Daniel Gross at Slate has a good article about the bonuses and pension benefits American Airlines planned to pay its executives while asking the employee unions for pay cuts.
His question, "Why are airlines paying 'retention' bonuses to executives no one else would hire?", was similar to mine: "Why is AA paying retention bonuses to executives who have run the company to the brink of Chapter 11? Shouldn't these guys be fired instead?"
Another example of this is Pacific Gas & Electric, the utility company for northern and central California. (It is my utility company.) They are currently in Chapter 11 and paid almost $60 million in bonuses to managers and other non-union employees last month (details here).
Daniel makes a good point at the end of his article I hadn't thought of:
The most troubling aspect of the retention bonuses is psychological rather than financial. American's executives presume that unionized pilots, flight attendants, and baggage handlers will work with the same attention to detail and concern for security as they did when their wages and benefits were 25 percent higher. But the unspoken assumption of retention bonuses and benefits for top bosses is that senior managers simply can't be relied upon to work as hard if their salaries are cut, or if their options are underwater. Isn't it time we stopped applying the soft bigotry of low expectations to senior executives?
Yes, we should stop having such low expectations of senior executives. It would be even better if those executives stopped setting low expectations for themselves.