One of the great things about this job is that we get a chance to see what our readers are thinking. Since we generally seem to attract readers of a very high intellectual caliber (there are a few exceptions), some of their off-the-cuff comments pierce through to the heart of the issue on which they're holding forth.
In a response to David McCann's article posted yesterday, which probed how much Credit Suisse's recent changes in executive compensation could revolutionize bank pay schemes overall, we received a response today from reader James McMonagle that amounts to all you'll ever need to know about the issue:
"Is Credit Suisse trying to take a pragmatic approach to pay? All banks should take a look at the pay packages of small businesses, which are always tied to performance of the whole company. If the company has a poor year, no one gets a bonus. However that ensures two things: (1) there is a company continuing next year and (2) there is a paycheck next year.
"I am amazed at the shortsightedness of these banks' compensation plans. If your bank has a bad year, your compensation plan may just bankrupt the whole thing.
"The primary goal of the small business's compensation plan is to share the wealth in good years and to get by in bad years in order to see another good year. The banks' compensation plans seems to miss the point of surviving to see another good year.
"The argument about losing skilled labor is not a valid argument because there are so many quality people currently available. If the people weren't considered a commodity by the banks, why would there be such large layoffs?
"Banks (and other groups) need a paradigm shift in their thinking about compensation to focus on surviving the hard years." Amen. |
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