How much do people matter?
Comments (2) Insurance giant AIG to pay $165 million in bonuses
http://news.yahoo.com/s/ap/20090315/ap_on_bi_ge/aig_bonuses
We will discuss this a bit later, but I couldn’t help but post this. Do you buy the tournament model (we have to pay more than the rest to get the smartest people, and that by so doing we will be managed best)? Doug Smidl mentioned that it was definitely worth it to pay really “good people” 30% more. That seems to make sense at some level. But does it make sense here? Consider the following quote.
“We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” Liddy said.
Now check out the performance of AIG in the last year:
