JP Morgan's New Jets On HOLD

As I have now read over 10 or so blogs about the AIG bonuses and I thought that I would throw in my two cents as well. Even though there are numerous arguments that I have read now concerning both sides of the story, whether it was contractual agreements that forced bonuses to be payed out or whether it was filthy, greedy wall-street executives that are trying to milk every last cent of the taxpayers' money. Everyone is outraged! Even to that point where employees of AIG are being threatened and the CEO of AIG, Liddy is refusing to give out the names of the employees (watch the details).

I feel that what this big mess basically comes down to proper management and social/moral responsibility. I found an interesting article in the New York Times, titled: "JPMorgan to repay TARP money before buying jets". JPMorgan had planned on buying two new Gulfstream 650 airplanes and renovating their hangar to house these new planes at a cost of $138 million. In light of recent events JPMorgan had decided to put these purchases on hold and to concentrate on repaying $25 billion that they had received from TIPS (Troubled Asset Relief Program). Similarly CitiGroup had also put their plane orders on hold. Even though the CEO of JPMorgan considers these expenses as "the cost of doing business" projects like renovating a plane hangar with "quarry tile" are still very fancy, luxurious and unnecessary expenses.
At least JPMorgan had done (which I would consider) as the right thing to do by deferring these unneccesarry expenses, both from a management stand point and a moral stand point. Anyone could easily compare this situation to their personal finances; you can spend your paycheck on your bills and credit card debt or you can just ignore your important expenses and go on big shopping spree and blow your entire paycheck.

In conclusion, AIG should have done the same. Re-write employee contracts and sort out bad management and concentrate and getting the company back on its feet, rather than spending money that is not theirs on lavish bonuses.