I recently wrote a blog attempting to explain why business has managed to wrangle itself a ‘boring' tag, concluding the school curriculum, and therefore the government, was to blame.
Well, I had another little read of it the other day and it only served to remind me of another stigma attached to the industry – that investment bankers, outside of the city anyway, are often mentioned in the same breath as lawyers, ie not liked all that much.
I was also reminded of it at an awards ceremony last week, in which the host, TV comic Jimmy Carr, said something along the lines of: “Well, eh? Here I am, among all these city types. Isn’t it great.”
His comment hinted at what is undoubtedly true of much of the country: there is a ‘them and us’ mentality; the ‘them’ referring to city workers and, in particular, investment bankers.
The reason this exists is pretty obvious, but was thrust into the faces of everyone again this week: money.
According to reports, a city banker at Barclays netted £22m in salary, shares and bonuses last year as well as owns as much as nearly £65m worth of stock in the group.
The chap’s name is Bob Diamond, head of investment banking at Barclays, and he has become one of Europe’s highest-paid bankers, dwarfing the salary of his boss, Barclays chief executive Peter Varney (only in investment can the coffee boy make more than the chief executive).
The view among, erm, ordinary folk I shall call them - ie those on between £15,000 and £30,000 a year - will never be of a congratulatory nature.
So, how do we break down Bob Diamond’s extraordinary pay packet?
Barclays said in its 2006 annual report that Mr Diamond was paid a basic salary of £250,000, with a £10.4m cash bonus on top, plus £4.5m in deferred shares, topped up with £7.7m in cashed-in shares.
It also emerged Mr Diamond owns shares in the group worth £64.9m, accumulated over his 11-year tenure at the firm, and is in line for a further bonus of up to £15m next year, not including the 2.3m shares he is set to gain in the group as part of an ongoing performance-related deal.
These are not figures that most people can even get their heads around, much in the same way that most people can’t quite grasp just how long a light year actually is.
Of course, it doesn’t really matter. Investment banking is big business and those that do it well are rewarded with cash that is available to be spent on bonuses and salary, so why not?
But while the gap between the city big earners and ordinary folk remains so vast, ‘them and us’ will never change.
If you have any comments you would like to add to this article or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected].IFAonline
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