The Winkest Link

Merrill Lynch lost $11 billion this year and the CEO requested a $10 million bonus. The Board of Directors was actually considering it before the CEO withdrew the request amid a firestorm of criticism.  

Was there ever any possibility that lower level employees at Merrill Lynch would get a bonus? The bonus for 4000 Merrill Lynch employees was the loss of their jobs.  

The corporate bonus has been a boondoggle to corporate logic for years. Executive salaries have escalated faster than employee salaries, but that barely touches on the story here. The real issue is the executive bonus.

As it stands now, the typical CEO bonus is based on very short-term returns. How much did the stock go up last quarter? Last year?  There is almost no incentive for the CEO to care where a company will be in ten years. They never plan to be with the same company ten years from now. Never.

And what of you, the regular employee, who DOES want to stay more than 10 years, or maybe even retire from the company?  To the CEO, you are a sap. He feels if you were as smart as him you would be a CEO. You got laid off because you weren’t smart enough to be a CEO.

So the average CEO, while saying how much “we love our employees,” treats them all like pawns in his own fiefdom. Sell off assets, lay off workers, anything to make the short-term bottom line. Another great trick is to lay off full-time workers and replace them with part-timers (with lower salaries and no benefits).

The CEO will drain a fortune from the company assets for his bonus and, regardless of what happens to the company, drift off into “retirement land” with pools and servants and trophy-wives. All accompanied by a complete lack of conscience.

The bonus amounts are outrageous. Tens and hundreds of millions of dollars.

Those amounts would drain even the biggest corporation of assets if it were given for a lifetime of work. These can be given annually. 

Monday: CEO Bonus, Part Two: Solutions

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