Bonus Boom or Bonus Bust?

Wall Street bonuses have been captured under the media's microscope since the the recession began in earnest, and most objective perspectives have called the billions in performance-based pay superfluous remuneration.

However, in a special report on bonuses, Forbes provides two insights that are easy to miss amid the cries of condemnation--the scientific and the insider perspectives.

Big Think's Dan Ariely conducted an experiment that measured performance vis-a-vis the reward. Two groups of MIT undergrads had to complete mechanical and cognitive tasks in a set time period. Some of them were offered a $600 bonus while others were given $60. The results showed motivation and ability at odds. The mechanical tasks saw better performance by the group that was offered the $600. For the cognitive tasks, ones Ariely assumed bankers do, students offered the highest bonus suffered in performance. Ariely concluded that a larger bonus is a "double-edged sword." Although they provide incentive, the incentive creates more  stress that diminishes performance.

In another article, My Bonus was Too Small!, an anonymous Wall Streeter argues that bonuses are worth it, that the numbers speak for themselves. 

“Yes, it's hard to feel sorry for someone who makes more than $400,000 a year. But is it crazy to suggest that if I had a true, positive economic effect on my firm of $100 million dollars, that I should receive 1% of that number as compensation?” While Ariely would claim that such a bonus is detrimental to performance, the anonymous writer is not arguing efficiency, but rather, entitlement.

Despite the author’s defense of big bonuses, he concludes with a counter-point. A lack of economic incentive to join Wall Street could be beneficial in the long run. "We need our greatest math and engineering minds ensuring the United States is the leader in innovation in technology, energy and medicine. We don't need them brewing up esoteric financial instruments.”

How to vaccinate the world’s most vulnerable? Build global partnerships.

Pfizer's partnerships strengthen their ability to deliver vaccines in developing countries.

Susan Silbermann, Global President of Pfizer Vaccines, looks on as a health care worker administers a vaccine in Rwanda. Photo: Courtesy of Pfizer.
  • Community healthcare workers face many challenges in their work, including often traveling far distances to see their clients
  • Pfizer is helping to drive the UN's sustainable development goals through partnerships.
  • Pfizer partnered with AMP and the World Health Organization to develop a training program for healthcare workers.
Keep reading Show less

James Patterson on writing: Plotting, research, and first drafts

The best-selling author tells us his methods.

  • James Patterson has sold 300 million copies of his 130 books, making him one of the most successful authors alive today.
  • He talks about how some writers can overdo it by adding too much research, or worse, straying from their outline for too long.
  • James' latest book, The President is Missing, co-written with former President Bill Clinton, is out now.
Keep reading Show less

How to split the USA into two countries: Red and Blue

Progressive America would be half as big, but twice as populated as its conservative twin.

Image: Dicken Schrader
Strange Maps
  • America's two political tribes have consolidated into 'red' and 'blue' nations, with seemingly irreconcilable differences.
  • Perhaps the best way to stop the infighting is to go for a divorce and give the two nations a country each
  • Based on the UN's partition plan for Israel/Palestine, this proposal provides territorial contiguity and sea access to both 'red' and 'blue' America
Keep reading Show less

Why the White House Correspondents’ Association dinner won’t feature a comedian in 2019

It's the first time the association hasn't hired a comedian in 16 years.

(Photo by Anna Webber/Getty Images for Vulture Festival)
Culture & Religion
  • The 2018 WHCA ended in controversy after comedian Michelle Wolf made jokes some considered to be offensive.
  • The WHCA apologized for Wolf's jokes, though some journalists and many comedians backed the comedian and decried arguments in favor of limiting the types of speech permitted at the event.
  • Ron Chernow, who penned a bestselling biography of Alexander Hamilton, will speak at next year's dinner.
Keep reading Show less