Dumb Executive Walking

As "retention bonuses" soar in the nation's bailout institutions, the primary argument heard for doling out taxpayer money to executives in these companies is that in the absence of such largesse, they will simply walk away from their jobs, leaving the company and the country in dire straits. These people are, indeed, rare talent. After all, as a group, they have caused and presided over the largest shareholder wealth destruction in human history. Taxpayer's should indeed be worried what happens to the world if they walk away from their jobs. These jobs are something they do for the benefit of the world, out of the kindness of their brave hearts hidden behind pinstripe suits and wingtips. As one of the leaders of a failed investment bank remarked, "to keep my best people, I need to provide them incentives." I wondered if he considered even higher bonuses in these times of great stress and tribulations for these executives as they "agree to stay" for the benefit of humanity. He continued, "my best people will simply walk, if they are not provided these bonuses." He, however, stopped short of describing where they will "walk to," whether they will walk to the Atlantic ocean or the New Jersey Turnpike.

But wait, the largest beneficiary of the bailout has more to worry about than the dumb executives walking. In this venerable insurance company, the problem is that the "books are too complicated to understand without the help of those who concocted them." Since these "complicated instruments" actually caused much of the problems for the company, does "understanding" them now really help? Should we try to give the assignment to a few fresh business school graduates, just to see if they can untie the knots? Or is it code for "the counter parties to these instruments would like their money back in secrecy?. Since a large amount of the first installment of the bailout went to buying back securities at "par" from those institutions who "could not do any wrong," perhaps because some have produced great government leaders in recent times and some in close proximity to great countries, who have called for the US "to show leadership" to solve all the world's problems.

In the words of a great man, who runs one of the largest automotive companies in the world, "these are the times companies need the best management. Changing management, bailout or not, is not a good option." Taxpayers may want to start a charity fund to supplement the bonuses to keep these great leaders of our time working (and not walking). Taxpayers should, indeed, be worried about where they will walk to, in the absence of bonuses. The potential application of such unlimited skills and talent could be problematic for industries that actually increase shareholder value and produce something tangible than snake oil and transaction fees.