Deal Or No Deal: Bailout Beneficiaries Need to Play or Head to the Locker Room

The news today that the White House wants to try something new to curb high bonus payouts to executives who were begging for bailout money just last year is a welcome surprise to me.

I think Roland Martin said it best earlier on the R&R segment of Rick Sanchez's CNN show, when he criticized the White House for just now going aggressive with the game.

I mean seriously, the carefully crafted consequences (publicly saying the White House doesn't approve, for instance) for exorbitant bonuses to execs is weaker than the Washington Redskins offensive strategy - it just hasn't been scoring any points (Sorry Skins fans, but ya'll are hurting right now losing to four winless teams).

We have been gasping and frowning and sighing for months now as we hear big corporation execs talking about the perils their businesses face, the dangers to the market should their company crumble, and from an economic standpoint, I can respect the logic in wanting to then "bail" some of these businesses out. But right after the bail out, you go take your company on a employee recognition trips. Or you come out of 2008 without having to file bankruptcy, so you throw those extra tax dollars into that executive salary, saying "job well done for saving our company by duping the government into bailing us out rather than the smaller businesses that might have been more responsible with the money."

The idea is floating around that the top receivers of TARP funds can be asked to cut up to 90% of the cash component of salaries from last year's levels. Dang, so excluding benefits, you mean to tell me my take home will go from $7,000,000 (the salary AIG CEO received last year) to $630,000? That doesn't even buy gum these days, right?

Give me a break, losing money for everyone hurts, but I am a littler hard pressed to understand the pain of moving from a seven figure, to a six figure salary, benefits untouched. Lifestyle would definitely have to change, but ummmm, if your company had filed bankruptcy, you probably would have lost much more.

Maybe in contracts, executives were guaranteed a certain salary increase yearly. I respect that - this is why you want stuff written down and signed. But they should start mandating that an extenuating circumstances clause be included in any employment contract moving forward -

"Said contract will be null and void if the company is no longer using its own money to run itself."

We are all Americans, and deserve the right to achieve our own happiness - that is the wonder of free market, capitalism, American individualism and all that. But this is one instance where execs should willingly take the "L". Just "paying it back" and asking for forgiveness rather than permission from the American public is not being a team player. The government gave you public dollars - which means that all Americans, those that did or did not support the bailout, are on the team to see the company rebound for the greater good of helping our economy and all our lives get better. Clearly some execs of these major firms have been acting like the egotistical star athlete: only concerned about the team when their personal interests are directly affected by the teams ability to win.

J.W. Verret, a professor at Virginia's George Mason University Law School, says this is a political approach that will actually be counter-productive, as talented, quality execs will leave U.S. companies for more lucrative positions. The point missed is that compensatory rewards work, but not on shaky foundation. When your money isn't even right, you can't go rewarding people in spite of that. There are those community activists and teachers and nonprofit program managers that are clearly underpaid for the value of their work, yet still go in there with the fervor and commitment to make things happen. Maybe we need execs that don't mind the six figure salary or the "political approach" to curbing waste of taxpayers' dollars, because for them, it may be more about the results their efforts bring. Maybe, just maybe, an exec who accepts the position for six-figures will be just as qualified as the executive that would be driven away due to money.

So the rest of this month and next month will be the official side-eye period, as I check the news and see which companies have complaints about limiting the way in which they throw around tax dollars. Because there is no room to complain, when your alternative to not getting the bailout could have been so much more devastating.

Contributor, Young Writer's Block
Contributor, The Carmon Report