Thu 22 Oct 2009
Pay for Performance and Bailouts
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One of the most interesting statements I’ve heard today was from Bank of America to the effect that Wall Street businesses aren’t allowed to pay people based on performance then those businesses will lose the best people to turn the company around.
Two things immediately come to mind. First, if they were paid for performance they would be unemployed because these same executives ran their companies into bankruptcy. They have jobs today only because of government intervention. That intervention came in the form of tax dollars. Tax dollars that came from the same people that they are now screwing over daily with outrageous interest rate hikes, imposing a wide range of fees, and thumbing their noses at with outrageous pay packages while so many are out of work (many because of the irresponsible management of these companies.)
The other thought that came to mind was in response to the argument that the top people would leave. What these folks are really saying is that this “top talent” has no allegiance to the company, but operate solely for their own benefit (which is, again, how we got into this mess.) They are saying that these people have no integrity (a fact that most us suspected.) People of integrity, already having large incomes and investments that exceed what the majority of Americans will make during their working lives, recognizing their contribution to the failure of their businesses would take it as a personal challenge to turn it around, regardless of remuneration.
But, alas, they have no integrity. They have no sense of responsibility for their actions. They have no comprehension of what their selfish and irresponsible actions have done to others. They are only concerned with themselves. Clearly they’ve learned nothing.



