Wall Street Bonuses, AIG under fire

Posted by abyjain on March 18, 2009

So apparently all of America and it’s “Tax-paying Citizens” are hopping mad about top performers (and others, who were given retention plans etc.) being given bonuses with their pay. Isn’t it being blown a wee bit out of proportion though? For the below reasons possibly:

a) The bailout need would not change whether they got the bonuses or not. I understand the morality and the issues involved, but then, when the plans/contracts were signed, this was not the environment. Moreover, if you want to come out of a bad position, you need the best people working for you and making money for you. If you’re not planning to reward people who do well in their parts of the business, then how will AIG ever start making money. Last I checked, motivation was needed, wasn’t it?

b) One of these senators on bloomberg was questioning why some of the thousands of people laid off by citibank cannot be hired by AIG. Well, because a) There are contracts and contractual issues, b) You would be filling a seat with a fired lower preference guy from citibank by firing one of your top performers cause you had to pay them a bonus!

c) It’s really simple. I, as an employee, have the ability to make some money (or do anything else positive) for the firm that I work for. I want to be compensated for it. Especially in such a bad environment, if you do not hold on to the good people in your organisation who are actually making some money for you, then my guess is that the company (say AIG) would be in a worse off position and the losses would only be wider and the tax-payer would only be madder. Let them do their jobs now. Yes, most of them screwed up, but we all know that and they know that. Now let them work and let them be compensated if they can work well. The time to stop the flow of money was probably “then” and not “now”

d) It’s really EVERYONE who screwed up. Stop beating the banks up about it. Every person invested wrongly. Oh, and because they are poor citizens and dumb cows, its not their fault but because the bankers BANK, and they make a lot of money, they were supposed to be magicians or know-it-alls!!

Seriously, now these executives might be working for the tax-payer by proxy, as the government owns most of these firms, but that is not going to change that these are high stakes games and the best people in the business need to be paid the best amount of money. Stop being government-al in your thinking, or what you will get will be services and businesses that are as efficient as the government.

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