12/24/2007
He took a bet
Goldman Sachs paid $100 million to its Chairman/CEO for turning in US$11.6b profits while competitors like Citigroup and Merrill Lynch suffered multi billion dollar losses. And he is duly rewarded.
No doubt that he had done well. The enormous profit could be contributed by his decisions. But for the profit to be that huge is because the company was big. And he bet right.
He could not make billions for the company if the company is small.
What if he bet wrong and lost billions? At the most he will get a sack. But if the wrong was not too big, he still got to keep his job and pay.
This is how the game of big corporation is being played. Bet big on other people's money. Win big and get big rewards. Lose big, just pack up and go. And often it could be a 50/50 chance of winning big.
Is this kind of pay justifiable? It can be easily justified. It can also be easily flushed down the toilet hole.
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2 comments:
Those people who make speculative punts on the stockmarket using bank loans are doing the same thing ie. using other people's money (in this case, the bank's) albeit on a smaller scale. So everyone's doing it, that is the way to make money, in case you don't yet know. This is hardly news.
not the same lah. you borrow money from the banks, you lose, you still pay from your own pocket.
playing an organisation's money as an employee, lose, organisation pays. win, you get big bonuses and stock options and people pat you on the back to say 'how clever.'
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