Friday, May 1, 2009

Deceased CFO Gets Bonus

So, while current dominating headlines dwell on Miss California's outspoken stance against same-sex marriage (and her recent appearance in an anti-gay marriage ad), and the evolving (though simultaneously devolving) circus that is American Idol, most news outlets, or those who maintain total impartiality, have been focusing on the outrage of Freddie Mac. Yes, it's true they are the latest company to encounter the contractual obligations to pay bonuses to top executives and then experience the debacle afterward, but only the above-stated few have mentioned that a nearly $1 million bonus has been paid to the estate of David Kellermann, the former CFO who apparently committed suicide recently.

I understand contractual obligations, but are contracts really so unbreakable that they still require a deceased person to be paid a bonus for work completed up to and including the day previous to the bonus being processed and paid. That seems a, you know.

It's an issue the liberal news media has pounced upon, while the conservative stations have strayed away from the story for fears of backlash and outrage akin to the AIG bonuses. After all, Freddie Mac was one of the first to receive a bailout, and a large and comprehensive one at that, so the question arises first if a bonus was due (though Mr. Kellermann was appointed to clean up the mess, so I'll side with the group that says he should receive a bonus of some sort), but the second and more glaring issue is whether the bonus should have stopped being paid upon his death.

The way out: if there is a clause in the contract stating such payment will be forwarded to his estate, family, widow, etc., in the event of his death and/or incarceration, which I believe is going to happen with many other executives in the future as we work our collective way out of The Great Recession.

I hate to be bringing up the issue or harping on anything focusing upon a very publicized suicide, but it seems there are just too many questions to ignore the problems inherent in the decisions to pay the bonuses.

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