Categorized | the roundup

The Biz Roundup March 20

The SBA gets serious about helping out small business, but not to pay off loans to the SBA.

The Small Business Administration is still drawing up guidelines for its forthcoming emergency loans program, a stopgap measure intended to shore up small businesses struggling to keep up with payments on existing debt. But the agency this week confirmed an unexpected twist: Businesses with current loans backed by the SBA won’t be able to use the new loans to cover payments on their existing SBA debt. . . .

“Private loans made for any legitimate business purpose — including credit card debts, bank loans and real-estate loans — would be eligible for the program,” the House Committee staffer said. “The Committee is also pushing the SBA to work with borrowers on loan modification and forbearance to provide relief to small business borrowers who have SBA-backed loans.”

(“Emergency biz loans: What qualifies,” CNN Money, March 20) If you’re not following this story with every heartbeat, you’re either a) working for a huge company or b) not working. The true measure of this downturn lies in its effect on small business and their employees, so while we’re throwing billion dollar footballs at Wall Street and Detroit, we’re forgetting that “small” business is too big to fail, too.


With talent like this, who needs enemas?

Senior executives on both sides of the Atlantic on Friday warned of an exodus of talent from some of the biggest names in US finance, saying the “anti-American” measures smacked of “a McCarthy witch-hunt” that would send the country “back to the stone age”. . . .

Vikram Pandit, Citigroup’s chief executive, told employees in a memo that some anger about executive compensation was “warranted”. But he hit out against the idea of a special tax. “The work we have all done to try to stabilise the financial system and to get this economy moving again would be significantly set back if we lose our talented people because Congress imposes a special tax on financial services employees,” he wrote.

Some policymakers expressed concern that banks may try to break out of the government’s embrace by paying back public capital even if the price is a more severe credit squeeze. They also fear that financial institutions may decide not to take part in public-private partnerships to finance credit markets and acquire toxic assets.

(“Banker fury over tax ‘witch-hunt’,” Financial Times, March 20) Of course, the problem is that the compensation system is all out of whack with reality. The AIG uproar is about more than taxpayer money being used to fund huge bonuses; the very idea of paying bonuses to activities that for all practical purposes bankrupted AIG doesn’t make sense. Something is seriously wrong with the bonus world when “talented” people are technically entitled to bonuses when they’ve sunk the entire ship. Perhaps the financial world needs a few more mediocre people who understand the big picture and overall profitability of a company versus the truly talented folks who race over the cliff with blinders full-on.


You see, just in case you though the AIG bonuses were as far as you can go in Stupidland, the ultimate border, the Stupid Ends Here sign, there’s Vikram Pandit off on the horizon smiling and waving.

Under Citi’s proposed compensation plan, three of the company’s top five executives would be paid a total of nearly $12.5 million in cash bonuses over the next five years. One of the executives, James Forese, is a co-head of Citi’s Institutional Client Group, which lost $20 billion in 2008. Forese is rewarded $5 million under the plan. At least 15 other Citi executives are in line for multimillion-dollar payouts. Citi declined to say how much in total it has promised under the plan.

According to a proxy statement Citi filed with the Securities and Exchange Commission, the company finalized its bonus plan on Jan. 14. Twelve days later an amendment barring such payments was inserted by the House of Representatives into the $787 billion fiscal stimulus bill, which went into effect on Feb. 17.

(“Citigroup Plans Big Bonuses Despite Rules Against Them,” Time, March 20) Just scroll up a few inches to see Vikram Pandit’s jeremiad about how big banks like Citi are going to lose their most talented people. Well, I don’t know what business playbook ol’ Vik is reading, but in my book, losing $20 billion in a year — yeah, I know, even in a recession year — does not technically qualify a person as “talented,” let alone, “most talented.” In Vikrampanditland, you see, only people who are totally tone-deaf and rattled with laryngitis would every win American Idol.

Be Sociable, Share!

Leave a Reply

Shoestring Book Reviews

Shoestring Venture Reviews
Richard Hooker on Jim Blasingame

Shoestring Fans and Followers


Categories

Archives

Business Book: How to Start a Business

Shoestring Book

Shoestring Venture in iTunes Store

Shoestring Venture - Steve Monas & Richard Hooker

Shoestring Kindle Version # 1 for e-Commerce, # 1 for Small Business, # 1 for Startup 99 cents

Business Book – Shoestring Venture: The Startup Bible

Shoestring Book Reviews

Shoestring Venture Reviews

Invesp landing page optimization
Powered By Invesp
Wikio - Top Blogs - Business