March 22, 2009

Only the goose gets the pâté

We're all familiar with the refrain: reducing recurrent labor costs, thereby increasing shareholder value is always an excellent thing, nay, a fabulosity of sharp shooting commercial acumen! Labor might suffer a massive amount of hemorrhage-like small amount of pain, but it's all for the long term prosperity of the greater number of people or shareholders (whoever has the most money wins).

Happily, when it comes to salaries and bonuses for executives, that rule doesn't hold, it's the opposite.

Reducing salaries or recurrently extravagant and unjustifiable executive top-ups (known as "bonuses" in MBA speak) is the only way to increase shareholder value and save money.

Wall Street "took a tumble" (I love the way that the share market is spoken of as if it's a person, a living entity) a couple of days ago all because the US government has threatened (not actually done, just the threat) to hit bonus payments - only those made by companies in receipt of federal bailout money - with an extra dose of taxing, thereby taking all the fun out of the annual top-up-and-quadruple-my-salary-time at a few companies. Weirdly, this sent the Dow Jones index (or something or other) toppling by 1.6 points.

Investors are awfully, awfully nervous that clever executives from a few companies might take their bats & balls, collectively resign, and go off to China to work for 50 cents a day in a Xmas tinsel making factory, rather than face the indignity of paying a whopper tax on the extra part of their humongously attractive incomes.

Of course, there is always that risk. Always. It might happen. Then where would all the failed companies of the First World be?

Failed, failing, failing - and mostly newly owned by the government - with MBA graduates across the country refusing to lead us out of the depravities of their making.

Gosh.

Wouldn't that be too awful?




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