Swedish banks' bonus bonanza continues
TT/Charlotte Webb · 29 Sep 2009, 09:57
Published: 29 Sep 2009 09:57 GMT+02:00
- Reinfeldt to G20: 'Cap bank bonuses' (18 Sep 09)
- Profits slashed at SEB (20 Jul 09)
- SEB executives forego pay rises after media storm (14 Mar 09)
Amongst the four major Swedish financial institutions, SEB is expected to shell out 2.4 billion in variable compensation – a 200 million kronor increase on last year's payout, according to the Dagens Nyheter (DN) newspaper.
Moreover, SEB is only expected to earn a modest 1.1 billion kronor this year, less than half of the bank’s projected bonus payouts.
The bank's profit-bonus relationship bothers Göran Lilja, who manages SEB’s relations with employee unions.
“Existing bonus agreements take time to chance that becomes problematic to justify high variable compensation when the bank as a whole has had really bad results,” he told DN.
While Nordea, the largest of Sweden's four major banks, has not specifically accounted for variable compensation payouts, at least a billion kronor has been reserved for bonuses in the bank's half-year budget.
And Swedbank, a participant in the state's guarantee program, is expected to pay 800 billion kronor in bonuses, despite losing 8.9 billion kronor this year.
Meanwhile, Handelsbanken is expected to pay out an estimated 200 million kronor in employee bonuses. Funds has also been set aside for the bank's staff profitsharing foundation, Oktagonen.
Most of the big bonus money paid out by the banks goes to the brokers, analysts and fund managers working in their investment banking divisions, according to DN.