Looks like the same folks who drove AIG into the ground are going to receive nice big bonuses for all their good work:
The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year.
When news of the generous bonuses broke, Treasury Secretary Timothy F. Geithner is reported to have told AIG the bonuses were unacceptable and demanded they be renegotiated, but the bonuses will go forward because lawyers for AIG said the firm was contractually obligated to pay them. The bonuses range from as little as $1,000 to as much as $6.5 million and are being handed out to employees in the financial products unit of AIG, the same unit that sold hundreds of billions of dollars’ worth of credit-default swaps that nearly toppled the entire company last fall.
While it’s been mentioned that the government – and taxpayers – will recoup the costs of these huge bonuses when all is said and done, I’m not holding my breath.
There is a certain amount of dichotomy that exists when it is high profile corporate handouts. Whatd the difference between a corporate officer handing out bonus payments to keep some high level managers around than a govenor handing out 6 fugure jobs with lifetime benefits to in-laws, family and friends?
“Whatd the difference between a corporate officer handing out bonus payments to keep some high level managers around than a govenor handing out 6 fugure jobs with lifetime benefits to in-laws, family and friends?”
The difference is that these bonuses are in fact incentive compensation, likely outlined in signed contracts making the company legally bound to pay them.
Should the company attempt to break or otherwise modify the contract? Perhaps.
But these are not bonuses in the Websters sort of way. They are more like contractural contracts.