This blog is about the Law of Unintended Consequences.
It will report on occurrences of the Law of Unintended Consequence and also of Murphy's Law and other inconsequential matters.
I hope that my readers will add their stories that illustrate these, and similar, laws.
One of the most clear examples of this law in operation is "How the war in Iraq strengthened America's enemies" - Peter W Galbraith.
STUART GULLIVER, chief executive of HSBC, is to be offered a huge salary increase to get round new European rules that curb bankers’ bonuses.
The 54-year-old former trader is believed to have been paid about £7.5m for last year after being handed bonuses and benefits worth five times his basic salary.
New rules imposed by Brussels block bankers from being paid bonuses worth more than two times salary — a restriction that has prompted banks to develop new pay schemes.
The rules came into effect in January, meaning that 2013 was the last year in which such big bonuses could be paid.
It is understood that HSBC’s annual report, to be published this week, will indicate that the bank is considering raising Gulliver’s basic pay this year to compensate for the restrictions.
Analysts believe his salary could be doubled. He is also likely to be offered an “allowance” of shares — a new top-up payment devised by consultants as a way to get round the rules.
The sum would be fixed for a period of years and would not be tied directly to performance, meaning that it should not count as a bonus under the rules.
Gulliver’s payday comes as analysts expect the bank to report profits of about $24bn (£14bn), up 20% on last year. A strategic overhaul launched by Gulliver when he took over three years ago has seen the bank sell dozens of businesses and build up capital. Its share price has fallen almost 10% over the past 12 months, however, closing on Friday at 654.2p.
HSBC’s investment bankers, meanwhile, are expected to share in a £2bn bonus pot.
HSBC is the first big bank in Europe to reveal concrete details of how it plans to deal with the bonus cap. Every bank is expected to both raise salaries and devise new bonus schemes that disguise payments for performance as benefits.