You are seeing, I hope, the first steps of major change in the way we handle compensation here in America.
We're calling the bluff of Wall Street. Let's see them quit. For too long they've pretended they have us by the balls; now it's the other way around, and let's see how much they like the squeezy squeeze now that they are in trouble.
Well the truth is "we" don't handle compensation in this country and I earnestly hope that "we" never do. That is a matter for negotiation between employeer and employee. However, as the current administration seems to have a basic problem with the idea of private property and individual freedom, we will likely hear more about this.
It is interesting that very little has been published about how many people are involved in the $169 million in bonuses and just what the average individual amount might be. In addition, in the financial industry in particular, salaries are often small and the majority of an employee or manager's compensation comes from a performance based bonus.
My company sets aside 22% of pre tax profits for bonus payments to employees, and they are distributed rather widely in the company. This is not particularly unusual.
I'm not suggesting that there haven't been serious excesses in Wall Street. My preference in these cases is to allow the companies to fail, the stockholders to lose everything; the employees to lose their jobs with severance payments intact and the bondholders to get what's left (if anything).
We have been presented with the theory, accepted by both parties, that the banks and companies like AIG are too deeply imbedded in the money supply and the flow of credit to be allowed to fail. The theory holds that we will suffer more injury by letting them fail than by bailing them out. I'm not really sure the theory is correct, but as long as we are applying it, I would rather rely on the management ability of the average greedy bastard on Wall Street than the wisdom and honesty of Barney Frank, Maxine Waters, Chris Dodd and Charlie Schumer.