In his recent Value Driven column (“Chris Dodd Wants to scrap Your Bonus“, FORTUNE magazine, March 16), Geoff Colvin argued that the proposed tough new limits on Wall Street bonuses in the US stimulus package will “inadvertently reward nonperformance and drive talented financiers away from the companies that need them most”.
Ignoring the simplistic examples cited in the article, can Colvin name “talented financiers” who have not brought things upon themselves?
If they’re the masters of the universe as Colvin described them, they wouldn’t have their hands in the TARP cookie jar in the first place.
For the sake of argument, let’s say I’m a poor decision-maker whose actions helped bankrupt my company. Do I throw a tantrum and leave because my bonus is taken away, knowing full well that another company will recognise my “talent” (or lack of it) and hire me (despite)? What kind of logic is that?
Even if this is not the case, the idea that the talent pool will evaporate without this level of compensation is a false choice. Considering the general malaise on Wall Street, where can the “talented financiers” head to if they choose to go? Furthermore, many of these masters of the universe would by no means be paupers if their salaries and bonuses fell a little closer to earth.
For those who are planning to pull a DeSantis, I’d say call their bluff and let them leave.
To: Ex-V.P., A.I.G. From: The Taxpayer