The Financial Services Authority (FSA) finally grew some teeth this week and threatened to suspend banking licenses for any firm not falling in line with its stringent new rules on employee bonuses. Banks and other financial institutions have come in for a rough ear bashing from the public, government and regulators alike over the last 18 months as everyone tried their hardest to deflect blame for the current economic crisis away from themselves. However, this is the first time they have actually been challenged to adopt reforms that they weren’t keen on themselves, and for once it appears the FSA isn’t likely to back down.
This will be causing some monumental headaches for human resources right across the City as they attempt to satisfy contractually certified bonuses for their staff without breaking the FSA’s new guidelines. Times like these are always trying for employee morale, and can leave many with a sour taste in their mouth over their perceived treatment by the company. So what better time than to try and butter everybody up with some promotional gifts? Sure, even the nicest looking promotional pens in the world aren’t going to cushion the disappointment of receiving 100% of your bonus in locked shares and bonds rather than cash, but for the poor souls having to write the letters and break the news a few corporate gifts here and there can make a world of difference.
Let’s face it, if you’ve just been let off the hook on having to honour millions of pounds worth of contractually required bonuses then you’re going to have a rouble or two spare to spend on the rest of your staff.