Who needs success when failure pays so well?
In December 2008, ending its worst year ever with a $25 billion loss, Merrill Lynch rewarded its executives with a whopping $3.6 billion in bonuses. Just before being bought by Bank of America, which received $45 billion of taxpayers’ money to bail it out, and part of their trouble was the huge losses they bought with Merrill Lynch, that continued to to grow ever since. The $3.6 billion paid in bonuses put the troubled Merill Lynch exactly that much deeper in the hole, effectively channeling billions of dollars from the taxpayers’ pocket to the failed bankers’ fat personal accounts.
Per the dictionary, a bonus is “an amount of money added to wages on a seasonal basis, especially as a reward for good performance.” Does making a bank hit its worst ever loss of 25 billion dollars in a single year count as “good performance” these days? Or does a banker’s job description define “good performance” as “showing up to work most workdays” or “not spilling the champagne in the private jet”? Does managing the bank into bankruptcy lower an executive’s performance score, or is that irrelevant? If this “performance” is worth a $30 million bonus for each of the top 4 executives, how much would their bonus be if the bank didn’t go bankrupt?
Per this article, the $3.6 billion Merrill Lynch paid out in bonuses were distributed to “a small number of individuals.” Apparently the “leadership” of Merrill “chose to make millionaires out of a select group of 700 employees,” and an even smaller group was awarded “gigantic bonuses.”
The top four recipients received $121 million, the next four received a combined $62 million, and the next six a combined $66 million. Overall, the top 149 people who got bonuses received a combined $858 million, and 696 people got bonuses of $1 million or more.
If there is no profit, because a corporation is deeply in the red but its officers seize a fortune for themselves from its accounts, while they already know the corporation is headed for bankruptcy and will have to be salvaged with a government bailout, then how are those gigantic bonuses they paid out under those circumstances different from any other form of theft?
Could it be that it is a fault in the legal system that while one gets to put in jail for taking a million dollars from a bank at gunpoint, another suffers no consequence for robbing it of over 30 million dollars, watching the company he is supposed to manage go bankrupt and even contributing to a worldwide economic disaster? Who is then the bigger criminal - the man who threatens the lives of people in order to empty the teller’s drawer in a bank who is driven away in a police car, or the man who causes the whole world’s economy to be shaken and threaten the livelihood of millions of people who is driven away in a limo, with a fortune beyond imagination?