Thursday, December 20, 2007
A Beer Stained Lesson In Responsibility
You remember how the Met's Sir Bonkers Blair fought to keep his annual bonus even after his year of unmitigated disaster? You know how top public "servants" get bonuses irrespective of results (see this blog)?
They've all just been given a lesson in responsibility by James Cayne, the chief executive of investment bank Bear Stearns (aka Beer Stains). He has announced he will forgo his bonus in an acknowledgement of the bank's dire and possibly criminal performance in the American sub-prime mortgage crisis.
Yes, we know Cayne is already rolling in it (top 400 richest yanks), his bank was centrally involved in the sub-prime crisis (the DA is currently on the case), and as an investment banker he undoubtedly eats babies at the weekend. But this is a bonus to which he was contracturally entitled. He's waiving it to acknowledge his responsibility for the performance and possible misdeeds of those under him.
Compare and contrast with the public sector: weasely statements about how staff are not fit for purpose, how they've let the nation down, how a full review has been ordered, and how it was nothing to do with me guv.
PS Over at the Dragon's Pen, the Dragon says: "The story is that Jimmy Cayne was away at bridge tournaments without a cell phone or pager while the two internal Bear hedge funds blew up. I think what this shows you is that investment banks today are really indistinguishable from the hedge and private equity funds they claim are their ‘customers’, and that the CEOs of these organisations are now wholly the prisoners of the main position (risk) takers who generally sit one or two rungs down from the CEO level. Not saying this is a bad thing, necessarily, but it does mean that for shareholders it almost doesn’t matter what the CEOs do, they are figureheads only. Your capital is being punted in massive bets made by much lower profile people just where the shadows start." Just like your taxes and personal data are being chucked around by lower profile people who are beyond the control of our preening grandstanding politicos. Makes you think.