I read a New York Times piece this morning detailing how President Obama (gosh, I love writing that! Sorry, former McCain supporters) hit the roof when presented with the news that Wall Street bankers gave themselves nearly $20 billion in bonuses in 2008.
According to the story, Obama called the bonus tally “shameful” in light of the economic crisis — and the fact that these same bankers were the recipients of $700 billion in bailout money. His full quote:
“That is the height of irresponsibility. It is shameful. And part of what we’re going to need is for the folks on Wall Street who are asking for help to show some restraint and show some discipline and show some sense of responsibility.”
However, countered a banker friend of mine, there are two sides to this coin. The flip side has two arguments. The first is that executive compensation is often offered in terms of a relatively low salary plus a bonus — in fact, for many in the finance world, it’s the bonus that comprises the lion’s share of compensation.
The second is that bonuses are generally awarded for meeting certain goals or requirements, or to acknowledge outstanding work. Setting aside for the moment the fact that it seems a bit disingenuous to reward financial execs for great work when Wall Street is in a shambles right now, the core idea seems to be that bonuses are good motivators as well as a reward for a job well done.
I can see both sides of the argument. But it seems to me that it’s awfully two-faced for an industry to beg $700 billion in “help me!” money, and then turn around and pay a big chunk of it out in back-slapping bonuses to the very same industry execs who got them into the pickle in the first place.
It’s especially galling to hear this after I’ve been writing about layoffs, how people are willingly sacrificing to keep others from being laid off, and strategies for boosting morale after downsizing.
Am I being too harsh? Am I overlooking some crucial facts or insights here? I’d love to hear what you have to think.
