Thursday, March 19, 2009

No Double Standards: 'Beggars Can't Be Grifters' Edition

I might be more inclined to listen to mammonite warblings on the taintless virtue of private enterprise and meritocracy after the Invisible Hand wipes away the likes of this, from a close reading of the AIG bonus contracts we just paid:

These bonuses are payable regardless of performance and are calculated at 100 percent of 2007 compensation for all employees except senior management, who receive 75 percent of 2007 compensation. The amount is payable unless they are fired with good cause, resign without good reason or fail to meet performance standards. For those hoping that these employees could now be fired, “good cause” is defined in the agreement as a very high standard.
Among other right-libertarian fancies, caterwauling over auto workers' pay and 'merit pay for teachers' will be, perhaps, worth considering if and when we have merit pay for private-sector millionaire mendicants. But not one second before.


Anonymous said...

These are retention bonuses. They are payable for sticking around and not abandoning the bilge pumps for a better-paying job, or an equal-paying job at a company not sinking.

These bonuses go to the people who didn't screw things up, generally, and who are needed to unscrew things.

Do we have a moral obligation to pay these people as agreed? They came to work in the vinyard. They worked the full day. We agreed to pay them extra for not abandoning their work for the guy next door.

I'm troubled at the overall reaction, and the failure to reveal what the bonuses were for.

Dale said...

timp, I am well aware these are bonuses paid for retention. I think most people are aware of that, in that people are aware that the recipients are being paid large sums of money merely for being on the scene when the company collapses -- oh wait, the company didn't collapse quite yet because of the billions taxpayers have fed into it.

You hit on the real essence of the situation here, albeit indirectly: people are outraged at the state of the system that can allow this to happen. It is precisely true to say we do not know the individual human beings. This is not personal. This is systemic. Millions are getting laid off and, meanwhile, a bunch of demonstrable hacks at AIG are getting bonuses for *not* being laid off.

I also realize that in a big company, good work and good people can be teeming below the surface of what reaches the public.

For what it's worth -- not much because it isn't personal -- I used to work for an arm of AIG. I know about Model-Netics and I know something of the company culture. I probably know at least a few of the individuals directly touched by this. Suffice to say my memories of the company ethos don't increase my overall sympathies, but again, it is not personal but systemic.

Anonymous said...

I have a hard time understanding how these nincompoops who helped their employers fail are worth retaining.

But, then, I'm just a member of the great unwashed when it comes to this.

A.I.G. failed for one reason only. They thought that because the current regulatory climate allowed them to, it was a fine idea to write insurance policies without maintaining adequate reserves. The insured losses occurred, and the benefits due to the insureds amounted to vastly more than the money the company had.

How is it not the fault of everyone but janitors and clerical staff that this happened?