sethgodin.typepad.com — The failed bankers on Wall Street have been whining that if they have to cut bonuses and salaries dramatically, they'll be unable to recruit great talent, and they need great talent to fix the situation...
Mar 23, 2009 View in Crawl 4
charlinoMar 23, 2009
Excellent post, and I agree !00% with what was said.
maggielmcgMar 23, 2009
I totally agree with this post--the ongoing media assertions that these guys are all worth their weight in gold and irreplaceable is killing me. Maybe in a boom economy there might be some truth to needing to pay millions to retain top talent; in this economy, however, it's total bulls**t. How many talented execs are without jobs entirely and would be willing to work for a fraction of what the guys who will supposedly walk if they don't get their multi-million dollar bonuses are there? My answer is plenty.Since when are the ones who make the most money the actual best and brightest? Since never. There are tons of overpaid morons out there who have no idea what they're doing but, by virtue of either connections or pedigree, lucked into multi-million dollar jobs. Just because a person makes a fortune in a high-power job doesn't mean he/she's actually the best qualified to do that job. Of course I don't need to bother wasting my breath making this argument--the state of the economy speaks for itself and is a testament to this very fact; if these people were so talented and valuable, then why is the country in the dire financial straits it is?How about, instead of arguing that if you don't pay these guys top dollar they'll walk, let them all go and do an open call for the real best and brightest who actually care about getting this country out of the toilet and are willing to work for reasonable wages? Ones who actually care about more than being able to bank millions when the rest of the country can't pay their mortgages or feed their families.
lbeyriesMar 23, 2009
The proof is in the pudding, so to speak. Obviously, the people who have been getting the big bucks running these corporations into the ground are not the best and brightest. Maybe if these high bonuses are an incentive given after a job well done, not as an incentive to come on board then the companies will actually be doing well and prospering.
fliewrMar 25, 2009
In theory, Seth is correct. The problem is that the board of a company is setting the salary structure, not the shareholders. Most of the members of the board are CEOs or future CEOs. It's in their best interest (even if it's a short-term best interest) to raise their CEO's pay so that they can go to their board and ask for more money, more stock options, more perks. (Gregg Easterbrook has some good analysis of this in some of his TMQB columns on espn.com.) Technically, the shareholders could toss the existing board members out and vote in a new board that would be more responsive. However, our country has shown that incumbency or entrenchment in the establishment is a huge advantage, mainly because such a small percentage actually pay attention to the details. The example of hiring lawyers is somewhat misdirected. The people at the top were still raking in much larger salaries and bigger benefits. It might be correct to say that companies should squeeze the entry-level salary of managers, etc and replace the salary with incentives. Then in two to five years, the best and brightest would still be with you while the others could walk.
vitruvian78Mar 25, 2009
Agreed! I doubt all theses execs who are getting bonuses are thinking startup. They're probably thinking what island in the Caribbean to buy next. Bloomberg is one in a handful of execs who actually created something from his fortune in finance, and then again he was laid off when he did it. Otherwise, he would have had no motivation. So spare us the bonus = competitive market sermon.