In a discussion about the AIG bonus issues with friends last night, I made a rather heated comment about my own bonus from my current employer. I said that while some in the organisation were discussing refusing their bonuses, “there is no way in the world I would be refusing my bonus”.
After the heat cooled I thought some more about that comment and about the situation in AIG.
Firstly, my own situation. Bonus payments are a common part of remuneration in the IT industry. They’re both a performance bonus (an incentive to achieve organisational goals beyond your job description) and a retention payment (used to make sure that scarce resources remain in an organisation).
My bonus is a contractual requirement, although the organisation can vary the percentage which gets paid (and presumably this year the % will be low).
Thinking back on my statement above, I think there are some scenarios where I would give up my bonus but certainly not because of guilt or pressure from anyone else.
The point isn’t about greed or charity or anything like that. It’s about getting what I have earned and what I do with the money being my choice. Pretty similar to this guy.
As a manager (admitedly, a very junior one), this letter makes me cringe. It’s from one of the very senior managers at AIG resigning over the bonus debacle.
From the sounds of it, this is a very effective, astute manager who is leaving AIG because of a bonus amounting to ~$700k.
What it’s hard to realise for people who don’t work in business is the scale of financial responsibilities many managers deal with.
Let’s look at the AIG example. It’s been reported that AIG lost $62 billion through it’s poor management of swap deals. That’s $62,000,000,000 an astounding figure.Â
If the letter above is to be believed, only a handful of the 400 employees had any responsibility for this. Let’s assume 20% to be conservative. So 80 people had responsibility for these losses. That’s $775 million per person.
So by my calculations, the bonus Jake was being paid was 0.09% of the losses each of the involved employees were responsible for.
Am I making myself clear? Maybe not.Â
If financial institutions are going to be successful they need to have great people. These people are responsible for huge amounts of money. The difference between having a good person in these positions and a bad one means the differerence between making and loosing hundreds of millions of dollars.
Jake admits he may be overpaid. I can admit that the bonus payments seem like obsurd figures to those who are struggling to live on $30k a year. But if AIG is going to survive (and the US government has made a huge investment to make this happen) it desperately needs good people at the top.
What good leader is going to leave another role to take Jake’s job now? And more importantly, what does the unavoidable continuation of the loss in leadership at AIG mean for the organisation? Obama, other politicians and the American public need to remember that there’s more than one way for an organisation to fail.
Â
That is the suitable blog for anyone who wants to find out about this topic. You understand a lot its almost exhausting to argue with you (not that I really would want?aHa). You definitely put a new spin on a subject thats been written about for years. Great stuff, simply great!
Can I simply say what a relief to search out somebody who really knows what theyre talking about on the internet. You positively know tips on how to bring a difficulty to gentle and make it important. More people have to learn this and perceive this side of the story. I cant imagine youre no more widespread because you undoubtedly have the gift.
Aw, this was a very nice post. In concept I want to put in writing like this additionally ?taking time and actual effort to make an excellent article?but what can I say?I procrastinate alot and on no account appear to get something done.
Thank you for all of your efforts on this web site. My mother take interest in getting into investigation and it’s easy to see why. Many of us hear all concerning the lively mode you give reliable steps by means of your blog and therefore foster response from people about this matter while our own simple princess is learning a lot of things. Have fun with the rest of the year. You are always performing a great job.
I discovered your blog site on google and test a couple of of your early posts. Proceed to maintain up the very good operate. I just further up your RSS feed to my MSN News Reader. Searching for forward to studying extra from you later on!?
That is the correct weblog for anybody who wants to seek out out about this topic. You realize so much its virtually arduous to argue with you (not that I really would want?aHa). You undoubtedly put a new spin on a subject thats been written about for years. Great stuff, just nice!
Aw, this was a very nice post. In idea I wish to put in writing like this moreover ?taking time and actual effort to make an excellent article?however what can I say?I procrastinate alot and on no account appear to get something done.
Would you be focused on exchanging hyperlinks?
very nice publish, i certainly love this web site, keep on it
Your home is valueble for me. Thanks!?
Your house is valueble for me. Thanks!?
WONDERFUL Post.thanks for share..extra wait .. ?
After I initially commented I clicked the -Notify me when new feedback are added- checkbox and now each time a comment is added I get four emails with the same comment. Is there any approach you possibly can take away me from that service? Thanks!
Good post. I be taught one thing more difficult on different blogs everyday. It can all the time be stimulating to read content from other writers and observe a little bit one thing from their store. I? desire to make use of some with the content material on my weblog whether or not you don? mind. Natually I?l provide you with a hyperlink on your web blog. Thanks for sharing.
I enjoy you because of all your valuable effort on this blog. My daughter enjoys doing investigations and it’s really obvious why. Most people learn all regarding the compelling ways you provide vital tips on this blog and as well as improve response from visitors about this situation so my girl has been understanding so much. Take pleasure in the remaining portion of the year. You are always performing a dazzling job.
I discovered your weblog web site on google and check a number of of your early posts. Proceed to keep up the excellent operate. I simply extra up your RSS feed to my MSN News Reader. Looking for ahead to reading extra from you later on!?
I am usually to running a blog and i actually respect your content. The article has really peaks my interest. I’m going to bookmark your web site and preserve checking for brand spanking new information.
Spot on with this write-up, I really assume this web site wants far more consideration. I?l probably be again to learn far more, thanks for that info.
A powerful share, I simply given this onto a colleague who was doing a bit evaluation on this. And he the truth is bought me breakfast because I discovered it for him.. smile. So let me reword that: Thnx for the deal with! But yeah Thnkx for spending the time to discuss this, I really feel strongly about it and love reading extra on this topic. If possible, as you change into experience, would you mind updating your weblog with more details? It’s highly useful for me. Massive thumb up for this blog put up!
I? have to examine with you here. Which isn’t something I often do! I get pleasure from studying a put up that can make individuals think. Additionally, thanks for allowing me to remark!
After study a couple of of the blog posts on your website now, and I truly like your manner of blogging. I bookmarked it to my bookmark web site list and might be checking back soon. Pls check out my web page as properly and let me know what you think.
Oh my goodness! an incredible article dude. Thank you However I’m experiencing concern with ur rss . Don? know why Unable to subscribe to it. Is there anybody getting identical rss problem? Anyone who knows kindly respond. Thnkx
Youre so cool! I dont suppose Ive learn anything like this before. So good to seek out any person with some unique thoughts on this subject. realy thank you for beginning this up. this web site is one thing that’s wanted on the internet, someone with slightly originality. helpful job for bringing one thing new to the web!
There are actually a whole lot of particulars like that to take into consideration. That could be a great point to deliver up. I provide the thoughts above as common inspiration however clearly there are questions just like the one you carry up where crucial factor can be working in sincere good faith. I don?t know if finest practices have emerged round issues like that, but I am sure that your job is clearly recognized as a good game. Each boys and girls really feel the impression of only a second? pleasure, for the rest of their lives.
There may be noticeably a bundle to find out about this. I assume you made sure nice factors in options also.
I’m just commenting to make you understand what a great discovery my wife’s princess obtained going through your site. She came to find so many details, which included what it is like to have an excellent teaching spirit to make many more completely grasp certain very confusing issues. You actually exceeded my expected results. Thanks for supplying the effective, dependable, revealing as well as easy thoughts on this topic to Mary.
each time i uaed too reead smller content that aas well cldar
thekr motive, andd tbat iss lso happening wiuth this
artile whifh I aam readig now.
There are definitely a number of particulars like that to take into consideration. That could be a nice level to deliver up. I offer the thoughts above as general inspiration but clearly there are questions like the one you carry up where an important factor might be working in honest good faith. I don?t know if best practices have emerged round issues like that, but I am positive that your job is clearly recognized as a fair game. Each boys and girls feel the impression of only a moment? pleasure, for the remainder of their lives.
After study a number of of the blog posts in your website now, and I really like your means of blogging. I bookmarked it to my bookmark web site listing and can be checking again soon. Pls take a look at my website as well and let me know what you think.