Bonus Indignation

** Check out the follow up article, "The Unconstitutional Congress. **

Congress is shocked, shocked, to see that AIG awarded bonuses to employees! Gasp, contracts existed where if employees met certain conditions they would get bonuses. How dare they!?! Cheap? No. 100% Free. Trade stocks for free on Zecco.com. The Free Trading Community. www.zecco.com

How much are these bonuses? $787 billion, nope? How about $401 billion, try again? What about $178 billion? Not even close, the bonuses are $156 million. So why am I so sarcastic? Simple, these indignant Congressmen are hypocrites! Hey Grassley, have you clowns considered resigning in shame at your reckless abandon in spending, which is far less than Seppuku that you are calling the AIG folks to perform? I didn't think so.

After spending like drunken sailors and setting up any number of bailout programs, these goofballs are angry because employee contracts were fulfilled? I guess that's what skilled politicians do, feign anger at insignificant events all the while smiling and laughing while creating the conditions for hyper inflation.

Consider, as stated in the Wall Street Journal, that, "He (Obama) and the rest of the political class thus neatly deflected attention from the larger outrage, which is the five-month Beltway cover-up over who benefited most from the AIG bailout."

Shocked? Don't be, considering the likes of Sen. Chris "Sweetheart Mortgage" Dodd (D-CT) and Rep. Barney "I had a sexual relationship with a Fannie Mae executive Herb Moses" Frank (D-MA) who are on the case. Protect your Medical Identity with TrustedID. $1,000,000 Warranty & Great Customer Service

Congress has had its hands in the financial crisis since the very beginning and bear a significant amount of blame. For them to start criticizing private employment contracts is absurd, much like everything else Congress and Obama have been doing since his inauguration. It is time to face the facts that government has overstepped and our country is in danger of losing its foundation in the rule of law.

Boards of Directors Finally Taking Responsibility - At Least Some of Them

While I haven't written about the topic on this blog, I have been a very strong critic of Boards of Directors and their general lack of accountability over time.

While that statement is very broad and full of exceptions, my personal opinion of boards, in general, is skeptical at best. Although most large, publicly traded corporations' directors are very successful and well regarded, there is appearance of a lack of accountability. CEOs are fired, managers are fired, but directors are rarely put out, except by activist investors, like Carl Ichan. Find Premium Finance Jobs on Doostang. Start Now! www.Doostang.com

While working about 223 hours a year, directors usually make about $30,000+ in retainers and much more in stock, as well as "meeting fees" for an average of $119,164. Not bad work, if you can get it. RingCentral Online - Free Trial plus 10% Off

However, according to the Wall Street Journal, in an article titled, "More Directors are Cutting Their Own Pay," some boards seem to have gotten the egalitarian bug!

According to the article, GM, Ford, Eddie Bauer, and Herman Miller, to name a few (out of 43), have agreed to reduce their compensation. While this is a good start, it may be a false comparison, as:

"The pay cuts follow recent increases in overall compensation for individual directors...total median director compensation rose 12% to $119,164...It was the third straight year of double digit increases."

Seems like these folks have been doing pretty well, despite the disastrous years the major automakers have seen. However, I must give credit where credit is due. The directors at GM: "...recently cut their pay for the third time in four years...," but, "...revived their full retainer in 2008." However, with the bailout money, they reduced their retainers to $1.

Ford seems to have done a little better: "...directors gave up the $40,000 cash portion of their annual retainer, as well as payments for committee chairmen." So maybe, maybe, boards are beginning to see that even they, the ones who are supposed to supervising the executives, are part of the rise and fall of the company. Perhaps reducing director compensation is a pointless exercise for companies that are billions in the hole, but it does demonstrate accountability.



Although I would like to end this on a high note, the Journal article speaks of an unnamed company and an unnamed director, who, on being asked to reduce his compensation, demurred, as his compensation for 223 hours of work is "...an important part of my income."

I guess if you make the US gross median income of $50,740 and lose your only job, its not as important as that director's income. How's that for accountability?!