Variable pay is superior to bonuses

On the face of it, the past fortnight has not been good for fans of bonus plans. The government's ‘Project Merlin’ deal extracted a miniscule commitment to slightly enhance pay disclosure and lower bonus pools this year for the major banks, which was being driven anyway by poorer business results (fancy that, bonuses that are performance-related go down as well as up!). It still leaves the odd £6 billion to distribute among the bankers.