WHY THE BONUS CULTURE NEEDS TO BE DEFENDED David Blake The B-word sums up everything most people have come to hate about the financial industry. The Bonus Culture is convenient shorthand for what has gone wrong in the markets. When people try to find out just how the great catastrophe of the past two years could have happened, they focus on huge risks being taken for huge bonuses. When Congress wants to punish Wall Street, it threatens to take the bonuses away from the people who work there. When the British government wants to show it is getting tough with the City it gets Sir David Walker to produce a report saying that bonuses should be dribbled out over years instead of being paid all at once. When commentators want to say how banks should be run they warn of a huge gap between the interests of the shareholders and the managers as if financial companies were unique in having absentee owners (in fact they are far less absentee than in most industries because so much compensation is paid in shares that large chunks of these firms are owned by their employees.) So poisonous has the word become that even the BBC, about as far removed from the City as you can get, has felt the need to ban all bonuses. In polite society, no one seems willing to say straight out that they do not like other people earning so much more than they do, but that is obviously part of the underlying resentment that is there even at times when the banks have not had to be bailed out at enormous cost to the taxpayer. People will not say "bond traders should not be able to earn $10m". Instead we get a stream of rationalisations about why the compensation system in finance, the "bonus culture", is at the heart of the problem. Let us look at the issues one by one. First, why are bonuses the centre of attention rather than total pay, to such an extent that some banks who knew that they might be restricted in bonus payments simply doubled the basic salary of their key staff? Outside finance, bonuses are a very small component of total earnings because people need to be sure of their income flow. The extra money is nice, but in most jobs even the most successful get bonuses only in the tens of per cent. Finance is different, partly because even when it was run more sensibly than it has been in recent years the revenue fluctuates a lot. Firms need the flexibility that comes from holding their fixed salary costs down to a level where they can meet them even if things go bad. But that means that when things go well, there is enormous upside, with bonuses in the many hundred percents. Most people at big investment banks do not think of a bonus at all. They just get told at the end of the year what their total pay will be and the salary they have received each month is effectively an advance on it. None of that alters the fact that the total amount paid is in many cases quite mind-boggling to people outside. But if the people doing the business do not get the money, who should? Take Goldman Sachs, which is probably the most successful investment bank over the past years. (To declare an interest I worked there for many years.) In the second quarter it had revenues of $13.76bn. If it was a newspaper, enormous amounts of that revenue would have gone to buying newsprint, paying distributors and so on. But in Goldman's case, the equivalent costs only came to around $2bn. So there is more than $10bn to be divided between the shareholders and the staff. Goldman says the shareholders will get $3.44bn of that and the rest ($6.65bn) is earmarked for the staff. Anyone at an investment bank will know that that money can melt like snow before the end of the year if things go wrong. But the share of 49 per cent of the gross is roughly what banks usually pay. Many people say that the workers are getting much too good a deal in this. But nobody ever seems to explain what the shareholders have done that is so wonderful that they should get a lot more of it. There is a long tradition that recognises that the people who do the work should get their share, starting with the King James Bible: "The labourer is worthy of his hire." There was even once a political party in Britain which went to the extreme of saying that the purpose of its existence was "to secure for workers by hand and brain the full fruits of their labour", though admittedly they had to abandon that as impractical. But no one has yet come up with a persuasive explanation of why there is a moral need to give shareholders a bigger share and employees a smaller share than current practice. There is no reason to think that shareholders have a longer-term outlook than employees. Most employees expect to stay at their firm for several years. Equity investors look at performance every day. Even if an investment bank paid a much higher proportion of revenue to its shareholders than it does now, once the change had happened it would need to produce continuing and rapid profit growth. Trading operations in big banks aim for big profits because that is what the shareholders want. There are perfectly legitimate questions to ask about the role of the financial sector, especially given that it only exists in its current form because of huge government generosity. It goes against all fairness that failure should be rewarded on an enormous scale. The concentration of power in the market in a few big players does not just risk dangers if one of them fails; it raises concerns about the extent to which they can make excess returns at the expense of the rest of the economy. These are big issues which governments in the US and UK have chosen to run away from. But those problems will not be addressed by playing around with superficial controls on what the banks pay their staff. The writer is an executive in an asset management company. He writes in a personal capacity 为奖金辩护 David Blake 奖金一词集合了大多数人对金融业的各种不满。人们信手拿过奖金文化这个词,以概括市场中出现的问题。当 人们试图找出过去两年大灾难发生的原因时,他们聚焦于巨额奖金带来的巨大风险。当美国国会希望惩罚华尔 街时,他们威胁要拿走华尔街员工的奖金。当英国政府希望展现对伦敦金融城的强硬立场时,他们让大卫 沃 克爵士撰写了一份报告,宣称奖金应逐年发放,而不是一次性支付。当评论员希望就银行的经营方式发表评论 时,他们对股东和经理人之间巨大的利益鸿沟提出了警告,就好像只有金融企业才有虚位的所有者(实际上金 融企业所有者虚位的情况远比其它行业轻得多,因为大量报酬是以股份形式支付的,以至于这些公司有很大一 部分归员工所有)。 因此奖金一词已变得非常令人讨厌,就连与伦敦金融城风马牛不相及的英国广播公司也感到有必要取消所有的 奖金。 在上流社会,似乎没有人愿意直言不喜欢其他人的收入比自己高很多,但即便是在银行还没有被迫接受由纳税 人付出巨大代价的纾困时,这显然也是人们潜在不满的一部分。人们不会说“债券交易员不应该挣1000万美元”, 相反,对于金融业的薪酬制度——即奖金文化——为什么是问题的核心,我们有一系列理论解释。 让我们来逐一分析一下。 首先,为什么是奖金,而不是总收入,成为人们注意的焦点,以至于一些知道自己的奖金支付可能会受到限制 的银行,索性把关键员工的基础工资提高了一倍? 在金融之外的行业,奖金在总收入中构成的比例非常低,因为人们需要能够确定自己的收入。有额外的奖金当 然不错,但在大多数行业中,即使是最成功人士的奖金也只能按百分比计算。金融业不同,一定程度上是因为, 即使是在较近几年经营得更为理智的时期,收入也会大幅波动。将固定薪资成本压缩到即便境况不好也能满足 的水平,可以为公司带来所需的灵活性。但这意味着,当情况变好时存在巨大的上升空间,奖金比例将按倍计 算。大型投资银行中的多数人根本不考虑奖金。他们只是在年底时被告知,自己的总收入会是多少,每月的薪 水实际上是预支的收入。 所有这些都不能改变以下事实:在许多情况下,支付总额会让外部人士感到难以置信。但如果做业务的人不能 拿钱,那么谁应该呢? 以高盛为例。过去几年,高盛或许是最成功的投资银行(声明利益关系:我曾在高盛工作过多年),今年第二 季度实现收入137.6亿美元。如果这是一家报纸,那么很大一部分收入将用于购买新闻纸、支付分销商报酬等。 但就高盛而言,相应成本只有20亿美元左右。因此会有100多亿美元在股东和员工之间分配。高盛表示,股东 将得到34.4亿美元,其余部分(66.5亿美元)将分配给员工。任何一个在投行工作的人都知道,如果形势恶化, 这些钱在年底前就会像冰雪消融一样消失无踪。但银行通常支付的比例是总收入的49%左右。 许多人说,银行员工的这笔交易实在是太好了。但似乎从来没有人解释,股东做了什么漂亮的事而应该获得多 得多的回报。承认干活的人应分享成果,这项悠久的传统始于钦定版《圣经》:“工人应该得到工钱。”英国 甚至曾经有一个走向极端的政党,声称其存在的目标就是“确保体力劳动者和脑力劳动者获得全部的劳动果实”, 但无可否认,由于不切实际,他们不得不放弃了这个目标。但还没有人提出令人信服的解释,说明为什么相比 于当前的实际做法,股东在道义上应该获得更大份额,而雇员应获得较小份额。没有理由认为股东比员工更有 远见。多数员工期待会在公司呆上好几年。股权投资者每日都在关注业绩表现。即使一家投行向股东支付的收 入比例比现在高得多,一旦发生变故,它将需要实现持续而迅速的利润增长。大型银行的交易业务以高额利润 为目标,因为这是股东想要的。 关于金融业的角色,有一些完全合法的问题可问,特别是考虑到由于政府的极度慷慨,金融业只以当前的形式 存在。大规模奖励失败违背了所有的公平原则。市场权力集中在少数几家大型机构手中,不仅会在其中一家倒 闭时带来危险,还会让人们担忧,他们牺牲其它经济部门的利益而获得超额回报的做法,能达到什么地步。 这是美英政府选择回避的重要问题。但耍耍手腕,表面上控制一下银行支付给员工的报酬,并不能解决这些问 题。 本文作者是一家资产管理公司的高管,本文仅代表他个人观点。