flynn23 wrote:
You want the best and brightest to be compensated, with really, no limit.
In this case I think what is frustrating is that we're not talking about "best" or "brightest" but "closest to the money." We have examples of performance bonuses being paid out by companies that are, for all intents and purposes, bankrupt. I'm all for profit sharing by successful companies, but paying it out when your company is bankrupt and being propped up by the federal government is nonsensical. There are no profits to share, so what, exactly, are you sharing? The argument that "we have to do this or we'll loose talented guys" is a non-starter in this environment. No one in the banking industry is on a hiring binge right now. The last thing anyone in any industry wants at this moment is to be on the street looking for work. Those words are a code for something else - something which becomes clear when you look at how AIG's bonuses are structured. In the case of AIG we're not talking about profit sharing. These are retention bonuses that were negotiated last January when it ought to have been clear to those close to this disaster what was about to go down. These people demanded more money or they would simply walk away from the mess they had created. They've squirreled away enough money at this point that they don't have to work again for the rest of their lives. They clearly threatened, when the going got sour and it was clear that there weren't going to be profits for performance bonuses, that they were unwilling to work at their salary level, and a substitute bonus must be created - or they'd leave. AIG was not afraid of loosing talent. They were afraid of loosing money. They had billions wrapped up in this stuff. It was about to explode. Their traders were the only people who understand all of it. If those traders left, it will be more difficult to unravel, and more money would be lost. Imagine if you had a software developer working a piece of code that was extremely complicated, required daily maintenance, and cost billions every day if it broke. And the guy wanted to quit. The million you'd pay him not to quit would cost you less than what you'd loose while the next guy came up to speed on how to maintain the thing. Basically, these people have gotten themselves into a position where they are responsible for billions of dollars, and they are blackmailing the management of AIG and the United States Government. We have to pay them millions or they will walk away, and we know that will cost us even more. Thats why the Treasury hems and haws about clawing back the bonuses but doesn't do anything effective. They know they're fucked. The banksters have a gun to their heads. This isn't a case of rewarding talent. This is blackmail. And I don't think its illegal - I don't think prosecutions are coming unless evidence of book cooking comes to light. In this case these bonuses are intentionally disconnected from profits so there is no benefit to cooking the books. It speaks to a more fundamental disconnect between our idealistic notions of talent and merit and the actual economy that we have, in that its not really about talent - its about what you control. Account executives are typically far better compensated than engineers, for example, not because what they are doing is objectively more important, but because they directly control access to revenue... RE: Looting AIG | 
