“It's no longer about 'you', it's now all about 'us'”
Merrill Lynch CEO John Thain is changing his firm's bonus philosophy, tying bonus payouts more closely to the performance of Merrill as a whole, rather than individual employee results. Thain's intentions are good - fostering a more consultative and cooperative culture at Merrill, hopefully avoiding a repeat of the situation last year, where 100 or so fixed income traders wreaked havoc on the firm's profits and screwed up what promised to be a very good year for the firm. But Merrill's boss might have difficulty persuading his employees (and perhaps as importantly potential new hires) that they should rely on others when it comes to their year-end bonus pay-outs.
According to Monday's "Here In The City" quick reader poll ...
Many bankers are happy to have their bonus allocated on the basis of the performance of their desk, or immediate team, the majority still expect to eat what they kill and be paid out based on their own performance. Very few bankers are content to be rewarded first on the basis of how well their firm does as a whole.
Poll results:
50.7% of respondents said that they expected to be rewarded on the basis of their own performance
48.2% said that they were happy to be rewarded on the basis of their desk, or team, performance
1.1% said that they were content to be rewarded on the basis that they get paid first on how well their firm as a whole does.
Will this information surprise, or concern, Thain? No, determined to create a cohesive team-like atmosphere at Merrill, he won't want those who put themselves first at his firm anyway. And in this approach Thain, may well be leading what could turn out to be a sea-change for the industry - it's no longer about 'you', it's now all about 'us'.
Source: Here Is The City
4 comments:
Finally, at last gone are the days when bankers could get a bonus the size of what a 1 bedroom flat would cost outside London! Its great to hear things are looking up, everyone has to pull together, its teamwork or else and that's going to reflect in the firms performance
How will they differentiate between the hard workers and the lazy ones, you could be working 10 ten times than the rest of your peers for little in return, what's the value in that. Bonuses should reflect your performance, the penalty of the company failing to adequately put in place controls to monitor risk etc. is not the failing of everyone, the finger points at those who have the responsibility of controlling it in the first place. Thain idea is good but it also comes with punishment
Safe to say we will no longer be hearing "my business is my pleasure"
Its a wake up call for the financial industry
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