Abrogate the contracts? Publish the names of the recipients in a national Hall of Shame and then invite them to return the money? Exile them to a one square block radius around the NY Stock Exchange? I dunno.
It's a headshaker, these tone-deaf leaders of American business and finance. Almost enough to get me to send my MBA back to the Harvard Business School and resign from the fraternity. I've scoured the papers and none of the worst offenders appear to be friends and classmates, but that doesn't really matter.
OK, so 20 seconds of philosophy about this: the American Dream is about the promise of equal opportunity, not equal outcomes. Some pigs are more equal than others, it seems, and they get the rewards they negotiated for themselves. And, yes, I'll admit to a little bit of envy when I think of the road I've taken into media and not taken into banking or corporate finance and the gazillions I might have earned in that profession. I've done OK for myself and guess what---we're all tanking now.
Anyway, the best non-case for the AIG bonuses comes from Andrew Ross Sorkin in today's NYT. In an interesting twist, he argues that if we don't allow AIG to hold onto its high priced talent, they may defect to other financial institutions and trade/hedge/pounce/devour AIG into submission, and, hence, the rest of us.
I don't have the answers, except to argue that those who earn their high salaries and bonuses on the basis of contracts freely entered into should be paid the money. Tax policy can be a leveler here, for example using ratios of total compensation between the highest and lowest paid employees in a firm, with high marginal corporate tax rates on bonuses and commissions in excess of, say, a million or two or three. Many social democracies around the world have figured out more egalitarian means of compensating execs without the excesses in the American system. Can't we learn something from them?
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