Friday, November 14, 2008

Bonuses Out of Bail Out Money? How Bad Is It?

Why are we painting whole companies with the same brush? I am just as mad as the next if the top people in a company that asked for bail out money get huge bonuses. Mr. Cafferty was the end of my rope with this. He isn't the only one doing this. He is a good example.

(I can never get video from CNN to work. I would if I could.)

We a need to take a breath and think two steps down the road. You have to ask two questions when looking at the bonus amounts. Who is getting the bonus? The head people? That is wrong. What about the people in middle management? What about those executing the trades?
From WSJ on cutting Wall Street bonuses:
"Still, even if banks wanted to, they would be hard-pressed to eliminate bonuses and survive. Bonuses aren’t really “bonuses” in the “something extra than what is due” meaning of the term. It is actual compensation. People who work on Wall Street wait all year to get the bulk of their annual pay. Sure, they get a base salary, but it is standardized, relatively small and not reflective of individual performance. And, as firms conserve cash, a larger part of bonuses come in the form of stock, which the markets are hammering."
The more outrages part of this whole bail out versus bonuses, some companies Did Not want the money and are being forcing to any way.

'“They’ve been calling us; they want us to participate. They’ve been asking banks to participate,” said Dan Rollins, president of Houston-based Prosperity Bank.'
They are however still under the same rules. The public just lumped them in with the rest. We should be out there cheering those who didn't need the money because they where smart and amazingly didn't want the money they where forced to take.

Not all business is bad. Think. stop painting them all with the same brush. Focus you anger on those who dissever it. The CEO types in this case. Just don't forget about Congress and the rest of the bureaucracy.

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