I'm amazed that Wall Street would have any qualms with the government wanting our money back and the right to approve future bonuses. No company ought to consider giving additional stock options or cash bonuses to executives who don't generate profits. The definition of "bonus," according to Dictionary.com, is "a gift to reward performance, paid either by a private employer or by a government." Usually, it's hedge fund, buyout, venture capitalist, money management or private equity firms that carry the pitch forks, torches and ropes ready to lynch. I have raised money from private and professional investors, and I can tell you that they have a say in management's bonuses. In fact, your biggest investors are usually on your board of directors. There's no way Citigroup ( C), JPMorgan ( JPM) or any other Wall Street firm would give any company a dime without some control over how the money is spent. As a recipient, you have a choice of accepting the money and the conditions that go along with it. If you want your at-bat to swing for riches, you gladly put your name on the agreement. Companies that take government money shouldn't look at the money any differently. Once you take money, you have taken on a new partner. The companies that have taken money these days are no different than those with a long history of success. They believe that with the right amount of cash, they can get back to their once-glorious past. Chrysler did it in the early 1980s, and so did Mellon Bank in the late 1980s.
Bond, stock and other Wall Street gamblers think of themselves as entrepreneurs. So there should be no surprise or expectation of a bonus when their companies lose money. As for the concern that you won't attract the best people without big and steady bonuses, I have heard that many times when I was emptying out a non-performing company. Branch Rickey, the famous Brooklyn Dodgers general manager who changed the color of baseball by promoting Jackie Robinson to the Majors, later in his career served as the general manager of the then-lowly Pittsburgh Pirates. When Pirate Hall of Fame slugger Ralph Kiner asked for a raise, Rickey reminded him the Pirates finished last, even though Kiner hit 40-plus homers. You don't give your people bonuses when the company has a losing season. Right now, Wall Street is like a ghost town in the old West. You can hear the ghosts of Lehman Brothers, Bear Stearns, Drexel Burnham Lambert, Kidder Peabody and other firms that have imploded over the past 25 years. There are managing directors who would be glad to get $100,000 a year with a shot a making a fraction of what they once made just to get a chance to play. It's the law of supply and demand. There is much greater supply for experienced Wall Streeters than there are positions. As for the private equity and hedge funds that say they won't work for capped wages, they are bluffing. No business leader or investor minds paying for superior performance.
Everybody is replaceable, and there is always talent available. Bonuses aren't an entitlement. As the definition says, they're for extraordinary performance.