AIG proves that bonuses need to be banned

[yodoobo]

What is a bonus anyway except excess compensation? If you are living on your weekly paycheck all year long just fine, a big lump sum is just excess and leads to all the problems we are having now.

Any honest employer will pay their employees a salary or hourly wage. This whole thing about bonuses only incentives the employers and employees to do dishonest things to cook the books to justify these once a year excess compensation payouts.

Furthermore, a ban on bonuses would invalidate these contracts that AIG have written and eliminate the whole contract excuse.

[el_bryanto]

1. A ban on bonuses would be foolish

Particularly in the field of sales, where sales incentives have been a feature for years and for good reason.

Bryant

[yodoobo]

3. Sales is an area where a ban could do alot of good

Providing incentives to sales people to get people to buy things they don't need hurts everyone.

Every high pressure salesmen you've ever dealt with is that way because they are getting a bonus to try to force you to buy something.

Furthermore, alot of these AIG criminals ARE in sales to sell the financial products that ultimately failed.

Bonus's only lead to greed and greed is what is destroying us right now.

[el_bryanto]

9. Ah - well there is a point of contention

Do Bonuses lead to Greed? Or is Greed an underlying human motivation?

If the later, as I suspect, Bonuses don't create the Greed, they merely channel it into ways that are annoying to me personally but that provide value for the companies involved.

Bryant

[yodoobo]

12. Thats worthy of discussion, but I do think

that they feed off each other.

Having a big bonus dangled in front of you fuels the greed that may very well be an underlying human emotion.

Does bonus's exploit ones capacity for greed? I think I could make a good case that it does.

I wonder how many people in the banking industry committed fraud, that they would not have other committed had they not had a big bonus dangled in front of them?

[el_bryanto]

13. Of course they exploit ones capicity for greed

That's the whole point, isn't it?

Bryant

[yodoobo]

14. Well I agree that it is the whole point

And probably why I'm having a problem with it.

[el_bryanto]

15. Yeah but people are naturally selfish greedy assholes

I mean that's our natural condition. And bonuses channel our natural greedy selfishness into productive channels.

Now obviously getting bonuses for fraudulent activities would be wrong, which is why you need regulation to over see such activities.

Basing your economic theory on humans being nice friendly altruistic people isn't likely to be successful.

Bryant

[question everything]

2. No. Bonuses should be directly tied to meeting one's goals

and/or to the performance of the organization.

When CEOs - not only on AIG - continue to get bonuses when their companies are losing, regardless of their actions, no bonuses should be paid.

And while we are there, members of Congress should not get an automatic pay raise.

[yodoobo]

5. but that thats what a salary is for.

You get a salary to meet your goals. If you are not meeting your goals, then you aren't earning your salary.

[question everything]

18. I should have clarified

Employees subjected to bonuses usually get a promise during their annual review. Yes, there is the regular jobs, but then there are special assignments that may not or may not be met. When these ones are met, they get their bonuses. If they were met only 50%, then they get only 50% of the bonus. Then there are bonuses tied to the corporate performance and this can vary.

This is what is wrong with many bonuses, especially for CEOs, and has been for many years. They get their bonuses even when shareholders see their investments in the toilet.

[BlooInBloo]

4. Gawd that's so fucking stupid.

[yodoobo]

8. What AIG is doing to us is stupid.

[RobertSeattle]

6. Sounds like you've never gotten a bonus

[yodoobo]

11. well I work for a living.

I'm not a corporate executive or banker.

I've never done alot of things but I know wrong when I see it.

I'm no angel but I do try to be an honest person.

[RobertSeattle]

16. My employees get a nice base salary

Based on the success of the company and their hard work, we give out quarterly bonuses. Although we are small (15 employees), we have incredible retention. My employees know that the can live on the salaries, and the bonuses, when they come are gravy.

Comparing this kind of compensation system with the insane bonus system at AIG is apples and Watermelons.

[PVnRT]

7. Hey, let's ban all benefits as well

After all, that's just excess income, basically.

[yodoobo]

10. benefits and salary are essentially the same

Its granted only a weekly basis for doing your job.

Its bonus's that are tied to greed and corruption.

I'm not aware of any corporation, even the AIGs and Merill's of the world that have engaged in massive benefit fraud.

[HiFructosePronSyrup]

17. That's about the dumbest conclusion I've heard yet.

And I've heard lots.

The problem isn't that they're being paid bonuses. The problem is that they're being paid bonuses on the tax dollars dime when they failed to do their jobs and their company failed.