Oh this is nothing mate... bonuses have become a real buzz word, but unfortunately most people (the media especially) don't dig deeper. Over the past decade there have been 2 philosophies:

• true bonuses
• wage equalisation with the market in the guise of a bonus

In addition there are 3 levels of how bonuses are applied:

• Executive
• Middle management favourites
• Coal faced workers

And finally 2 types of bonuses:

• Monetary bonus
• Shares and other 'hidden' bonuses (rarely reported)

The crime is not that bonuses are paid. Let’s think for a moment about most of those I know in my industry... they fall into the worst part of each of these categories. Either victims of political wrangling or simply low level workers, they are often paid 35-40% less than the market average and at least 15-20% less than they would receive with their level of education in other industries. What makes the difference... bonuses. Quite often this is taxed differently and limits the pension plans, therefore it allows the employer to hire workers at lower than market value with the dangling carrot of a good bonus down the road.

Now the next level... the favoured middle management. Middle management may be favoured because their good... or because they know which wine goes with which fish. I find that most fit in the second category, but there are definitely those in the first category. These guys are getting lower wages as well (probably rose through the ranks) but are well compensated with multiples of their wages through excellent bonuses... the lions share of the plebes money.

Finally the grim guys who get the headlines. Executives. Again there are definitely Executive guys who earn every penny (I personally know of... one) and multiples who have either leveraged their lack of morals or have located the exact path to tread through strategic arse licking. These guys compete on base wages first- so those are rarely under the wire of the market, but the big guy is the bonus. Now the money bonus is good... multiples of an already generous wage... but check out the share options and deferred options... preferential loans... children’s school payments, rented homes, corporate credit card etc. etc. And will these guys give them up in a crisis... no way dude, we're the 'talent'! Now this isn't jealousy speaking, this is experience. In my company, the top 10 guys could say hey "no bonuses for us this year guys" and all those who rely on their bonuses to just hit an equal pay for the market would be OK. But would they... nah... the billions you see going out, those huge averages you hear about (1 million an employee) are totally skewed by those executives. In fact... again from experience... they will completely screw the future of the company, kill the coal faced workers pay, strip important IT infrastructure products and dupe the shareholders to keep those ridiculous bonuses. Our ire is well placed with these guys... in fact how have we let it get to this? Averaging 100-250 times the pay of the regular workers? Really? Their effort is worth all that? No it isn't. In fact by the time they hit that level, the skill comes in looking necessary while consistently ignoring the facts on the ground. Hierarchies this teetering with heavy "top weight" are bad companies to invest in, unless they have a product which sells itself.

So when you hear about gross bonuses... remember that some people actually rely on them. Some companies exploit the lower pension and tax costs to place the emphasis on bonus instead of wage. But do shout out about that executive pay... not just now, but always... not just in bad times, but good. The problem is we get paid yearly... and due to that we are never responsible for what is the result of what we decided last year. Why do almost all projects go live just prior to review periods? Why are they often riddled with problems that appear months later, providing an opportunity to be fixed by the same unscrupulous political schemers? Bonus periods...

When it comes to the average worker, blame the legislation that makes bonuses attractive for the companies to pay in lieu of standard wages, not the pay recipients themselves