29/01: When a bonus really isn't.
Category: General
Posted by: jamespothmer
The New York Times asked me to write about corporate bonuses for an online discussion with others who knew what they were talking about.
Rewarding Bad Behavior
by James P. Othmer
The problem isn’t with corporate bonuses; it’s with corporate semantics.
By definition, a bonus is “something in addition to what is expected or strictly due.” Perhaps, pre-Enron, pre-Madoff, pre-collapse of the financial, real estate and automotive industries, executives got away with receiving their annual seven figure bonuses because we were willing to believe that they truly were surprised by them. Or we were so comfortable with our own financial situation that we didn’t care.
After all, it was a bonus! Super-sized versions of the token gestures we were occasionally given even in our own jobs. The holiday turkey. The extra week’s paycheck. Or, if you happened to work in my field of advertising during the 1990s, the window pane envelope filled with soon to be worthless stock options.
The primary reason we could call them bonuses is because some years we got one, but for so many others we got an explanation. A key account was lost. The global network had an off year. Something to do with the price of something.
Any true bonus has the thrill of uncertainty about it. And the knowledge that when you finally get a good one all of your vocational stars are in alignment.
However, when a bonus is not only expected but mandated under any circumstance, it ceases to be a bonus. It becomes an outrage. Same goes for perks.
All of which is why I’m convinced if the Wall Street executives who this year raked in the sixth-highest haul in the history of bonuses, despite being responsible for the worst performing market of our lifetime, simply had the foresight to call their windfall anything but a bonus, we’d be cool with them.
We don’t need to reform corporate bonuses. We just need to rephrase them. Too bad bailout is taken.
Rewarding Bad Behavior
by James P. Othmer
The problem isn’t with corporate bonuses; it’s with corporate semantics.
By definition, a bonus is “something in addition to what is expected or strictly due.” Perhaps, pre-Enron, pre-Madoff, pre-collapse of the financial, real estate and automotive industries, executives got away with receiving their annual seven figure bonuses because we were willing to believe that they truly were surprised by them. Or we were so comfortable with our own financial situation that we didn’t care.
After all, it was a bonus! Super-sized versions of the token gestures we were occasionally given even in our own jobs. The holiday turkey. The extra week’s paycheck. Or, if you happened to work in my field of advertising during the 1990s, the window pane envelope filled with soon to be worthless stock options.
The primary reason we could call them bonuses is because some years we got one, but for so many others we got an explanation. A key account was lost. The global network had an off year. Something to do with the price of something.
Any true bonus has the thrill of uncertainty about it. And the knowledge that when you finally get a good one all of your vocational stars are in alignment.
However, when a bonus is not only expected but mandated under any circumstance, it ceases to be a bonus. It becomes an outrage. Same goes for perks.
All of which is why I’m convinced if the Wall Street executives who this year raked in the sixth-highest haul in the history of bonuses, despite being responsible for the worst performing market of our lifetime, simply had the foresight to call their windfall anything but a bonus, we’d be cool with them.
We don’t need to reform corporate bonuses. We just need to rephrase them. Too bad bailout is taken.