Of all the signs of opulence carried over from the bubble years, corporate jets and big executive bonuses seem to bother Washington the most. BofA is selling three of its seven jets, a helicopter that was owned by Merrill Lynch and one of two of its New York corporate apartments. Obama wants firms that accept “extraordinary assistance” from the government to cap annual pay at $500,000, disclose pay to shareholders for a non-binding vote, claw back bonuses of corporate officials who provide misleading information, eliminate golden parachutes for those terminated and adopt board policies for luxuries such as entertainment and jets.
This reaction to big bonuses in firms that are taking huge writeoffs, losing big money and requiring massive government bailouts was predictable. From 2002 to 2008, the five largest Wall Street firms paid $190 billion in bonuses while earning $76 billion in profits. Last year, they had a combined net loss of $25 billion but paid bonuses of $26 billion.
(excerpted from the March 2009 edition of A. Gary Shilling’s INSIGHT)
So all we have to do stop calling these payments "bonuses", and just roll it all together into "salary". And don't you just love how they say their hands are tied because a lot of these payments are based on employment contracts. How's about applying some of the same "persuasion" Detroit used to get its workers to agree to contract changes??? You know, for the good of the company/country/economy and all.... I won't hold my breath.
ReplyDeletehow about claiming these contracts are based on fraud? or I like Congress's idea of taxing the bonus money. how bout 90% witholding tax?
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