The shakeup in the financial world has occasioned at least a few linguistic effects among the broader fiscal ones. We now have the unlovely acronym TARP (Troubled Assets Relief Program), a new sense for the word haircut (a sudden reduction in the value of an asset), the revival of the 1930s word bankster (a combination of "banker" and "gangster"), and, for comic relief, earnest explanations of the word commode, which, when it costs $35,115, stands on legs, and is found in the office of John Thain, the former CEO of Merrill Lynch, is not a toilet, but a decorative French 18th-century chest of drawers. (Somehow, it would have been better if it had been a toilet.)
But perhaps the biggest linguistic effect the current crisis has had is the damage it's caused to the word bonus, and the attention it has drawn to the vocabulary of executive compensation in general.
The word bonus probably started its life in English as stock-exchange slang, used in London in the 18th century, where it sometimes meant "bribe," in addition to its modern meaning. It comes from a Latin word meaning "a good thing." And a bonus used to be a good thing - something extra in your paycheck, a reward for a job well done. But recent events in the financial world have tinged the word with a hint of wrongdoing. To listen to the breathless speechifying on the subject, both in Congress and the talk shows, you'd think accepting a bonus were somehow shady, or even villainous.
How did this happen? The word itself did nothing wrong - but those using it haven't been using it wisely. It didn't help for taxpayers to see that major financial institutions continued to pay massive bonuses to executives despite losing even more massive amounts of money. Last year Merrill Lynch essentially collapsed, but still paid almost 700 executives cash bonuses of more than $1 million each. President Obama called the bonus payouts at banks receiving federal bailouts "shameful" earlier this month, and Congress jumped on the bad-bonus bandwagon by limiting bonuses for executives at any financial institution receiving government funds.
English is littered with examples of words whose meanings were once positive - or at least neutral - which have turned negative through popular use. The process even has a name, "pejoration" (from a Latin word meaning "make worse"). Grumble, for instance, used to be synonymous with mumble, without a hint of discontentedness. A wench was once any girl; an idiot was at one time just an uneducated person, not one who couldn't be educated; and if you called someone sly, you meant they were skilled and clever. (It happens with names, too: Mickey Mouse is both a beloved cartoon character and a way to call something trifling or small-time.) It's too early to tell if this will happen to bonus, but it's certainly possible.
The bonus is not the only executive-compensation culprit being sneered at. Congress has also moved to limit another executive perk: the golden parachute, any large payment made to a departing executive. New regulations should also bury what is called the golden coffin, where lavish benefits continue to be paid out even after the executive dies.
Unscrupulous executives may also engage in vest fleecing, where they accelerate the vesting of their stock options; or they may get their companies to agree to imputed years of service, where their 10 or 15 years of employment are counted as 25 or even 40 years to bump up their pension payouts. Those payouts are already higher than those of the rank-and-file employees, due to SERPs (Supplemental Executive Retirement Plans). These plans are sometimes colloquially called top-hat plans - picture the guy on the Monopoly box.
And just in case you took some consolation in the huge tax bite those executives face - well, think again. Some executives are offered what is called a gross-up, where tax payments are made by the company (and thus borne by the shareholders) on behalf of those high-paid executives.
If the crisis has revealed the jargon of how these financiers are paid, it's also bringing up some terms for reforming the system. In the UK, there has been talk of clawbacks, where banks would take back bonus payments paid to employees in previous years to make up for losses in the current year. Some banks are looking at what's being called bonus banking, where parts of executives' annual bonuses are withheld over three years, and adjusted based on long-term results, to discourage them from ramping up their bonuses by taking short-term risks. Swiss bank UBS, which adopted such a system in November, calls it a bonus-malus system, with "malus" being the opposite of "bonus." Malus, of course, is from the Latin meaning "a bad thing" - but has something of a positive connotation in this context, a tool to fix the system.
If bonus continues to have such unpleasant associations, we may have to look for a replacement - just as those bankers will surely be looking for workarounds to evade their compensation caps. Emolument sounds too much like a part of the fat-cat culture that's currently under attack, and honorarium has a longstanding connotation of a token amount of money - which might help it, given the millions those bankers were hauling in. It might be time to revive the almost-unknown plussage, which, as luck would have it, means just about the same as bonus, only without all the baggage.
Erin McKean is a lexicographer working on a new online dictionary. She blogs at www.dictionaryevangelist.com. Jan Freeman will return in March.
