Well, the pundits have been at it again, squealing in outrage all weekend, on Fox News and elsewhere. This time they’re in good company. We’re all mad about the audacity of the multimillion-dollar bonuses being paid to AIG executives.
Call me naïve, but I thought a “bonus” was a reward for good work paid out of the profits of a company. I thought that if the company lost money, there would be no bonuses. And that executives were responsible for the well-being of the companies they manage—in other words, for making them profitable.
But unless you call begging for bailouts on capital hill “making a profit,” these people were abject failures. But it turns out that they were locked onto contracts to get millions in “bonus” money regardless of whether their bets paid off or whether their companies gained or lost. And these are the very people the CEO says had to be bought off so the company could “attract top talent.” If that’s top talent, let me have a go at one of their jobs. I betcha I could do better.
As for the bonuses that they are apparently entitled to by contract, I say give them the money but call it something else: severance pay.
Back in the day, when I worked at Boeing, everyone got bonuses at the end of the year. If the company sold a lot of planes during the year, the bonuses were bigger; if the company sold fewer planes, the bonuses were smaller. It was in everyone’s best interest to produce superior products while finding ways to cut costs. And to one degree or another, everyone reaped the benefits of success.
Of course, a few other things were different back then, too. Companies had to bid for government contracts—which was another big incentive for keeping an eye on costs. And there was also plenty of government oversight to be considered: enough safety inspectors, auditors, and federal design specialists to ensure that every job got done right. Government oversight was considered a benefit—added incentive to meet the highest of standards. As I recall, companies and the government worked hand-in-hand and did not consider one another the enemy.
But clearly oversight is inconvenient for those who have billion-dollar secrets to keep or who want to get rich by doing nothing—or worse than nothing. Banks and businesses sailed along for quite a few years with no one to answer to but themselves. So much for the theory that businesses will do the “right” thing because, ultimately, the right thing is also the most profitable. Hogwash.
Opportunity begets greed, and greed has no moral philosophy; it’s simply the impulse to grab as much as possible for as long as possible and damn the consequences.
Now the whole world is suffering the consequences of the kind of greed evident in these AIG executives (not to mention Bernie Madoff)—who, if they don’t fall on their swords, should be ashamed not to at least make some token gesture of giving back a little of the money they so patently didn’t earn.
Let’s hope they invest their ill-gotten gains more wisely than the rest of us did when we entrusted people like them with our money.