A bankruptcy judge stands in the way of top MF Global executives and their bonuses. That’s right everyone, as if the MF Global situation wasn’t already backwards enough, they now want to give performance based bonuses to at least three top executives. The potential payouts were first reported by the Wall Street Journal on the Friday 3/9 edition. There was outcry from several legislators concerning the matter.
Though I do not know all the logistics or motives of the case, the bottom line is that customers of the commodities firm are missing about $1.6 billion which was improperly removed from their accounts just days before the company fell apart. While the situation as a whole still remains a mystery, this just screams inappropriate to me.
The only argument I found which warrants these bonuses goes: Well they may have other job offers on the table and we cannot lose these executives because it will make the situation worse. As the bankruptcy law goes, the employee must be essential to the business and must already have another job offer in order to receive this money. It is strictly prohibited to pay-to-stay. MF Global is flirting with yet another fine line with the law after the firm collapse. Hopefully the fed finishes their investigation on MF Global since nobody in the company seems to know what happened. Though I may be oversimplifying it, this just seems to me like another situation where big business used leverage to commit a crime. You just don’t lose $1.6 billion folks.
Should these executives get the bonuses even if MF doesn’t prove that it is absolutely necessary to retain them?
Bonus question: Does former CEO Jon Corzine know where the money is even though he denied (Mark McGuire’d) it’s whereabouts completely?