I’ll just give you my opinion as I don’t think there is a black or white answer to this question, but what got me thinking is the recent decision by Honda to let go of its much praised Formula racing team.

It was purchased by the world’s second richest man, Carlos Slim. On the surface, this is what it looks like to me. Owning a sports team is a lot more a hobby than anything else. Honda has said it would save over $300 millions. Now sure, winning had the potential of perhaps brand enhancement and maybe indirect sales but $300 millions? Was it perhaps nothing more than a little toy?

How about baseball teams like the New York Yankees or the Montreal Canadiens? In good years, they are able to bring in a profit of course. But they also have tougher times and it seems difficult to imagine that the reason they are in the business is to make money. Pro teams often are more about the passion of a specific owner than anything else. Does it just so happen that once an owner makes so much money in a business, he is ready to enter a business for the simple reason of having an extra adrenaline knowing that his team is playing for the highest awards possible?

Some of the most famous teams are currently for sale as their owners struggle with the finances. The Chicago Cubs, perhaps one of the 5 most famous sports teams has been for sale for a few months now but has not received any serious offers. If it was a wise business decision, you’d think that even in the current environment there would be some good offers.

Of course, there have been some great stories as well. The NY Yankees for example were purchased by George Steinbrenner for $10 millions in 1973 but are now worth $1 billion according to Forbes magazine, a brilliant investment no matter by what measure.

What is your opinion about all of this?

Wow, talk about different times. Only a few months ago, employees in the financial world and elsewhere were mostly planning what would happen to their 2008 bonus. When they were created, bonus and other incentives were created in order to benefit shareholders. How? Simply by creating extra motivation for employees to generate more profit which would in the end get extra return for the shareholders.

But somewhere along the way, things got lost, especially in such sectors as financials. In some ways, it became less about the performance and more about simply doing the job. And it also became more of an added salary than about anything related to performance. At some point, a bonus became something related to the number of years of experience and something that employees expected and even included in their budget.

That drew things way further than anyone could have imagined giving managers no reason to use caution in their decisions and no reason really to look into the interests of the shareholders. The problem was that it became such an exageration that the system eventually collapsed with banks and other firms taking on too much risk to be able to sustain any downturn of their assets. Say what you want about the actual crisis, about how it is unique and was unpredictable. But you would the best firms in the business to be able to sustain such a crisis, no matter how unique it was. Were the bonuses the cause of it all? No, they certainly were not. But looking into them gives you a good idea of the unique culture that existed on Wall Street and in many other sectors.

A bonus should be given according to performance of course. But it should also be given with the interest of shareholders in mind. Credit Suisse had a creative way of getting it done as it has decided to pay the bonus this year by giving out portions of the illiquid assets to its employees, using about $5 billions to do so. In order to profit from them, employees will have to remain there for a long time and this will also help Credit Suisse in its task of deleveraging. Seems like a win-win right? I think it’s creative and certainly an interesting way to get it done.

Other companies such as Google are getting smashed for lowering their bonus. Sure, employees went from getting about 1000$ on average (although other reports say some employees received up to 20-30K) to getting a mobile phone this year. But with the stock going down so much, isn’t it normal that shareholders AND employees share the downfall? I just think a bonus should be a reward for performance, of the employee and of the company, not something to take for granted as was too often the case in recent years…