I - and you - own a good chunk of AIG and GM and a number of big banks, but where's our say in whether or not execs at these companies get bonuses? Well, we don't have any, and there are some lobbying President Obama to make good on promises made when these guys were mismanaging ... badly ... or is that a quintuple negative?
As reported in today's Washington Post by Brady Dennis, "American International Group's recent discussions with President Obama's compensation czar have centered on whether the company should pay about $250 million in promised bonuses that come due during the next nine months.
AIG has asked the government to rule on several categories of bonuses, said a person familiar with the discussions. These include millions of dollars in payments owed to top corporate executives in coming days, and the troubled insurer has been seeking senior Treasury official Kenneth R. Feinberg's consent in an effort to provide the company with political cover."
As an owner, I say no. In fact, I say hell no! The reasoning is so faulty as to be laughable. These managers who got the trouble and the country into trouble might leave if we don't give them the bonuses promised. Well, now, I've been in management for the better part of 40 years, and if someone is mediocre at best and threatens to leave, I say let 'em. In fact, I've got to ask myself, why did we keep them on so long?
And with unemployment at least at 13.5 percent (read MY columns regarding the true unemployment figures), you can't tell me that there aren't a couple of thousand people with the same skills - better skills - to do those jobs, jobs which have been around for at least a decade and some which go back twenty years. Seems to me that one of HR's primary functions is to find good people to fit the needs of a company at the best salary range possible. Well, let HR do its job, and forget asking the government which has shown itself to be worse managers than those at GM, Chrysler, and AIG combined. (And, no, I haven't forgotten about the big banks which packaged bad loans with little or no appraisal. I've got a house five doors down from me which has a "value" today of $400,000 with two mortgages totaling $560,000. I'd like to see the appraisal on that one!)
Am I angry? You betcha. If bonuses are given - and they will be - to mismanagers at AIG, then I question all of the policies that have gone and will go into this so-called "stimulus package." I also will start questioning how the government can continue to allow the development of monopolies which not only undermines competition, but puts smaller smaller companies at such a disadvantage as to undermines at least one pillar of capitalism. I have been screaming about this since Oracle bought Peoplesoft. No, I've been screaming about this for at least 15 years. Ask my wife. Where's the Sherman Anti-Trust Act? Oh, that's right, it's under the aegis as the same guys who will give out bonuses to lousy managers.
[Don't believe that I've been complaining about this and railing against HR's role in this as well as the management of the companies. Read HR's Role in Mergers and Acquisitions, then "Avoiding Management Pitfalls," then "Problem Prevention and Problem Solving," and then throw in all of my other "pitfall" articles going back to 1993 and first appearing on the Web in 1995. It doesn't take a genius to have seen the writing on the wall, but I wonder, genius or not, if anyone listens. P.S. In one 2004 article in the subscriber's section I said, "California might be the sixth 'largest economy in the world, but if it doesn't watch out and start balancing its budget, it's going to be tenth, and then..." Well, I see we're now eighth.]
All Rights Reserved. Copyright 2009. Ethan A. Winning