Bonuses - Again?
(3/10) Tere has been lhot written and discussed about the bonuses that the financial institutions are giving out, and rightfully so. In a previous paper entitled "I would take twice the betting for half of the money," I explained why bonuses should not exist. Apparently congress and Wall Street failed to read the article. I believe it would be
proper for me to re-state at least part of my case as to why bonuses should not be given out.
Bonuses are for good work it is a reward for doing good work. If you spend all of the money and then someone has to bail you out -you have not been doing good work. When you are entrusted with very large sums of money (not your money, but money from other people) then you have a responsibility to be reasonable and prudent with the money - period. Of
course this could also mean we need to fire congress.
Like many of you when you hear a news report about new bonuses being given out - your heart rate goes up, you grit your teeth and you think, "they really don't get it" The company they work for pays them a salary so they can feed and shelter their family - and the company went broke because of mismanagement, the very same management that's receiving
bonuses. Maybe I am being too hard on this, maybe my perception is incorrect, and then again, maybe not, maybe I do get it! If the congress had not bailed them out, the companies would have failed, the management would not be employed and they would not be receiving a pay check, must less a bonus.
"They really don't get it"
To correct this problem I would suggest that we create a new law directly related to compensation and we would call it "Bonus in Reverse." If you are a large company and are suppose to be responsible for money that is not yours, like pension funds, etc., and you lose the money - then you don't receive a bonus, you owe a bonus. I know this is a crazy
idea, that of tying compensation to performance. I think that if we did this we could solve many problems. I wonder why nobody has thought of this before.
While I do think this is an outstanding idea, I do believe it would be difficult to pass it in Congress. After all (and this may surprise some of you), Congress is not that responsible in handling our money. They are very good at giving it to their friends and they don't know what a "Balanced Budget" means. They consistently overspend, go into dept and
then need to borrow more money. I wonder if the big banks on Wall Street are using congress as a management model! This would explain a lot.
If you are a large company and are suppose to be responsible for money that is not yours, like pension funds, etc., and you lose the money - then you don't receive a bonus, you owe a bonus.
We should all remember and it's not as if you need a reminder, that it was congress that gave billions to the Wall Street banks - with no strings. Which is why we are so annoyed with the bonus issue and I would predict not for the last time. Of course Congress also bailed out the auto industry but when they did that they insisted on concessions from
the unions. Let me go over that to make sure I have that right, the banks; the billionaires get billions with no strings and the people that do physical labor and actually built something are suppose to give up something to keep their jobs.
I think Congress must have been confused and reversed who was to give up something. Would it not have been better if the bankers who when broke - gave up bonuses? Would it also not be better if the auto executives who went broke gave up something? Seems to me the only people doing a day's work, the auto workers, are the only ones that were suppose to
give up something.
Let's revisit my idea of the bonus in reverse law, or tying compensation to work completed. I do believe this could solve a lot of problems. We could even expand it to schools. The students that study hard and do well on test should receive the highest grades. The teacher's that teach the best and have the best results from their students could receive
the highest salary. Fairness and equity what a novel idea. Of course we all know that the students who study the most usually receive the best grades, but in general the majority of teachers receive a salary. Apparently the bonus in reverse rule works well for children, but not for adults….
I think Congress must have been confused and reversed who was to give up something.
Of course this takes me back to my first article on the financial mess which included my recommendation that we should put high school seniors in charge, since they know everything. I am sure that many of you laughed at that idea, but I bet you're not laughing now. However when you think about it, in a strange sort of way adults that act like children
are already in charge. I am not talking about the bankers, but the congress. As strange as it may sound, adults that act like children are not that responsibly.
When someone says that bonuses are required to keep the best and brightest, they should preference their words with "Once upon a time." That's how a fairy tale begins. If they were speaking the truth, they would preference their words with "This is no bovine fecal material" Bonuses for failed management of companies that went broke, is not only absurd
it rewards individuals for poor behavior. It has been over a year since the financial meltdown on Wall Street and not one law relating to financial responsibility has been enacted. I guess the 400 million that the financial industry spent last year on lobbying congress - is just a coincidence. Hum, "Once upon a time."
"The significant problems we face cannot be solved at the same level of thinking we were at when we created them." - Albert Einstein
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