Momma, let your babies grow up be executive management

A nutria, actually. They loooooove to hump the slickery smoothness of suit head.

 

It's kind of amusing to watch folks get huffy over what a *Private Business* does with its money. Amusing in a weep-in-a-corner-for-the-world sort of way.

Did anyone actually read the first story? Or did you just skim over it and assume that Executives were getting their fat bonuses while the working man loses his mortgage.

All the first story says is that the criteria that the Executives will be judged on for 2008 is different than that for 2007. The reason? The Board wants to keep the executives motivated to make money, and they already know the severe negative impact that foreclosures are going to have on the bottom line in 2008. No sense punishing them multiple times for the same poor decisions.

What exactly are we "sheeple" supposed to do about it? How about...not blame someone for lending us money when we end up not being able to pay it back...for starters? How about...realizing that a private company can do whatever it wants to with its money? How about...realizing that money is the motivating force behind hard work and good decisions?

What are we sheeple supposed to do about it?

 

I'm in agreement, but WaMu isn't a private company.

 

Does not compute.

 

It's still a private business in the private vs. government sense of things. yes, it's publically traded. doesn't mean it is publically owned.

 

It is available for sale, via publically traded stock, to anyone in the general public. Those people can and should have a say in how it's run. And when the irresponsible lending practices of many of these companies adversely affect the economy as a whole (i.e., you and me), they should have to answer for it.

 

But if Joe Blow has the money to go buy 51% of the company's shares, there's nothing stopping him, thus making the company public.

And really, that's irrelevant. WaMu can do this if they so chose, sure. And yes, the people signing these mortgages are at fault. But WaMu is sending a loud-and-clear message that's it's A-OK by them to enable the folks who are getting in over their heads, knowing full-well that these people have no hope of making their payments. That may be WaMu's prerogative, but that doesn't make it <i>right</i>. Plus when this is becoming such a problem that it's affecting the entire economy, then it does become something that government might need to polk its collective head into.

 

But SigR's point is well taken. It would make no sense to bang on the executives twice for the mortgage fiasco, because then they have no economic incentive to turn the thing around. You could fire them, I suppose, but the next guy couldn't be held responsible for further write-downs, either, and would have no economic incentive to take the job if such were the case.

 

I'm not saying fire them, but why reward them with cash bonuses for doing either bad work by signing off on risky mortgages, or explotative work by signing off on mortgages knowing they can't be paid?

But I must add, SigR does make valid points.

 

These are performance based bonuses that are supposed to be based on, ya know, the performance of the company. These guys and gals get obscene amounts of money if they bring in big profits--ok, when that happens they're probably making a bunch for the shareholder investors, so no problem with them getting a big ol' chunk, too.

But, when the company is losing money, the stock is tanking (down from $40 a year ago to just over $10), and the execs still get bonuses?

Basically, this is saying have your cake and eat it, too. You're going to get paid while investors lose. And probably the rank and file employees lose as well.
Sorry, no profits, no bonus. And no exceptions. The rules should not change mid-game.

The shareholders really ought to pitch a fit about this.

 

Exactly. An alleged performance based bonus that doesn't factor the most important facet of the industry right now? That does not make an iota of sense to me. Perhaps I'm missing something, but to me it's akin to determining the winner of a basketball game without factoring in number of baskets scored.

 

You are missing something. They already know that they are going to have to write down more mortgages based on the mistakes of the past, i.e., before this fiscal period. If they continue to bang on the execs for what happened last fiscal year, then those people have less incentive to turn it around in this fiscal year.