Following acrimonious litigation, in which accusations of dishonesty and bad faith were levelled on each side, two former bank employees have failed to convince the High Court that they were wrongly denied more than £6 million in bonuses.
The men’s basic annual salaries following their appointment as head and deputy head of the bank’s equity derivatives department were £120,000. However, they expected to receive vastly more than that in bonuses. The contractual, rather than discretionary, nature of those bonuses was one of the main attractions of the job.
Their time with the bank was marred by discord over the size of their bonuses, which culminated in their resignation. Between them, they claimed to be due £6.3 million in bonuses in respect of the final year of their employment. However, the bank denied that they had any such entitlement, although it agreed to make discretionary payments to the pair totalling £250,000.
In dismissing the men’s claims, the Court preferred the bank’s interpretation of their employment contracts. The formula agreed in respect of bonus calculations was ‘on any view elliptical’ and left a wide margin of discretion to the bank which had been exercised rationally and in good faith. The men’s arguments that the written terms of their contracts had been supplemented by oral agreement were rejected.
The Court had no doubts as to the honesty and integrity of the two men, who were described as ‘decent and highly talented individuals’. They had a strong sense of grievance against the bank and sincerely believed that they had not been paid their due. However, the Court observed, “I doubt that there are many outside the world in which they operate who would think that they were under-rewarded.”