Employees call the shots in the City

Bonuses, bonuses, bonuses. Morgan Grenfell Asset Management pay theirs in late February and few people yet know what they are going to get. Those who think they will be little or nothing point to the pounds 400m cost and rising of the Peter Young debacle - a couple of years' profit for the Deutsche Morgan Grenfell investment banking operation as a whole. But there's another school which says that if MGAM doesn't match the bonus bonanza being experienced elsewhere in the City, then its best people are going to walk and there won't be much of a business left.

It seems unlikely that Nicola Horlick directly played that card in the events that led up to her "suspension" as MGAM's pensions supremo, but the episode has highlighted the problem in no uncertain terms. The City has become a place where employees call the shots, not shareholders or organisations. There could be no more absurd a scenario than the one being acted out at MGAM. Here is an organisation which has failed in spectacular fashion, yet if it punishes its employees, as it should, making them take collegiate responsibility for and share in the costs of their failure, it might end up without a business at all.

Perversely, then, Deutsche may have to pay the wretched employees of MGAM an even higher bonus, to compensate, as it were, for the stress and shock of a catastrophe which was collectively of their own making. It is hard to imagine a more Alice in Wonderland world. That, however, is the reality of the City these days.

There's almost a parallel to be drawn here with the curse of union power. "What? The company's lost a packet? Not my responsibility, guv. If you don't up the wages we'll all be out." In the virtual economy inhabited by investment bankers, the going rate for a job is constantly bid up, regardless of underlying profitability or real market worth.

But back to MGAM. First impressions are often misguided and it is possible that the likely impact on MGAM of Mrs Horlick's impending departure was exaggerated in Business Comment yesterday. A day on, and Morgan Grenfell was claiming the whole thing had been blown out of all proportion. Indeed, there was some sense of relief and even satisfaction at such a high flyer finally getting her comeuppance. There's almost certainly an element of male, old-school tie backlash in these sentiments.

All the same, MGAM is right to point to Mrs Horlick's apparent failure to do serious damage to the organisation. She tried to recruit a team to take with her, allegedly, and they all said no. Perhaps loyalty still counts for something after all. But we are going to have to wait until the bonus is declared and paid to judge the strength of that, aren't we?

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

.NET Software Developer (.NET, C#, ASP.NET, front-end)

£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried