In the current downward economy, do you think it is right for companies to offer bonuses to their bosses and executive staff while the average worker scrapes away at overtime hours to earn a little extra cash to support the family and ward off rising inflation?
The question is inspired by the outrage of AIG (which the Govt. helped bail out very recently) which is/was all set to offer bonuses totalling a whopping $165 million dollars in your tax money.
Any company that has recently been pulled out of the drowning swirl of bankruptcy by the Govt. should not be giving out bonuses, let alone $165M at that.
The greed has become a jewel of our society, where the big fish want to get bigger, and the little fish huddle together to formulate strategies to avoid being gulped up. How do you think this trend affects you, your family, your job/business?
Will you accept a bonus knowing that your company has just been saved from brink of failure or will you be a whistleblower and do in the vast interest of others? What level of greed is acceptable, if any?
There have been several stories here in the UK, as of late, of bosses in big banks getting hefty pensions/bonuses. These run into several million pounds. While a worker is entitled to a pension scheme, I don’t understand why the RBS chief was designated so much, when employees and the country is in recession. Surely the pension scheme should have been challenged and if not challenged, it should have been in line with the current economic climate.
Furthermore, I am glad that the RBS chiefs are being held accountable and questioned by the Government. Likewise, President Obama should also question the bonuses which are to be awarded to the AIG workers.
There are talks of increasing the taxes here in order to try and get through the recession. However, with so many people being made redundant on a daily basis, how can this vicious cycle stop? If people are made redundant and can’t find a job, they will go into the benefit system, which will again put pressure on the country’s finances.
In relation to the earlier question you posed with regards to fairness Teggy, it is wholly not fair. However, this is not a new practice. The 'top dogs' have always had the such 'priviledges' but now because of the current financial climate, the media is playing on this to evoke emotions. That is not to say the bonuses are legitimate but surely when the banks were 'stable' no one made a who ha about what bankers got in bonuses. It was never challenged then. Makes one wonder why we are in this place in the first place.
quite frankly I think this whole thing has blown out of proportion. Bankers deserve bonuses. Yes the average toilet cleaner at a bank must work hard to earn more money but guess what the average banker has atleast a bachelors degree usually from a good university, have Been working hard at their job for a long time. Have much more responsibility, their job carries more risk, they are the ones earning the actual money for their bank, and hence get rewarded. Furthermore, only $165mm out of the $173bn AIG has received as bailout is going towards the bonuses.
Every firm on wall street has decreased it's bonus pool this yr, including AIG (except Goldman sachs). And if AIG was allowed to go under, Goldman sachs would have also gone bankrupt. There's a good reason why these people get paid more and most of it has to do with the characteristics of their job.
close the exchange market and forbid interest, all problems will be solved!
it's filled with bunch of hypocrites who speculate, speculate, speculate. As if they have no life.
This capital system needs to be pulled down! Your activity/hard work should be paid not your position!
Where I work they have two components of bonus.
How well you did on achieving your targets and goals set up at the beginning of company's fiscal year. The rate of bonus for for this part is from 10 percent to 25 percent of your base pay.
How well the company did . This component is somewhere from 5 percent to 20 percent of your base pay.
So if you did good on achieving your personal goals but the company did not still you get a bonus . You might not get as hefty a bonus as when the company did good. If the company did not earn any profit at all you do not get a penny for that part of your bonus but you still get that part of the bonus which is tied to your personal performance.
It is done as many are saying to keep the talent with the company. Trust me even in this economy there is demand for talent , well qualified and well experienced people. People who are experts at what they do.
Now in case of AIG , if the money came from the bailout plan or from the budget the company had reserved at the beginning of fiscal year for such bonuses, is debatable. Companies reserve funds for such kind of bonuses in their annual budgets.
Oh yes and if these guys at AIG are the ones who were responsible for the demise of the company then they deserve a boot. All they are experts at is how to kill a company.
Honestly I don't know how much AIG has reduced their bonuses by. But Merrill lynch and citigroup decreased it by nearly 80%. so maybe AIG can reduce it more but I think it would be wrong to give absolutely no bonus as well. Let's not forget that not all these people were involved in the decision making process that led to this crises. So for them I feel specially bad. Because they don't deserve this.
Of course anyone who pours their lifeblood into their work wants to accept any bonus offered. Yes there has been too much greed in this area but for the most part, people who get bonuses earn them. The toilet cleaner guy? He gets paid overtime if his services are required beyond the required working hours set forth. Middle to upper management people? They broke their butts in college then broke their butts some more to get ahead in their careers. They get paid a flat salary, no overtime for them no matter how many hours they work. For a bonus of what? 10 thousand? That hardly makes up for working late nights, weekends and holidays does it? For knowing that, even while on vacation, they want to know where you are and how can they reach you...
When I was living in the city and working, I slept with my pager by my bedside. If a truck backed up, it sounded like my pager so I'd bound out of bed to grab the phone. And thats when I was home...there were many nights that I was working all night long and grabbing an hour or two of sleep in an office chair.
Bonuses are supposed to somewhat make up for these extra long hours (because of course, there are some who rise to that certain level but rebel at the prospect of so much dedication)...so its to reward those who work above and beyond.
The ones who use it in an abusive fashion...well they're reaping what they've sown now.
So im just curious--someone who works at AIG (and no not as a toilet cleaner), are their resumes still going to be attractive to other companies?
That is a very good question! :(
I would hope so, as long as they can prove their skills and are well qualified/educated with great experience they should have a fighting chance just like non-AIG employees.
AIG is the name of the parent holding company, which has hundreds of companies under it, with all sorts of business. For the most part, the core insurance businesses are stable entities in and of themselves.
Of course anyone who pours their lifeblood into their work wants to accept any bonus offered. Yes there has been too much greed in this area but for the most part, people who get bonuses earn them. The toilet cleaner guy? He gets paid overtime if his services are required beyond the required working hours set forth. Middle to upper management people? They broke their butts in college then broke their butts some more to get ahead in their careers. They get paid a flat salary, no overtime for them no matter how many hours they work. For a bonus of what? 10 thousand? That hardly makes up for working late nights, weekends and holidays does it? For knowing that, even while on vacation, they want to know where you are and how can they reach you...
When I was living in the city and working, I slept with my pager by my bedside. If a truck backed up, it sounded like my pager so I'd bound out of bed to grab the phone. And thats when I was home...there were many nights that I was working all night long and grabbing an hour or two of sleep in an office chair.
Bonuses are supposed to somewhat make up for these extra long hours (because of course, there are some who rise to that certain level but rebel at the prospect of so much dedication)...so its to reward those who work above and beyond.
The ones who use it in an abusive fashion...well they're reaping what they've sown now.
And then there people on the lower level of corporate america, not managers but very qualified professionals who work their butt off, similarly working late nights, expected to work weekends, be on call late nights with company phone...etc....that go above & beyond & are promised a certain percent bonus for their hard work.....and then poof the co. is in shambles and suddenly your told "no bonuses this year, holiday party is cancelled, picnics are cancelled, and possible job cuts. Totallllly sucks!!!!
*yes I agree afro-sheen! But the thing is...at least from my experience in the big banks in USA is that the lower you are on the totem pole, sure the lower your salary is but then again...you earn an "hourly wage" rather than a "salary". That means if you are an hourly wager, you earn overtime and double-time (double the hourly wage) on weekends and holidays. The people who put in this kind of dedication are faster tracked to "salaried" positions - lol - yeah thanks for the promotion!!! cause this means that you get a yearly salary and no overtime but are expected to work even longer hours. In the hope that the company does great and you get a big bonus.
Sad but thats really what it boils down to and how things work here.
a bonus is a pat on the back for a job well done, do these bankers deserve a pat right now? for what? do they really deserve a big chunk of the taxpayers hard-earned money? the same taxpayers who are now suffering at the hands of this meltdown. lets give out bonuses to the ones who really need a hand
With that argument you can always say someone else will be in more need of the money instead of a bank executive. At this time bankers still deserve a bonus, but should not expect a high bonus as they have received previously. Not all bankers and executives were involved with the decision making that led to this crisis. However there were many taxpayers that were purchasing houses with mortgages they couldn't afford which also was a factor leading to this recession. There also credit rating agencies and govt agencies that provided minimal or no oversight. So to put the blame on and punish just the execs and bankers is ridiculous.
^ thats the question, how exactly do they 'deserve a bonus' at this time when their banks are surviving on hand-me-downs from the government?? this is not an argument about pay cuts, where you bring in personal performance.
a bonus generally results from an institution's overall financial success, if it has a particularly good fiscal yr, employees receive a bonus as a reward for their hard work so basically its often connected directly to an institutions performance. we all know what kind of performance they have had recently so based on that, why the reward? this bonus is not coming out of the companys profits, but from someone else's pocket.
This so called bail out money is loan to the banks they will have to return it with interest. Some of them have already started repaying it.
So why the media and the goofs in Washington call it bail out money and are giving this impression to public like this is free money for the banks and banks are not using it efficiently ? So the banks are using it to their advantage as there were no strings attached to this loan money. In their enthusiasm to save their skins bureaucrats and politicians in Washington were so eager to dole that money out that they did not implement any safe guards to make sure that this money is used in efficient manner.
^ true, safeguards should’ve been implemented but one would think that professional accountability and integrity would counter in somewhere, after all this is the company at the heart of the financial collapse that sent the economy into a tailspin. this is the explanation offered by A.I.G, its all based on a legal glitch apparently, very convenient.**
“A.I.G., nearly 80 percent of which is now owned by the government, defended its bonuses, arguing that they were promised last year before the crisis and cannot be legally canceled.”
The Govt. has come to life, and may i say (mashaAllah) in a rapid manner too.
Yes all of you do bring up very good points. However, Sumorani, the issue would be a non-issue, had AIG not been bailed out. The fact of the matter remains, a company which had to ask Govt for help, should not be giving huge bonuses to its heads. The message this gives to taxpayers (you and me) who fork this out overtime is that, big heads of such companies don’t care to curb their habits regardless of the circumstances.
As someone said earlier, the issue was not raised with such intensity earlier because people were not directly affected by it. But when a company is on the payroll of the public (so to speak), then it becomes everyone’s business to know what the company is doing and what it is spending its money on, and it becomes the responsibility of the Govt. to thoroughly intervene/investigate/clamp any unnecessary spending. Bonus, my friends, is reward for “good times”, right now are not “good times” despite what the company ledger might show. It is the very inflated numbers and false show of profit, unethical practices, and lack of oversight that has landed us where we are today.
But i do see Govt. taking keen steps to correct the course; lets hope they succeed and do what is in the best interest of the public.
Now a bigger question arises, is the Sec. of treasury to be held accountable?
