What's a Bonus?
For any subject, broad brush analysis doesn’t let you see all there is to see.
Back when I was a baby associate with a law firm, the associates and staff got year-end bonuses. By the time I became a partner, associates were getting $1,000.00, staff something less each year.
As a partner, my ownership of the firm was renegotiated every year based on my relative contribution to profit. We also "awarded" “bonuses” to partners who had had a stellar year and would have been greatly under-compensated had they only been paid based on their share of ownership. (No one gave money back after a poor year, that was reflected in re-allocation of ownership.)
So that brings us to Wall Street and President Obama’s and our outrage at $18 billion in bonuses. Most of the companies involved had really, really bad years. But within those overall terrible results, there were people that had performed really well, made money for the company. Given the bad year, they lessened the loss.
I suppose we could say screw them, no overall profit, no extra money for doing their best and succeeding. But if that approach is to be taken, it needs to be going forward, not after the fact.
Part of the problem is the word bonus. The bonus I got as an associate was a gift. No one begrudges a salesperson getting a commission for making a sale. Is the extra compensation paid to a partner or an executive who made money for the company any different?
7 comments:
Oh thank you for saying this so succinctly.
BTW, have you seen the tax shortfall numbers in NY state and NYC due to the huge reductions in bonuses over last year?
I think it's the CEOs that are fouling the water for everyone.
When I hear "Wall Street" I don't think of the guy who's putting in sixteen-hour days and producing good results for his clients. I think of the CEO that spent $1.2 million redecorating his office.
Thanks Dale, and I read a couple of things at NYTimes.com about it.
Thomas, one thing I didn't write, though I thought about, was the difference between the workers and the top people. And, were I to have added that, it might have made my point a bit better. Often the person at the top of the chain is the beneficiary of the people that work for him or her. Then you have to ask, did the executive earn the "bonus" for being smart enough to hire the people that did well? There's no end to this is there?
ThomasLB - that is what most people think, which is exactly what Obama and the wealth envy types want becasue it helps them pass their laws. Same thing happened with FDR.
Dale, I don't think Obama is really into wealth envy, I think over time he won't really be a left type. He will be a smoother Clinton if I were going to make a bet.
I do not have a problem with people being rewarded for hard work. It is the, sometimes, obscene amount of money they are getting that bothers me.
When I worked for the law firm and title company, I was working for two companies at the seme time. I had more to do than anyone else in the building except one paralegal who was always really busy too. At the end of the year I received the same $100 dollar bill that every one else got including the part time "runner" that spent most of his time sleeping.
So when the little guy hears about big bonuses I can understand the resentment.
I agree that Obama is not envious of wealth, because he and Michelle seem to have acquired a good bit. I think he is using it as a tool to advance his agenda.
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