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 ...
Yes - most sales folks are on commission sales plans. Executives, on the other hands, are typically on an executive comp plan. The latter should involve triggers, measures, etc. Unfortunately, many are simply discretionary payouts to key execs - approved by the CEO and board. Typically, those types of bonus programs are unsophisticated, disconnected to reality, and encourage a good-old-boy relationship between the board and the CEO.
Yup. It’s really amazing to me how many people spend their time and energy worrying wabout how much money someone else makes instead of working to make more themselves.
But that’s the template now: someone else is holding YOU back, Mr. and Mrs. voter, and you need the Democrats to fight them for you and give you what you need.
Any country dumb enough to fall for this deserves what it gets. But people like you and me don’t.
Huh? They are basically nothing more than order takers.
My husbands dept actually made money this year. Their bonuses were scaled way back even so. You don’t have to agree with the way the financial industry pays people,however it’s clear that very few people here on FR even KNOW how their compensation is structured. This is the first article I’ve found that even addresses the fact that it’s not just the guys at the top who got bonuses. If you don’t think anyone should have gotten their bonus (so that in effect their salaries were cut back by as much as 28%) that’s fine with me—I just want people to know that’s what they’re advocating when they say there should have been NO bonuses).
Yes, they were
Do you think the money should have been used to pay salaries?
> It Obama suggesting that the government strike down private contracts?
Why should a company be able to pay performance bonuses with government bailout money? Particularly when the company as a whole has done so poorly? Where is the “performance” that justifies the “bonus”?
Most bonus schemes I have been a part of contain a HUGE component of company performance and usually team performance as well. Because bonus comes out of profit (not expense) if the company has no profit then there are no bonuses — just like that. Doesn’t matter how well you have individually performed in that case.
Bonuses were approved before the bailout.
Given that TARP is already there, yes I think funds should be used to pay salaries to the extent that they are needed to save jobs.
Salaries are not bonuses. Crooks like John Thain et al. are stealing money from the taxpayers with these huge bonuses. We all know that we’re eventually going to have to pay for it with higher marginal tax rates. It’s essentially a regressive tax structure.
Bill Murray: “They’re always forcing rules on us . . . like your shouldn’t drive on railway track with an oncoming train.
Drunk passanger: “Um, that’s one rule I happen to believe in!”
No bonuses if they are getting our money!
> My husbands dept actually made money this year. Their bonuses were scaled way back even so. You don’t have to agree with the way the financial industry pays people,however it’s clear that very few people here on FR even KNOW how their compensation is structured.
Nobody in the financial industry should receive ANY bonus if their employer is receiving bailout funds for poor financial performance. NOBODY.
You see, Bonus is just that: “Bonus”. It is extra: not income that you should be relying upon receiving. It is entirely contingent upon company performance in most industries. Sure, individuals must contribute against that performance to earn their share of the bonus, but in most companies if the company does not do well — no bonus for anybody.
And so, yes — I believe that Obama should set aside any private contractual arrangements that allow government monies intended for bailout to be distributed as “bonus” to employees of recipient companies.
It is an obscene gross miscarriage of Natural Justice that anybody could be rewarded for the melt-down of the finance industry.
What B.S. Nobody is criticizing salesmens’ commissions. Salesmen aren’t looting companies, top management is.
And I bet all those hot shots on WAll St. voted for Obama.
> Bonuses were approved before the bailout.
Then they should be paid with pre-bailout money. Ooops! There is none... tsk tsk tsk. Too Bad, So Sad.
Bailout money should only be made available to these loss-producing companies on the basis that said monies are not to be used for staff bonuses.
I’m sure glad I’m not an American taxpayer: I would be screaming like a scalded cat!
Top management at large American companies are running their companies into the ground and looting the hulks.
That is a separate problem from the government looting taxpayers pockets but it IS a problem and it is a problem we should be concerned about.
Obviously the solution is NOT for the government to nationalize but don’t confuse recognizing a problem with the proposed solution.
CITIBANK $160 billion losses in the last 2 years.
NO SOUP FOR YOU!!
How bout telling Zero it is none of his dang business. He can mind his 747 jet at taxpayers expense but chastise corporate jets a 20th of that size. Forgot to mention Piglosi’s taxpayer funded 727. I don’t want to be too hard on political greed, its just a comment.
Unless a company is being subsidized by taxpayers or has received bailout money it is not up to taxpayers or the government to influence or control pay and bonuses, no matter how crazy and out of line they may be, as long as they are legal and aboveboard.
That is more properly the concern of owners or stockholders.
A lot of the bonuses, especially outrageously high amounts given to executives who have driven their companies into the ground, do boggle the mind.
But if owners and stockholders don’t approve they have various option to deal with it.
If the Democrats don’t want to use government funds to pay the corporate bonuses that were in their contracts, they shouldn’t have voted for the bail outs. The bail-outs are wrong, period.
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