Multi-million dollar bonuses paid to executives in banks, insurance and other financial corporations and automobile companies in the U.S., the U.K. and Europe has raised a lot of buzz in the news media and the comedy circuits. Any number of worthy pundits have opined about the immorality of bonuses paid to executives of failing firms, when the money came from the taxpayers and the average workers, whose salaries are tiny fractions of the executives’ earnings, get nothing—sometimes, not even severance payments after being laid off.
What I would like to point out is how the organizations that have paid these bonuses have twisted the meaning of the word. Webster’s dictionary defines a bonus as “extra payment over and above salary given to an employee as an incentive or reward.”
What are, for example, the executives of AIG being rewarded for? Multi-billion dollar losses for their shareholders?
Some might argue that the current downturn and losses to AIG are not those executives’ fault. U.S. Treasury Secretary Timothy Geithner says that AIG’s failure would pose a “grave danger” to the U.S. financial system and, presumably, the economy of the whole world. But he has also requested that the US Congress give him more regulatory power over such private companies.
The executives at AIG were part of a financial corporate culture that encouraged the “sub-prime” lending practices that triggered the current economic meltdown and have contributed to its depth. That attitude—as exemplified by pushing the definitions of risk past accepted levels—is also shown in their bonus practices.
If you feel outraged by these bonuses, you’re justified for several reasons:
- the sheer size of the payments—hundreds of millions of dollars in some cases, far, far more than anyone needs to live on—are flagrant exhibitions of greed
- the executives at AIG, the Bank of Scotland and US car manufacturers pay themselves the bonuses, without any reference to anyone who might balk at them
- these payments are not a portion of the profits the corporation earned, or tied in any way to jobs well done; they’re simply what the recipients who pay themselves bonuses figure they can pull out and get away with
In other words, these aren’t bonuses at all. They’re just what people with access to the funds can stuff into their own pockets. And when the money comes from the taxpayers, as it has with recipients of bailouts in the US, outrage has led to action such as sit-ins.
Maybe, just maybe, we need to re-think the workings of our economy and the controls society in general puts upon private actions, like businesses. But that’s a discussion for political blogs.
For this communications blog about words, I’d just like to say: let’s stop calling payments made by executives to themselves “bonuses.” Let’s call them “drawings,” like we used to. Let’s leave bonuses to people who have done more than expected.