Bonus Question: The Inevitable Corporate Regulation
– by David Matthews 2
Is it wrong to ask for and get payment for services rendered?
Absolutely not! That is the essential nature of work.
And if you do exceptional work, shouldn’t you be rewarded for it if your employer so desires?
Of course! That sort of incentive encourages more exceptional work.
But what about when you do a mediocre job? What about when you do a job that sinks your company so badly into debt that it needs the federal government to bail them out? Do you think that deserves to be rewarded in the same way as exceptional work?
And yet corporate executives do just that.
The very concept of a bonus - to reward exceptional action in order to encourage more of it - has long been bastardized by big business. They have used it as a form of secondary income, especially so for their executives. They get a regular “base pay”, for tax purposes of course, and then they get their “bonus pay”, which they count on just as much as their regular paycheck.
And that has led to the political embarrassment we know today as AIG.
The taxpayers were forced by operatives of the Bush Imperium to take 80% ownership of AIG. We were told that this is because AIG had grown so big that we could not afford to have it collapse. Even worse, this came at a time when we were also forced to bail out a whole bunch of banks, using the same fearmongering arguments that the Imperium used to shove the PATRIOT Act and the Iraq War down our throats. (Isn’t it nice to know that we can be so easily manipulated by even the inept of morons?)
And then it all came out, didn’t it? The bonuses, the perks, the extravagant and wasteful spending on things like luxury jets and Superbowl sponsorships, and the junkets to luxury resorts and Las Vegas.
And all of that is being picked up by the American taxpayers.
Why the surprised look, o-great and powerful masters of the universe? Why are you surprised that the American people would be outraged at this sort of stuff? They’re losing their homes, they’re losing their jobs, they’re losing control over any kind of semblance of a life, they’re being screwed over by the credit card companies, and by the insurance companies, and then they’re being told that THEY have to foot the bill for the abusive practices of the very institutions responsible for screwing them over. It’s like getting gang-raped by an army, getting a sexually-transmitted disease from it, and then getting a bill from said army for expenses and “services rendered”. Which part of that kind of outrage don’t you understand?
Now we’re fixated on AIG’s excesses, because we’re hearing that these executives were getting bonuses even though they were driving that company into the ground. These bonuses were being given regardless of actual good work!
Worse yet, we’re finding out that our government, the very entity that FORCED us to bail these bad companies out and FORCED us to take 80% ownership of AIG, not only KNEW about these bonuses, but sabotaged any effort to BLOCK the bonuses.
Unfortunately there’s nothing that we can really do about the AIG bonuses. The die was cast on that sin a long time ago. These bonuses were part of a contractual agreement signed long before the bailouts were needed, and breaking that contract would actually cost the taxpayers DOUBLE. The only way that the contracts could have been broken and the bonuses stopped would be if the company filed for bankruptcy liquidation, which, thanks to the Bush Imperium and members of Congress, never happened because they were bailed out.
It is not good to be an executive in AIG right about now. There are actual TOURS of the homes of AIG executives being held by protesters. AIG employees claim that they’re now getting death threats because of where they work. The tours are amusing, but the death threats are not. And all of that is coming out of the anger and frustration of people when being told that there are those that are prospering off the misery of others.
So now the worst fears of conservatives and neo-conservatives are coming true. Not only is the government moving to tax 100% of those bonuses (or as close to it as they can), they’re talking about regulating ALL bonuses, not just for the banks and other institutions getting bailout money, but ALL financial institutions.
And the cons and neo-cons, much to their dishonor and embarrassment, can only recite their pathetically empty mantras about how businesses should be able to use bonuses to “retain top talent” and that regulating how private entities do business can only spell doom for capitalism. They sit there in their lofty studios and foundation offices, churning out the same Ayn Rand-style screeds of blasphemy from the cult of capitalism.
And in doing so, they forget some key points:
First, the system is already broken. Atlas has already shrugged. The American people are being forced to pony up to support institutions that should have DIED in a normal capitalist setting. You can thank both Democrats and Republicans for that.
Second, the mantra that failing companies should use bonuses to “retain top talent” defies the utter reality that if your executives are the ones behind the failure of those companies, then maybe THEY’RE NOT TOP TALENT! I know that little nugget of reality hurts the ego, but it is the truth.
Third, the very idea that bonuses should be awarded regardless of actual good work defies the purpose of giving that bonus. If you’re not giving it as a reward, but merely as a matter of contractual agreement regardless of performance, then it’s not a bonus. It’s just another form of regular pay.
And fourth, as much as the cons and neo-cons refuse to understand this, the groundwork for this kind of regulation, as well as even more restrictive measures, was set down seven years ago.
Remember the “War on Corporate Fraud”? Remember Enron? Remember WorldCom? Remember Arthur Andersen? Remember all of the big corporate failures? Remember Ken Lay and Martha Stewart?
How did the government respond? They responded with regulations. They responded with an intrusive and annoying law called the Sarbanes-Oxley Act. And who imposed those things in the business world? Who forced corporations to succumb to regulatory oversight? President George W. Bush and the Republican-controlled Congress did!
How much of a stretch would it be, then, to have liberal Democrats follow through with the pattern set forth by their political counterparts? Not much indeed.
Let’s get brutally honest here… once again corporate executives have nobody to blame but THEMSELVES for the actions and reactions from the masses. They were the ones that pushed the system beyond the breaking point as they sat there and sipped champagne with their con and neo-con friends in complete oblivion to the consequences of their actions. They were the ones that gamed the system, and they continue to game the system and spit in the face of the great unwashed, and for that the masses are getting angrier and angrier by the day.
They are essentially INVITING the government to come in and regulate the crap out of them. They’re acting like drunken Spring Break partiers picking fights with the police, DARING them to either be arrested or shot.
The problem is that for the longest time banks and corporate executives have pretty much used business as their own personal piggy banks. They didn’t care about PRODUCT, they just cared about PROFIT, and how much they could get out of the deal. The rules that normally apply to most hard-working people didn’t apply to them, because they were the ones that pretty much wrote the rules and thus enforced them. So a CEO who stays at a company for two years, no matter how well off the company really does, gets a reward just for being there. And if anyone asks? Well, it’s in the contract! Granted, it’s a contract that they wrote, but that shouldn’t matter.
Yes, in the great scheme of things, the question of bonuses seems trite, but it goes to expose the overall corruption that exists today with big corporations and the influence they wield in government. They suck, they know they suck, and we know they suck, and the only way that any of this will change is when those in the financial world and corporate world wake up from the drunken party stupors and get their act together.