Posted on 01/30/2009 1:20:10 PM PST by brytlea
Hypothetical…
A salesman for Company X - which makes widgets - has a quota of $1 million in sales per year. His compensation is $50,000 per year base salary plus 10% of everything he makes over quota. The salesman busts his rear all year, working the phones and hopping on airplanes. He does well, bringing in $2 million in sales, doubling his quota. His compensation is $150,000 that year. Additionally, those on his work support team - back office, administration, etc - would also likely share in that success. I suspect few in America would have a problem with that scenario.
But what if Company X lost money that year because top management decided to get into the business of selling “whatsits.” The whatsits didn’t sell, and in fact did damage to the company overall. Now let’s add that Company X was not only suffering massively but whose overall business is seen important to the American economy and it received Federal assistance to keep operating. Should the salesman who did his job selling widgets and beat his quota not be paid his bonus? If you say he shouldn’t, you probably want to stop reading.
(Excerpt) Read more at briansullivan.blogs.foxbusiness.com ...
I have yet to see a company market its shares to investors by saying “we have the lowest-paid executives in our industry running our company.
:)
I only read the beginnning of this, but isnt he confusing bonuses with commission?
Most of the bonuses being criticized are the result of contracts. It Obama suggesting that the government strike down private contracts?
No, the problem was the government giving away taxpayer money in the first place.
I suspect you are correct, sir!
May be I am not versed in their payroll, but why the hell are they paid “bonuses” for essentially running the companies to the ground? Because they received government welfare?
“It Obama suggesting that the government strike down private contracts?”
Oh no, don’t you dare bring logic into the argument. This is an emotional issue, sir.
Altho now, maybe that would be a badge of honor! LOL
“I only read the beginnning of this, but isnt he confusing bonuses with commission?”
A lot of contracts guarantee bonuses based on sales figures, which are also the basis for commissions.
No, read the whole thing. Some do make commission, but many don’t, but a large part of their compensation every year is a bonus. Secretaries etc.
I agree, I was against the bailout, even tho it may have very likely had a detrimental effect on my family.
B I N G O !
I don’t even understand your question. What are you talking about? Did you actually read the entire article?
It isn’t about how the bonuses were earned. it is all about how much money some people are making. And it is a capital crime to make more money than some poor unproductive slum.
Blatant class warfare. Ocommunistic.
It depends entirely on how the bonus is structured. It is really, really uncommon for bonuses to be based solely on personal performance — at least, to my experience. Those sorts of payments are called “commission” and they form part of your legitimate compensation ie they are a salary expense, not a distribution of profits.
Bonuses, on the other hand, most often have a large component based upon team and company performance. To qualify for bonus, most often you need to achieve agreed stretch objectives. Then so does your team. Then so does your company.
If people are getting bonuses on that basis, given the huge losses and given the need for government bail-outs, it is nothing short of fraud IMO. They are being compensated for poor performance: whether that poor performance be at individual level, or team level, or company level.
Bonuses are not a salary expense, usually. They, like dividends, are one-off profit distributions.
I get incentivizing wealth creation, but using taxpayer bailout money to pay for the 18B in wall street bonuses is ridiculous. For a democrat, republican, independent, anybody.
> I only read the beginnning of this, but isnt he confusing bonuses with commission?
I believe he has. Bottom-line versus Top-line.
“I don’t think the president was referring to a salesperson making a $100,000 bonus. That’s a lot different from a CEO taking multimillions from the coffer being filled by federal welfare paid for by the taxpayers, including that salesperson.”
I don’t think the president knows what he’s talking about. But let’s say you’re right, and let’s say the issue is businesses using bail-out money to do whatever they want. Was Congress/Bush/Obama stupid enough to think that just because the corporations were given magical government money they’d start spending it along profitable lines? Didn’t they know that these corporations were losing money at the time they bailed them out? Aren’t they aware of the fact that you’ll get a better return on your money if you invest in a business that is poised to make money, as opposed to a business that is already losing money?
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