Dear Transocean...

[GregC]

Thanks for making those bonuses and vacations we handed out after our 2008 collapse not look quite so bad.

Regards,
AIG

Despite Gulf oil spill, rig owner executives get big bonuses - CNN.com

[MakiSupaStar]

Wow. This is just infuriating. I always thought bonus's are rewards for good performance. They're not guaranteed. Any observer would agree that they did nothing short of a craptastic job. Even if you have 100 platforms operating effectively with no safety violations, if you have one that causes 11 deaths, and the worst spill in US history, then sorry, you fail. You do not deserve a reward. I would argue that you don't even deserve your job.

[Skitch it!]

Best I bite my tongue, I can't be trusted in what I'll say

[Bassman316]

Not even going to comment because I'm sure it wouldn't sit too well with the mods so I'll keep me mouth shut.

[Blackbird]

I think we've entered an era where businesses decided to replace honest civics with unmitigated stone-faced cynicism. That's what happens when businesses become so big that public opinion becomes irrelevant.

[Jimbob Jones]

Way of the world nowdays. But being perfectly honest, if you were one of the dudes getting the bonus, and the company just handed it to you, how would you react? Give it back and say 'no'?

[Deluge Of Sound]

You guys are ridiculous.

It's their money, they can do with it what they will.

This thread reeks of class envy.

[Vorago]

My guess is that if you spend enough time in this kind of neo-liberal, do whatever the **** you want kinda capitalistic system, you loose your connection with the real world and you accept the $$...

[Deluge Of Sound]

You keep your high horse out of it, you Rap-lovin', Photo-takin', good-beer brewin' Commie!

[Vorago]

I will, don't worry

[Deluge Of Sound]

Except you won't be able to, because I'll take my second-amendment-approved firearm over there and shoot it.

In the face.

Because that's how we do things here--We'll get riled about it, act snarky, grab a beer, and not do anything to solve the problem.

[Mark Perry]

Heard about this on the worldservice. Transocean gave the bonuses for the "best year for safety so far"?!

[Bassman316]

Originally Posted by Deluge Of Sound

Because that's how we do things here--We'll get riled about it, act snarky, grab a beer, and not do anything to solve the problem.

LOL

[aborgman]

Originally Posted by Deluge Of Sound

You guys are ridiculous.

It's their money, they can do with it what they will.

This thread reeks of class envy.

It's their money?

They haven't gotten any government subsidies, special tax breaks, and BP has covered every cent of every oil spill/contamination they've been involved in?

It's their money like it was Goldman-Sachs money.

[GregC]

Originally Posted by MakiSupaStar

Wow. This is just infuriating. I always thought bonus's are rewards for good performance. They're not guaranteed. Any observer would agree that they did nothing short of a craptastic job. Even if you have 100 platforms operating effectively with no safety violations, if you have one that causes 11 deaths, and the worst spill in US history, then sorry, you fail. You do not deserve a reward. I would argue that you don't even deserve your job.

Originally Posted by Blackbird

I think we've entered an era where businesses decided to replace honest civics with unmitigated stone-faced cynicism. That's what happens when businesses become so big that public opinion becomes irrelevant.

I agree with both of these posts. As someone who researches the investment industry as part of my job, executive compensation is part of a circular system in my view. CEOs are too often treated as rock stars--they're given lavish pay packages that include bonuses for when the company does well on a wide variety of metrics (sometimes these metrics ignore the big picture, as Transocean demonstrates), but also gives them a big financial cushion if they fail. It used to be they'd get their stock options repriced if the stock fell, that way they'd still make money off of them. After a crackdown on that practice, we've moved to the era of golden parachutes, where CEOs who blow up the company still get a big severance package (negotiated as part of their hiring). Sure, there are outstanding CEOs who dramatically turn around companies or spur them to remarkable heights--and these folks arguably earn the big money they make--but they're few and far between.

Board members generally don't have much incentive to rock the boat and challenge pay packages, unless they're paid through long-term stock-vesting arrangements. (Thus, if the company does well over the long term, as opposed to short-term bursts, they'll do well.) Otherwise, they'll take their six figures (if it's a big company) for attending meetings and keeping up, thanks very much.

And mutual funds, who often collectively own big stakes in public companies, don't always duke it out over the pay packages, either. Often, they want to maintain a good relationship with management so that they can either continue to manage the company's retirement plan assets or be selected to do so in the future.

Now the free-market folks might say you can vote with your feet and sell your shares. But one's options are unfortunately limited because so many public companies are engaging in these practices. (Also, you'll take a tax hit if you have gains.) As much as I admire, say, Warren Buffett and Berkshire (definitely a breed apart from the above), I'm not putting all my money with them. And the stock isn't always cheap.

I think this situation could be improved to some degree, but I don't know where the impetus is going to come from. Regulatory ideas would get into politics, so let's not go there.

All this isn't to say people shouldn't invest, just be selective and aware. And it's a flawed system, but corporate governance is still better in the US than a lot of other places.

[Deluge Of Sound]

Originally Posted by aborgman

It's their money?

They haven't gotten any government subsidies, special tax breaks, and BP has covered every cent of every oil spill/contamination they've been involved in?

It's their money like it was Goldman-Sachs money.

It was Goldman-Sachs' money.

Duh.

[Bob Lee (QSC)]

Originally Posted by GregC

I agree with both of these posts. As someone who researches the investment industry as part of my job, executive compensation is part of a circular system in my view. CEOs are too often treated as rock stars--they're given lavish pay packages that include bonuses for when the company does well on a wide variety of metrics (sometimes these metrics ignore the big picture, as Transocean demonstrates), but also gives them a big financial cushion if they fail. It used to be they'd get their stock options repriced if the stock fell, that way they'd still make money off of them. After a crackdown on that practice, we've moved to the era of golden parachutes, where CEOs who blow up the company still get a big severance package (negotiated as part of their hiring). Sure, there are outstanding CEOs who dramatically turn around companies or spur them to remarkable heights--and these folks arguably earn the big money they make--but they're few and far between.

Board members generally don't have much incentive to rock the boat and challenge pay packages, unless they're paid through long-term stock-vesting arrangements. (Thus, if the company does well over the long term, as opposed to short-term bursts, they'll do well.) Otherwise, they'll take their six figures (if it's a big company) for attending meetings and keeping up, thanks very much.

And mutual funds, who often collectively own big stakes in public companies, don't always duke it out over the pay packages, either. Often, they want to maintain a good relationship with management so that they can either continue to manage the company's retirement plan assets or be selected to do so in the future.

Now the free-market folks might say you can vote with your feet and sell your shares. But one's options are unfortunately limited because so many public companies are engaging in these practices. (Also, you'll take a tax hit if you have gains.) As much as I admire, say, Warren Buffett and Berkshire (definitely a breed apart from the above), I'm not putting all my money with them. And the stock isn't always cheap.

I think this situation could be improved to some degree, but I don't know where the impetus is going to come from. Regulatory ideas would get into politics, so let's not go there.

All this isn't to say people shouldn't invest, just be selective and aware. And it's a flawed system, but corporate governance is still better in the US than a lot of other places.

Well said.

[Kwesi]

Originally Posted by Deluge Of Sound

You guys are ridiculous.

It's their money, they can do with it what they will.

This thread reeks of class envy.

I don't get too upset over stuff like this if only because 1) It happens all the time and 2) I have not the slightest idea what I could do that change that. But, the way I see it, being a massive billlion dollar company is like being a celebrity, once you get to that point you have an unspoken civic duty to not be a total douchenozzle... However, similar to celebrities, not many seem to have gotten the message.

[Deluge Of Sound]

Originally Posted by Kwesi

I don't get too upset over stuff like this if only because 1) It happens all the time and 2) I have not the slightest idea what I could do that change that. But, the way I see it, being a massive billlion dollar company is like being a celebrity, once you get to that point you have an unspoken civic duty to not be a total douchenozzle... However, similar to celebrities not many seem to have gotten the message.

[Kwesi]

I dun goof'd?