[p2p-research] AIG bonuses: the end of instant gratification?

[Michel Bauwens]

interesting view by umair haque:

http://blogs.harvardbusiness.org/haque/2009/03/crisis.html

- we need disincentives, not incentives

2009/3/19 marc fawzi <marc.fawzi at gmail.com>

>
> I was watching this video<http://www.huffingtonpost.com/2009/03/18/obama-on-aig-the-buck-sto_n_176423.html>of Obama talking about the AIG bonuses and I caught him saying that he
> wanted the bonuses to be based on performance, as if they are based on the
> lottery now.
>
> A worker's individual performance can only be estimated subjectively in
> terms of how it affects the company's performance, especially for large
> corporations where there are a great number of contributors to each gain or
> loss and a great degree of inter-dependency between the workers.
>
> A worker's performance metric is like a peer trust metric in that it is
> prone to being gamed/rigged both deliberately or inadvertently.  That is
> true of any subjective metric.
>
> The only thing in Obama's statement that makes sense (which he can be
> excused for not explaining in detail) is if we were to keep the bonuses and
> pay them only 5 years after the worker's exit (when the worker leaves the
> company) based on the average of the company's performance (measured  in the
> period of the worker's employment + 5 years. For example, those who left AIG
> prior to mid 2003 the bonuses would have much higher bonuses than those who
> are leaving AIG now or who will leave it in the future (due to the abysmal
> effect of the 2008 collapse on the company average performance.) It's not a
> perfect solution but if that's what Obama meant when he said that it's not
> fair that "people make $6M bonuses when things are good and then get bailed
> out by taxpayers when things are bad" then I think it could lead to a more
> fair system.
>
> Marc
>
>
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