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March 29, 2009

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The Bonus Armies

Brian Tierney - PRSA International Conference ...

Image by hyku via Flickr

Hilzoy figures out why folks are so p-oed about executive bonuses. It’s not totally about the douchebags who ran AIG into the ground (even if they were hard-working, profitable, probably actually fairly competent douchebags). It’s about the douchebags who ran the Philadelphia Inquirer and Philadelphia Daily News into the ground (and hundreds of other major businesses like it.

Philadelphia Media Holdings CEO Brian Tierney and his two underlings both got raises and bonuses just before the company declared bankruptcy and just after the papers’ unions voted to give back raises to help keep the company solvent. They still laid off hundreds of people and even stiffed the government by failing to turn over the payroll taxes, insurance premiums, and union dues they collected from their employees.

On top of that, Tierney went batshit crazy:

According to Newspaper Guild representative Bill Ross, Tierney once shook up a management meeting by barking “I will not lose my f*cking house over this!” And Ross says a couple of people emerged from a private meeting with the CEO claiming that he’d spoken to them, in his 12th-floor office, with a baseball bat in his hands. Ross also adds that in January, Tierney took to patrolling the parking garage, watching to see what time employees were arriving to work and asking managers about those who were late. “Thatís what I’m getting calls about now,” says Ross. “Heís walking around the parking garage. If he gets hit by a car, it’ll be his own fault.”

You know, I live in this town, and I never heard any of these stories until now. Obviously, my two local newspapers didn’t report them.

I think Hilzoy has a real point, though; outrage over lucrative bonuses paid to executives of companies in trouble IS in part a transference of anger coming from other places. But it’s not just general anger about the economy or plebeian ressentiment. It’s anger about this, about looting the store while pleading empty pockets.

Tim-sig.gif
Posted March 29, 2009 at 2:54 | Comments (4) | Permasnark
File under: Cities, Language, Snarkpolitik

Comments

Good insight. I'd generalize it even further -- I think most people were *not aware* how much of your compensation comes from bonuses after you pass a certain crazy threshold in American business. Multiply that by the sense of unfairness -- "bonus for WHAT?" -- and you get outrage.

More importantly, though, was the RISK allusion in the title purposeful? And, either way, pls start a band called Tim Carmody and the Bonus Armies. ASAP.

Hahaha! No, RISK-allusion was totally unintentional. I was thinking of these guys, not these guys.

I think your explanation, Robin, is, forgive me, the default/intuitive one in this case. It's usually coupled with some kind of explanation about how "most Americans think that bonuses are for when you do a good job."

I'm saying (well, I guess Hilzoy is saying, but I'm also saying) that many, many Americans are already familiar that bonuses for a certain strata don't have anything to do with doing an especially good job. Instead, they are people awarding themselves extra money for no reason out of pure greed/ego while asking everyone else to sacrifice.

Sometimes, it really is just a rip-off -- so forgive us if we assume that it just might be.

Huh. You might be right. I guess I'm extrapolating from my own experience. Even as recently as a few years ago, I thought of bonuses as being subsets of income. A bonus might be, you know, 5-10% of your annual salary -- something like that. Not 5-10X your annual salary!

(My view of this, I'm realizing now, was mainly shaped by the role the annual bonus played in National Lampoon's Christmas Vacation, which I have seen approx 20 times. Chevy Chase is going to use it to put in a swimming pool. Not, you know, buy a plane.)

No, Robin -- I think you're right! It's true! Most people don't know how compensation works, and it takes a whole lot of time/energy to figure it out.

I'm just saying that anger over the bonuses is more complicated than just that. It's not just "those guys did a lousy job -- they don't deserve a bonus." It's a broadly justified sense that "rich people give themselves bonuses to steal from us."

Neither of these assumptions are applicable in many of the AIG or other cases. But you need to understand both experiences in order to understand the anger.

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