Correct me if I’m wrong but aren’t bonuses tied to performance? When your company experiences such massive losses that it needs huge government infusions to keep operating, explain to me how a bonus is justified. Explain why they’re contractually obligated when the business has performed so poorly. It doesn’t make any sense.
The government (aka American taxpayers) now owns 80% of AIG. Uhm, that seems like a controlling share to me. I don’t think liability for not paying these bonuses is going to be an issue. An executive would have to be brave to sue in the current economic climate and with negative public opinion. Although I do understand the argument that these bonuses help retain talent. Talent that has lost the company billions and billions of dollars. Yep.
I think this is a farce. I think it’s a public ploy to reduce public backlash against the administration but nothing real will result from it and the AIG bonuses will get paid out. Yes, I’m capable of criticizing the Obama administration. Call me cynical, but I’d be surprised if they actually block the bonuses.
I know AIG has different divisions but bonuses should not be paid out to the executives of any division that wasn’t profitable. Plain and simple. Why should bonuses be paid to executives overseeing divisions handling derivatives? They’re contractually obligated to reward incompetence, is that it? Even if someone’s intelligent and well-qualified, I put failure due to greed, recklessness, and/or ignorance in the same category as incompetence.