MF Global Bonuses: You Need to Spend Money to Make Money
NEW YORK ( TheStreet) -- Paying bonuses to top executives MF Global (MFGLQ.PK) sounds like a gross injustice, so small wonder we see senators Jon Tester (D., Mont.) and Amy Klobuchar (D., Minn.) writing letters to former FBI chief Louis Freeh, trustee of the bankrupt company, expressing outrage about reports that Freeh wants to do just that.
According to a report in The Wall Street Journal citing an email from Frank Piantidosi, an adviser to Freeh, bonuses would go to chief operating officer Bradley Abelow, General Counsel Laurie Ferber and CFO Henri Steenkamp.
According to the report, the three executives could get "performance-related bonuses" of "as much as several hundred thousand dollars each."
Tester calls the request "outrageous," since, according to his letter, "Montana farmers and ranchers...suffered significant losses following the disappearance of hundreds of millions of dollars" from MF Global.Klobuchar makes similar statements in her letter. But why is it necessarily outrageous? The Wall Street Journal's report also includes an interview with Frank Piantidosi, an adviser to Freeh's firm, who argues keeping the trio around is "saving a considerable amount of the estate's resources." Won't the senators admit that this at least sounds plausible? How do you find missing money without relying, at least to an extent, upon the people who saw it last? Unless Abelow, Ferber and Steenkamp are charged with a crime (which they haven't been) what incentive do they have to help find the money unless you pay them. Sad to say it, a few hundred thousand dollars is a relative pittance for these people. Instead of insisting that no bonuses should be paid out, why don't the senators simply insist that Freeh and co. prove the executives were helpful in increasing the payout to Tester's farmers and ranchers? Is this so difficult? If they can prove they helped, they get to keep some of the money. If they can't, they don't. I know populist outrage is in fashion these days, but c'mon senators: use some common sense. -- Written by Dan Freed in New York. Follow this writer on Twitter.
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