The bank risks angering staff if it abandons cash incentives entirely, said Alan Johnson, founder of New York-based compensation consultancy Johnson Associates Inc. If the board proceeds, it should at least pay cash bonuses to junior staff and structure something creatively for senior bankers that could dramatically increase in value if the bank recovers.
Here we have a situation where their employees expect cash bonuses, and it is argued that they could abandon ship without them; however to give the bonuses jeopardizes the sustainability of the bank. Yet, if the bank gives the bonuses, the losses could eventually be socialized in a bailout, which looks like the socialization of bonuses.
Not a good situation at all.
Should have paid bonuses out in co-co bonds. That would have been fitting