In The Crosshairs

by Dan Ward

Many of the top earners at AIG have now announced that they will decline bonuses that have put the company in the crosshairs of nearly every politician and every news outlet in the country for the past two weeks.

It seems like everyone has weighed in at this point about whether the bonuses were legal, whether they should be taxed, who knew what and when … so let’s not re-hash that discussion. Instead, let’s consider the lesson here for public relations practitioners.

An important part of our job is to look over the horizon and anticipate public reaction to actions our companies and clients might take. Given the increasing populism in our country, and vocal calls for reform on executive compensation, it should have come as no surprise that there would be public backlash about bonuses of more than $165 million. But it seems as though corporate leaders were unprepared for the ferocity of that backlash.

I’m not suggesting there were many options … keep the bonuses, decline them or renegotiate them, but regardless of which path is chosen, anticipate that there will be a public reaction and have a plan in place for how to communicate the decision.

Had executives chosen to renegotiate employment contracts as part of the bailout talks, public perception would likely be far different today. But even if leaders had decided from the beginning to keep the bonuses, they should have been better prepared to deal with the backlash … proactively educating investors, legislators and others about the company’s employment agreements, sharing how and when the bonuses were earned, etc.

Instead, we see a CEO with a salary of one dollar being vilified as the embodiment of corporate greed, and employees declining huge sums that are contractually owed to them who will continue to be targets of scorn instead of praise.

As public relations practitioners, we need to constantly gauge public perception not only of our companies and clients, but also of issues and trends that may impact them. Anticipating how our actions might be perceived and preparing a plan of action is more important now than ever.

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