It comes down to reality - and it's fine with me 'cause I've let it slide . . .
I'm in a New York state of mind.
-Billy Joel
Merrill Lynch CEO John Thain wants a $10 million bonus for 2008. It is not going to happen but the idea that he requested it shows the disconnect between Wall Street and Main Street.
I always thought that bonuses were paid by companies that made profits. Merrill Lynch lost $11.67 billion this year.
I also thought that in order to get a bonus, a company had to still be in business. Merrill Lynch was taken over by Bank of America. The original company is gone.
Those of us who run our own businesses don't get bonuses if we lose money. We usually don't get bailed out or taken over. If we lose enough money, they lock us up and board up the front windows.
I don't understand why people like Thain can't get that. He ought to be able to get by without a bonus this year. He got at least $15 million in 2007. Even with a high powered, Wall Street lifestyle, he ought to have a few dollars left over.
And he also should understand that he is putting a stick in the eye of all of us in Main Street America.
Like many Americans, I never wanted the $700 billion Wall Street bailout to happen. I thought it was Washington insiders bailing out their insider buddies on Wall Street.
Absolutely nothing that has happened since then has convinced me otherwise. In fact, the longer I look at it, the more I realize that Paulson and his crew cares only about Wall Street and no one else.
The American people have been the outsiders, but they are the ones who are footing the bill. And they truly resent it.
As Americans cut back severely on holiday spending, get fired, see their retirement savings drop and live with the daily gloom that a worldwide recession brings, they don't want to see anyone else getting special favors.
Especially not Wall Street CEOs.
Average Americans are a lot like me. They figure that the insiders stuck it to us but there is little to do about it now. The big banks are not giving the $700 billion back.
Every time I see another Wall Street-type trying to get a multi-million dollar benefit for himself, it sends up my blood pressure. I feel like the people on Wall Street are rubbing our noses in it.
It's like the bully in school who steals your lunch and eats it right in front of you. You get angrier and angrier with each bite.
If the American people have made one thing loud and clear, it is that we don't want bonuses paid to Wall Street CEOs. We don't want them flying in private jets or paying for all their buddies to go on long junkets.
We want them to act like the rest of us. Or, at least, a little bit like the rest of us.
That is why I want all Wall Street companies to live by the same rules that Main Street businesses live by.
Executives' bonuses should be based on profits. No profit = no bonus. My business, like almost every other small business in America, only compensates executives when we actually make money. That seems like a simple enough idea. Bonuses shouldn't be some multi-million dollar figure that comes out of the sky. If anyone on Wall Street gets a bonus, it should be based upon how he increased value for his shareholders and stakeholders.
There is a different wrinkle for the Wall Street executives. Most of them are being bailed out by the American taxpayers. Thus, they should act like public servants. You don't see government bureaucrats getting big bonuses or riding in private jets or limos. Their salaries are fixed by civil service grades and cost of living increases.
The people on Wall Street can't have it both ways. They can't take the American people's government money and ignore the American people. They need to recognize that a lot of people on Main Street don't like what they are doing and are getting angry that no one on Wall Street or in Washington seems to be listening.
If the gang on Wall Street lives by the same rules and realities that those of us in small business live with everyday, they will get a better feel for what Americans really think about them.
And maybe stop rubbing our faces in the dirt.
Don McNay, CLU, ChFC, MSFS, CSSC, is the Founder of the McNay Settlement Group in Richmond, Kentucky. He is the author of Son of a Son of a Gambler: Winners, Loser and What To Do When You Win the Lottery. You can write to him at don@donmcnay.com or read his award winning syndicated financial column at www.donmcnay.com