Investec Bank has won a £6-million bonus claim against two former employees.
The High Court rejected the claim by Andrew Brogden, former head, and Robert Reid, deputy head, of its structured equity desk.
The pair had claimed that their 2010/11 bonus had been pre-agreed in an oral contract with the organisation and was intended to operate in a manner that ignored the performance of the bank.
They claimed that, instead of reported profit and loss, their bonuses were to be based on economic accounting measures related to theoretical savings made by the organisation, calculated by reference to rates in the bond market.
Justice Leggatt, the High Court judge, said: “I regard the claim that an oral agreement was made to use the ‘institutional market rate’ in calculating their bonuses as wholly incredible.
“The second reason why I regard the claimants’ case as incredible is that throughout the period of four years during which they were employed by Investec, not once did they suggest that the agreement now alleged had been made or allude to its existence.”
David Van Der Walt, chief executive of Investec, added: “We are delighted with this result. Investec had to take a stand in this matter. We had to do the right thing by our shareholders and our dedicated employees.
“The judge has rejected the claims in their entirety and found that we operate a fair and rational bonus system, which rewards those who generate returns for our stakeholders and clients.
“It is unfortunate that these claims were ever issued, but we move on from here vindicated in our approach.”
Brogden and Reid applied for leave to appeal the judgement before Justice Leggatt but permission was denied.
The pair will now have to pay Investec’s legal costs, which are in excess of £1.5 million.