“Now then Brasher, what’s all this I hear about a clampdown on bonuses?”
Sir Winston Albert Grant, Chairman of MegaBank Corp (MBC) and generally known by his colleagues as WAG, roared across the table at Roger Hughes, the new Chief Compliance Officer for MBC.
Roger was called Brasher by WAG because every time he came anywhere near him, the Chairman broke out in hives. Like a bad rash, Brasher had already achieved said outcome just by walking into WAG’s office.
What was the issue this time?
The usual one – bonuses – although this time it was conclusive.
The latest G20 meeting had ruled that all bankers were going to be taxed at 99% for any bonus payments valued at more than $1 million in any given year.
Roger knew that WAG would not like it, but don’t shoot the messenger and all that.
“Sir Winston”, no-one called WAG ‘WAG’ to his face, “I knew you wouldn’t like to hear this, but the G20 has just agreed a joint global regulation to tax all bank bonuses at 99% if we give anyone at MBC more than $1 million in any given year.”
“F***ing outrageous”, sneered WAG as he laid his gun on the table. Sometimes he actually did shoot messengers, or so the story went. “So what are you going to do about it?”
“Me sir”, blurted Brasher. “What can I do about it sir?”
“Well you’re the f***ing Chief Compliance Officer, so sort it out.” WAG broke out in a couple more hives around his neck, and his colour wasn’t good either, a kind of purple puce. And this was just the start of their meeting.
Brasher thought for a minute and decided to lay out the options.
“Well sir, let’s look at our options shall we?” he hesitantly proposed.
“Good”, said WAG, “and what are the f***ing options then?”
WAG had obviously been to the Gordon Ramsay School of Charm … and he could be charming, as long as you weren’t meeting him privately in his office on the 92nd floor of MBC in downtown Canary Wharf land.
“First, we comply with the rule and all the guys will relocate to Geneva or something.”
“Well that’s no f***ing good”, two more hives appeared on WAG’s neck. This was not looking good.
“Second, we don’t comply with the rule, and get a huge fine from the FSA.”
“F**k me Brasher”, WAG’s profanities were starting to get on Roger’s nerves, ”come up with something useful will you?”
Roger thought about it. There was one idea he had, but wasn’t sure if it would work. Worth a try however.
“OK, then there’s the third option”, he teased.
“Tell me then,” WAG responded with clear irritation in his tone.
“Well, I’ve heard about this scheme that is legal and can avoid most tax”, Roger began.
WAG nodded eagerly, as he muttered “get on with it” under his breath.
“Basically, we pay our bonuses using EFRBS.”
WAG almost went apoplectic, “you think we’re using f***ing RBS for our bonuses, you’ve got another think coming Brasher”, he yelled reaching for the gun.
“I didn’t saying f***ing RBS Sir Winston”, Brasher squealed, “I said EFRBS, which stands for Employer-Financed Retirement Benefit Schemes.”
“What the f**k are they”, WAG was interested.
“Well, they’re basically a method whereby you can pay fifty percent of any annual remuneration to staff completely tax free.”
WAG’s hives started to calm down.
“You even avoid National Insurance.”
Two hives disappeared.
“And it’s all completely legal.”
Sir Winston sat back, hiveless, and put the gun back in his drawer.
“Well Brasher, you could have told me about this at the start”, he mumbled.
Roger realised that he had regained Sir Winston’s confidence and was about to ask about his own bonus, when a frown spread across WAG’s countenance.
“If this is such a good plan”, said Sir Winston, “how come the government hasn’t cracked down on it?”
Darnit. Roger really had hoped that this question would not arise, so he now had to squirm a little.
“Well, they have sir.”
“What?” shouted WAG, as a hive sprouted out just below his chin. It amazed Roger how quickly these things could come and go.
“The Finance Bill of 2011 will make EFRBS schemes far less tax efficient, I’m afraid”, Roger effused, realising that this was causing more stress to rise in the room than a pressure cooker ever raised.
WAG’s face was now an interesting mixture of red and purple: “How can you claim to have found me a f***ing solution to this then Brasher, when you obviously haven’t you moron.”
Oh dear. It was back to the Gordon Ramsay WAG every new and loathed.
“Wait a second Sir Winston. I have a plan for when and if that happens too.”
WAG raised an eyebrow and locked in on Roger up close and personal.
With Sir Winston’s face just a few inches from his own, and smelling the faint odour of tea and cigars, WAG spat: “And what is your cunning little plan Brasher?”
Jeez, he hated this compliance job.
“We all become non-doms of Monaco”, said Roger.
And with that, he about-turned and left Sir Winston to his musings, noting as he left the vase of roses on the Chairman’s desk, right next to the guns.