What were they thinking – Wall Street Bonuses
January 30, 2009
President calls the $18.4 billion in bonuses paid last year ‘shameful’msnbc.com news services
Jan. 29, 2009
(Read article here: http://www.msnbc.msn.com/id/28916936/)
Anyone who knows me understands my feelings on using bonuses as part of one’s salary – it’s stupid. Harsh words, perhaps. For those of you who remember the tech bubble at its prime – companies gave bonuses and stock options as part of an incentive package and more importantly handed them out like candy as an enticement.
In theory a good idea, in practice, not so much, people tend to rely on the bonus structure as an entitlement. It’s not, bonuses are like fishing lures – they attract people until they are caught in the net and times go bad and people see a third of their income gone for a particular year. The entitlement has become an anchor instead of a lure.
When bonuses are thought of as always being there and then suddenly goes away, everyone gets angry, depressed, or something less than positive – there is a fundamental change in the organization dynamic. Traditionally, when times are bad, the executives will say, “We can’t give out bonuses because we need to restructure and reinvigorate our company. Hang in there, your bonuses will come back.” They seldom come back to where they once were and most people feel cheated because they included bonus as salary.
Companies who use bonuses as “dangling carrots” (I love that phrase) continuously to attract employees are now caught in a trap – if the bonuses are not given – their employees might vote with their feet and leave. Even though the economy is bleeding jobs, talented people may start shopping for hire salaries without bonuses.
When reading the news story regarding Wall Street giving the bonuses (in the tune of 18.4 billion – that’s with a ‘b’), I was shocked at first, but started to realize that Wall Street is doing what they know. What they know is to add bonuses as incentives, in their mind, Wall Street did nothing wrong. In hindsight, the government should have had some restrictive oversight on where the bailout money was spent. Unfortunately, that was never part of the bailout package to Wall Street. Wall Street had Cart Blanche to do what they thought was best for the country and more importantly for their business.
In my mind, this is a WTF moment with a ‘B’. What can be done? Not much, in essence we created the mess and need to step back from what we know and try to create something less offensive. I am not sure what or how to fix it but it seems like we are creating the same mess with taxpayers’ money. For those of you out of a job, my advice is to negotiate a higher salary and leave the bonuses as a ‘nice to have’ – bonuses should never be considered as part of your hiring package.
Lighting a KANDL
January 28, 2009
For about a year, I have been developing a business podcast called KANDL. Standing for Kent AND Lorraine, yes a great play on words, the fundamental purpose for the podcast is to tell stories. One of my dreams, like many people, is to become a writer and since I was little, I wanted to tell stories. KANDL is that storyboard. Back in the early part of 2008, I was talking to a colleague – Lorraine (the ‘L’ in KANDL). Lorraine moved to New Zealand over 4 years ago and we have kept in touch through what I call the 21st century means of email and Skype.
During that time, my wife Kristen turned me on to a podcast. My first reaction is, “What the heck is a podcast?” Suddenly I being the techno-geek in the house learned something new. A podcast is a series of audio or video digital media files, which is distributed over the Internet by syndicated download, through Web feeds, to portable media players and personal computers. Kristen was listening to a podcast called the Hip Tranquil Chick, a podcast on a woman who weaves her practice of yoga and love of all things fabulous into a hip and tranquil lifestyle. (Quote from the Hip Tranquil Chicks’ website.) Needless to say I was intrigued and an idea was forming, why not develop a business podcast telling stories about business. Of course, I hinted at the idea to Lorraine and we started bouncing those same ideas around and low and behold – KANDL was born.
Over the next few months, I will document my journey into the podcast, social networking, and eye-opening misadventures of creating, starting, and developing a business podcast. I hope everyone enjoys the webisodic events of starting a new business venture from a simple idea. The story is interesting and I hope helpful as well as enlightening for those who continue to read this article.<-->