Topic of the Week The Ugly Truth… To get out of this economic mess we need to think differently
Turning Our Faltering Economy Around:
• Bonus only when profitable.
• Executive pay needs to go down too.
• More layoffs will kill any recovery.
• TARP funds, CEO must go.
Dear Readers: I’m going to begin this column with a current events/corporate priorities quiz. Your job is to decide who got fired and who got a bonus. Please, no wagering.
Example One. When a bank robber pushed his backpack in Seattle bank teller Jim Nicolson’s face demanding money, Nicholson said his instincts kicked in. He threw the bag to the floor and demanded to see a weapon. When the robber started heading for the door, Nicholson followed him, tackling him on the sidewalk and holding him until police arrived.
Fired? Or a bonus?
Example Two. The banking industry has written down approximately one trillion dollars in losses since the recession began, in addition to receiving hundreds of billions in bailouts from taxpayers.
Fired? Or a bonus?
Example One. Our bank robbery-foiling teller was fired.
Jim Nicholson foiled this bank robbery on Tuesday, by Thursday he was fired based on Key Bank’s policy of quickly complying with robber’s demands and avoiding confrontation. Did he potentially put some people at risk? Yes, a verbal warning seems totally appropriate for not following company rules. But firing him after he saved the bank money and personally put a bank robber in jail?
Example Two. Our wealth-flushing bank employees were given huge bonuses. HUGE!
The banking industry recently paid over $1 million dollars in bonuses EACH to 4,800 workers after a year in which they lost billions and literally took capitalism to the brink. For example, J.P. Morgan Chase & Company, distributed $8.7 billion, a sum far larger than the $5.6 billion in earnings the bank reported. Let me go over this again. The bonuses were larger than the amount of money the bank earned during the preceding year.
If you’re keeping score at home, the guy who saved his bank money was fired, the people who lost huge sums of the bank’s money got big bonuses. Funded by taxpayers.
We’ve lost our way when the synonyms for capitalism today are entitlement and avarice, not outcomes or performance. Here are a few suggestions for how to nudge our corporations back to reality.
1. Bonuses can only be awarded when a company is profitable. Duh!
2. Executive pay should be slashed when a company fails to generate a profit. When a company loses money, the executives should share in the suffering, just as they lay claim to the benefits when the company does well.
3. Layoffs need to be the last option or there won’t be anyone left to buy anything. Every time a corporation lets an employee go, recovery loses one more consumer. We need to get much more creative in ending layoffs.
4. There is one place where we’ve not seen enough layoffs. The executive suite. I believe that every company that received government bailout checks or TARP funds should can its CEO. Immediately.
Oh, yeah. Jim Nicholson, the fired bank teller, is available. Guts and commitment should be rewarded and this is a darn good place to start.
About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. If you have a question for Bob, contact him via [email protected]
Thought of the Week
"Wise men learn from other's mistakes, fools from their own."
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We’re mad as heck… How investors feel about the economy:
• 83% agree shareholders should be involved in CEO pay decisions
• 79% want strong action taken to correct the problems that exist today
• 34% are angry about the debacle on Wall Street and regulatory failures