That must be what it stands for.
As usual, this morning my inbox held “Today’s Papers” from Slate Magazine and my driveway the New York Times, both leading with the story about AIG bonuses being paid out to the very executives responsible for trashing the economy.
I know this is going to sound terribly naïve, but shouldn’t bonuses be tied to performance?
It seems AIG is “contractually obligated” to pay out $165 million in bonuses to 400 employees in its Financial Products division although AIG’s government-appointed chairman, Edward M. Liddy, expressed his disgust: “I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them.”
No word from the previous chairman, who put the compensation program in place.
Ironically, there are AIG employees suffering, but they are those not working for Financial Products. AIG is slashing bonuses -- but for people in other parts of the company who had no direct involvement with the derivatives.
A commenter on the NYT's website sums it up well: "This is so outrageous it is almost humorous."
Yeah, that’s one way to put it.
On the “bright” side, the top 25 executives at the Financial Products division have agreed to work for $1 for the rest of 2009. Big of them. If you gave me $165 million I would work for free for the rest of the year too!
I want either a true government takeover of AIG, or force them into bankruptcy proceedings. That way they can get out of their "contractual obligations" and we'll know where our money goes. Problem solved.
Historically a “bonus” was defined as:
- An additional payment (or other remuneration) to employees as a means of increasing output.
- A payment in addition to normal pay. Often related to performance and typically paid as a one-off lump sum.
New words enter the dictionary each year as they become commonly used. I propose a new definition for the word bonus:
“A reward in direct proportion to the amount of damage, financial and otherwise, an employee inflicts both on his or her own employer as well as the world at large.”
Resources:
Gretchen Morgenson, who is one of my heroes, has written a great piece in the Times on this, entitled “At AIG, Good Luck Following the Money.” One concern she highlights is the fact that there has been a lot of secrecy around the $50 billion funneled to AIG’s counterparties so far. The government has resisted revealing these companies’ identities even though they are getting our money. This is so Orwellian I don’t even know what to say. Click here to read her article.
Sign a petition demanding transparency in the government bailout here.
I agree wholeheartedly with your new definition for the word "bonus." Nicely done.
Posted by: Steve Beland | July 09, 2009 at 12:16 PM
Good post.
Posted by: Charisse | April 27, 2009 at 04:55 AM