.

As a simple example, the banks have private banking "salesmen" who's job it is to bring in X million of new investment capital. If they meet that, they get 1% of what they bring in. These people are still being paid their bonuses, even though the capital they signed up has disappeared, or (worse) turned out to be toxic and has been a loss-generator. I can understand people getting angry about these guys getting bonuses. I can understand them getting angry about CEOs gibing themselves hundreds of millions / billions collectively after going to the government to save the business they drove into the ground.

But we're not talking about those types of things. We're not talking about the investment bankers, or even the high-rolling private bankers. We're not talking about bonuses at all. We're talking about a previously-negotiated pay rise for rank-and-file branch workers.

That you seem unable or unwilling to make that distinction only reinforces the point I'm trying to make. No-one cares about the details...because they're too busy being outraged.

CtrlSource

This is disgraceful, coming as it does in the wake of recapitalisation plans and massive public sector spending cuts. We're being asked to take one in the you know what from far too many angles at the moment. i don't care if this 3.5% is for branch staff or senior management. It is totally inappropriate given the current plethora of circumstances.

What will An Taoiseach expect us to swallow next? Team building trips to Disneyland for the new Board of Anglo Irish?!

jaffa20

The branch staff are on a wage between 21k and 25k. That is not massive wage. Most banking staff receive bonus payments each year depending on their performances. It still hasn't been confirmed whether bonuses will be paid this year or not but it's a one of payments that is received each year. Some bonuses reach as much as 5% if there is a promotion involved. Most businesses do this, i don't see the problem. BOI just havn't decided whether to do it this year or not. People on here blaming banking staff for a recession is hilarious. They employ 18,000 people. Yet in the article it only states bonuses will be paid to 6000.

CtrlSource

i am not blaming banking staff for the recession. Just because the group you mentioned are lower paid does not entitle them to a raise in the current climate

nesf

As much as I agree with Bonkey about this, Dan Boyle did hit the nail on the head when he described it as provocative. Rightly or wrongly this is going to incite anger in the mob who are already pretty pissed off and I think BoI are just throwing petrol on the flames by announcing this.

silverharp

bonkey wrote: »

But we're not talking about those types of things. We're not talking about the investment bankers, or even the high-rolling private bankers. We're not talking about bonuses at all. We're talking about a previously-negotiated pay rise for rank-and-file branch workers.

I dont know when it was negoiated but unless it was agreed in the last month then all parties should accept that things have changed. We are headed for the Zombie bank syndrome a la Japan , so as entities they are going to be comercially dead, with teams of underwiters and new loans departments sitting around twiddleing their thumbs. Any productivity measures will go out the window in most cases even at branch level. If the taxpayer is being stiffed with the bill for this BAILOUT then they have a right to express concern.

BroomBurner

IF this is true, then it will be entirely inappropriate.

Regardless of WHO will be getting the payrise, a payrise can only be paid when a company is posting profits. That's the long and the short of it. It is unsustainable to do otherwise.

Bank of Ireland are in financial trouble. They would hardly be posting enough profit to give everyone a 3.5% increase when they are about to receive a share of €7billion of taxpayers money.

So, if a company is not profitable, is receiving funding from the government to bail them out, then why would all staff members receive a payrise?

It just makes absolutely no sense.

OhNoYouDidn't

If I were a civil servant I would be outraged by this.