• ‘Labour stoked synthetic anger over Sir Fred deal’
• Hands' Terra team to give back their £70m bonuses pot

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Having read the comments so far... it's clear that a lot of people dont understand the issues - some who think the employees were dodging tax, when in fact they'd much rather it counted towards their pension!
In this particular case, it's clear that the staff were all told there was a guaranteed pool of cash in order to make sure they stayed around to collect it. This pool was not caveated at the time, and in fact the staff were told the pool was a minimum and they could get a BIGGER pool if things went well. Some people will have decided not to leave then (when there were still jobs around) despite there being a good chance they would be made redundant when Commerzbank completed the takeover. Now they'll be kicked (out) whilst down.
The first time the pool was caveated appears to be in late December... when the company financial result was already largely known... which smacks to me of moving the goalposts! I don't feel sorry for the big fatcats at the top of these organizations... I feel sorry for their STAFF, many of whom will have been depending on the pool as part of their normal remuneration. Ultimately though, we won't decide who gets the cash and who doesnt based on need... it'll be decided by contract and employment law. I say pay it to everyone who is ENTITLED TO IT AT LAW... but let's not fund more lawyers by making them sue for it. I suspect the ones suing are the ones who a) have the most to gain and B) can afford the legal costs. What about the rest?

- Kab, london

The issue of bonus should not be driven by mob public opinions as favoured by G Brown on the Sir Fred's pension. This issue should be resolved by the law going through proper legal aspect - everyone is protected by the law. If the country is to be run by mob public opinion and swaying politicians, then why have a justice system?

- For Justice, London

The comments by James Macleod and Barryb are typical of those of the banking system. Arrogance, greed and a self belief system that has frankly brought most of the western world's economies to the brink of disaster, and they are STILL saying they deserve loads of money! Wake up and smell the coffee guys, your days are numbered.

- Sbq, London

I am not into Banking myself but I wish somebody would read my fellow commentors and do something.

- David., Chertsey.UK.

The whole mechanism and structure of banking bonus payments needs to be laid clear since it is causing so much upset. Here's a start:
Truth no 1: The idea that bonuses are paid for past performance is a universal myth. Ask any HR director at any of the investment banks. You don't pay someone a huge sum for work they have already done. You pay them a bonus so they don't leave. Of course they might leave anyway, which is a whole other issue. But if you want someone to leave, maybe because you don't need their services any more you just don't pay them a bonus or you pay them a small one. Then they scream and shout and resign. Similarly if the people you do want to keep have nowhere else to go then you don't pay them a bonus (kind of like now). This is all regardless of how well they might have performed in the previous year. This is very clearly illustrated by the Dresdner lock-in bonus pool. The bonus wasn't supposed to reward superior performance, just to encourage people to stay while they were needed. Now, a clever HR director would have made sure there was a get-out-of jail card somewhere in the mix so they could avoid paying bonuses to anyone they didn't want to keep. That's what is happening here. How can it be seen as a sensible use of shareholders funds to pay large lump sums to people who can no longer add any value to the firm ? That's how the guarantee culure came about. The bonus system is a classic model of game theory and it ain't going to change

- Barryb, London

The next group on the gravey train - Lawyers !!!
They know the UK is a soft touch - Other european countries would laugh but here the fat cat lawyers are as highly represented in parliament and the Lords .
I still wonder why the FSA were worried that failures quit. They would have taken whatever they could get as a salary if the government hadnt protected the bank.
Best idea was to let the worst banks fail completely and those cocky bankers would have come crawling.

- Terry, Hennebont France

Gross ignorance on taxation. Firstly these bonuses attract the following taxes:- 1) top rate 40% income tax; 2) 1% uncapped employee NI; 3) Employer NI of 11% is paid on these bonuses. So for every $100 paid in bonuses Greedy Gordon gets $52!! Tax, tax, tax. As regards the losses at Dresdner you need only look at where they lost the money. They lost the money in Germany making stupid loans to bad credits in mid size companies, Commerzbank did exactly the same!! The weasel words from the Commerzbank board are just that. These are contractual payments duly sanctioned and payable in law. If Commerzbank thinks they can wriggle out of this one then they are in for a rude shock. As usual Continental banks hire and fire in London in a way they would never dream of doing at home, no new news there then!

- James Macleod Ritchie, Oyster Bay Cove

No Ant I very much doubt these people caused the problems. These people probably made significant amounts of money for the bank last year and if they hadn't the losses incurred in other areas would have been even bigger.

- Bruce, London

Scott, please explain so that I and others who do not work in the City can understand, then. The bonus is not really a bonus, just a more "efficient" way of paying a salary (which means that the employer or employee will avoid what, NI, other taxes, that they would otherwise pay). The Inland Revenue clearly have another loophole to close down.

If the bonus is guarenteed, then it is not really a bonus. Salary packaging is sleight of hand, nothing else. If the bonus is for success, then the catastrophic failures in the banking sector, the bailouts with "inefficient" public money, is not justifiable. It doesn't matter how well an employee has done, if his company is only still in existance thanks to government support.

And don't forget that doctors, teachers and other, "ordinary people" as you put it, don't tend to get bonuses at all for doing their jobs properly.

- Rob, London, UK

I can't believe what I am reading - do you people including sue really not know that banks bonus payments are subject to income tax!???? how do you think the tax revenue for london is so large! bcos of the bonuses that have been paid. Without it our hospitals and schools would be in even more dire straits than they are!! people comment when they don't even understand what they are commenting on - it's like a banking witch hunt by jealous people who spend too much time moaning and not enough time working hard!

- Nick, london

why not just pay the bonuses in company shares, not money? Then the company is strengthened, the staff will be more motivated to make their company a success- and the rest of the world won't want to lynch these insanely greedy people...

- Suzy, Essex

These people caused the problems.

Let them get NOTHING.

Do they know no shame.

- Ant, London

Daveb,

what most people fail to understand is that most bonuses are not tied exclusively to overall company performance, and they are not vaguely specified either. there will be an exact level of criteria that it will be measured by.

a good way of thinking about it is like sales commission. imagine you are a car salesman for General Motors, on a relatively small basic salary but you get your money from commission. you have sold, I don't know, 2000 cars this year. and you expect to receive your annual commission of £80K - you worked 80 hours a week, took no holidays and delivered considerable actual revenue to GM. now GM are virtually Bankrupt, how do you feel about people with no idea about how your compensation works, telling you not to expect your commission?

that's the way a bonus works for many people.

- Scott, London

Rob,

this part is particularly staggering:

"This is, at best tax avoidance, and probably tax evasion. It means you are so greedy that that you cannot even face paying taxes on your huge bonuses"

um... this is very, very wrong, and shows the frightening levels of hysteria over reason that these topics incite in what would otherwise be ordinary people.
it is apparent you have little or no experience in this area, but I can assure you it is not tax avoidance or evasion - it is a revenue approved method of salary packaging. it is no more a method of tax avoidance, than a company car or sales commission. it is hardly hidden either.

any savings are on the employer side, not the employee side. and the recipients will pay the maximum 40% tax on their tax avoidance scheme!!!

- Scott, London

If a bonus is guaranteed, then surely it's a salary? In which case, if these bankers have avoided taxation by receiving a "bonus" instead of a salary, I'd like to see HMRC chasing them for every avoided penny. (A much better use of HMRC's time than trying to convince the law Lords that a Jaffa Cake was a biscuit)

On the other hand, the rule of law must be paramount. If there is a contract to pay them their bonus and if there are no legal grounds for witholding it, then paid it should be. This will rightly be decided by the courts, not by rabble-rousing politicians glad to have found some scapegoats to distract attention away from their own failings.

- Nigel, London

stephanie, whilst i agree to a certain degree, if my company had made a loss, no matter how hard i worked, i would not get a bonus...perhaps if the same was applied to the banking industry, people wouldn't have taken such huge risks, but if they are always entitled to a bonus who cares if they lose money

- Daveb, london

Am I understanding this correctly - that Bonuses are not subject to Income Tax??
That can't be right.

Why are we getting nothing in all the media about bringing in Income Tax of 98% to recoup some of the extraordingly high earnings of all.

- Sue, Carnforth England

Daveb
I am in the same position, and I understand but we are in the minority, blaming the bankers is unfair, they are not all responsible and people being happy that they are not paid for work they have undertaken is not fair.
The state of the economy has collapsed for many reasons, greed being one of them, we look to the government for guidance but like with any crisis, mistakes are made. We are all in this situation and it is/will affect us all in different ways, but attacking Bankers for claiming their salary is really not the way to go.

- Stephanie, Surrey

Daveb "why do I blame?" - why is it always necessary to find someone to blame?

I have little sympathy for bankers who have had legitimate "rewards for failure" withdrawn, however, I agree with Stephanies point:

Whilst it might be conveniant to do so, scapegoating bankers doesnt really get to the nub of a complex, macro-economic problem that has been caused by a vast array of different market participants, including almost everybody (inluding those sqwawking "no shame", "sack them all").

Pause for reflection might benefit us all.

- Nick, Islington, London

THese bankers are greedy, and arrogant, and have no concept of how they appear to the general public.

Scott said, "a guaranteed bonus is salary. it just does not have the ancillary costs associated with it - taxes, pension contributions etc. it is used as a form of more efficient salary packaging, that's all."

This is, at best tax avoidance, and probably tax evasion. It means you are so greedy that that you cannot even face paying taxes on your huge bonuses, while castigating others for daring to work in the public sector, in research, in engineering or anywhere where massive piles of cash are lot the main motivation.

A gaurenteed bonus is an oxymoron. The greedy, utterly arrogant, incompetent fools who have spent the last thirty years getting more and more avaricious, but less and less capable of making a decison with a longer outlook than the end of the week, have been rumbled.

Its not pretty because they have taken the whole economy with them as their ghastly neo con Thatcherite crumbles around us.

And they want bonuses?!

- Rob, London, UK

Although bankers are hardly whiter than white, I think there is a certain amount of scapegoating going on here. Banks and credit firms were certainly reckless in their lending. They offered cheap borrowing deals but that does not mean people were obliged to take them up, but they did. It's this consumer borrowing which has partly led to the current crash.

- Mcw, London

Will we get legal aid?

- Wallytrader, London

Peter Bench,

you've missed one point - Bonus's are not subject to the same EMPLOYERS level taxes; payroll, ni etc. nor are they pensionable, subject to redundancy calculations etc.

of course the recipient still pays 40% personal tax.

- Scott, London

stephanie,

I rent, i have no debt, i have 15k of savings, no credit or debit cards...who do i blame when i am now punished (no interest) if its not the bankers, and its not me...?

- Daveb, london

First of all, all bonuses if paid in cash are taxable - if paid in shares then they could become worthless (ask the Lehmans people if they want their shares). Second, I don't recall people complaining in the past about bonuses when tax was paid. Third, a contract is a contract. end of.

- Peter Bench, London

People are so busy blaming bankers for the collapse of the economy, maybe its time that individuals look at themselves, in their over inflated houses, with 100% mortgages and store cards for every shop on the high street, and take some blame for the state of the economy.
People feel they have a right to own a property even when on a 20 k salary, it is not a god given right to own a property it is a luxury.
Employees of Banks in are people who have worked very hard to get where they are, they put in up to 15 hours days and have bills to pay and families to keep, they are not all responsible for the risks that have been taken, many people work in parts of the bank that are profitable or work in support services, why should they not be paid for the work they have done over the last year. If I did not recieve my full salary I would be furious.
So before people come out with "these people have no shame" think! these people have worked very hard and now have nothing to show, how fair is that!

- Stephanie, Surrey

Scott points out:
"a guaranteed bonus is salary. it just does not have the ancillary costs associated with it - taxes, pension contributions etc. it is used as a form of more efficient salary packaging"

Look past the word bonus, understand SCAM!

- Steve, Dalston, Hackney

Let them sue and waste more money by simply making sure they fail.

- Mike, London England

I can understand this to a certain extent. Some areas of banking are still very profitable. Flow interest rates trading and sales for example has done well and there are claims that some firms and individual traders have had record years in terms of revenue in 2008. Just because the bank has lost money overall does not mean that every employee at that bank has lost money on an individual level.

The problem is that other parts of the same banks have lost money (structured credit and securitisation, for example). I suppose bankers would argue that when structured credit and securitisation areas of banks were raking it in, interest rates bankers' bonuses were not subsidised, they were still awarded bonuses based on their personal P&L/revenue. Yet now that banks have lost huge amounts overall, bankers who are still doing well are expected to subsidise the overall operation.

It must be a little galling that if you have made revenues of USD30 million+ in 2008, that you get a 6 figure bonus and it's perhaps a little short sighted of banks to award measly bonuses (relativey speaking) to bankers who are shoring up the overall operation's finances.

- Mcw, London

for those who are unaware:

a guaranteed bonus is salary. it just does not have the ancillary costs associated with it - taxes, pension contributions etc. it is used as a form of more efficient salary packaging, that's all.

look past the word bonus, and these people are not being paid salary.

- Scott, London

Of course these hard-working bankers deserve every penny they were promised, even if their employers and their clients have lost 90% of their wealth.

- Bloke, London

These people have no shame.

- David Holland, London UK

If Commerzbank put an exclusion clause into their December bonus letters why aren't the lawyers immediately explaining this to the bankers and telling them that they have no case? Perhaps the clause has arguable flaws?

- Isabel, Woking

GREED GREED GREED

- C Cusano, Bedford

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