More questionable AIG bonus payments
Well, let's get ready for round two of bonus outrage from AIG. The company announced yesterday that it paid out a bit more in previously undisclosed performance bonuses to employees for 2008. Well, a "bit more" may be a bit of an understatement. AIG paid out $454 million in bonuses in operating units in roughly 120 countries.
These payments ranged from an average bonus of $5,403 for employees of AIG's property-casualty group to an average of $51,026 for those in asset management. Yes, these are bonuses that were paid out to employees of a company that was bailed out by the government. AIG contends that these performance bonus plans were set before the company needed the government's assistance and that these payments are separate from $1 billion in retention payments that are designed to keep employees at the company.
So, a company that my tax dollars went to help bail out paid out bonuses to employees that helped drive the company to the brink of bankruptcy. This is at a time when the market is rallying because we lost less jobs than expected? I'm not sure what sort of incentives there are at different companies, but I am currently looking into joining the asset management program at AIG. Seriously, I can go to work at AIG - possibly get a corner office where I can sit and watch the company lose money, all the while lighting my cigars with tax payers' $20 bills.
Okay, so that isn't really what is going on at AIG, but that sure is the perception that a lot of people are going to walk away with from all the different bonus-related stories they read. As I have noted in the past, perception often ends up forming the reality of people's opinions ... so this news isn't going to help investors' views of the floundering giant. The time has come for the government to step in and tell AIG that these payments have go to stop, in short order.
Seriously, who is making these decisions? We have gone through the whole, "we are legally obligated" fiasco - so that excuse won't work this time. I like how AIG assures us that these payments were agreed upon before the government bailout - but I think these are again empty excuses. I believe AIG is now becoming the company that cried "wolf!" We need the money, we need the money - now let us use that money to pay out bonuses ... even though we paid out those bonuses before we needed the money. But we need the money now, forget about the bonuses we paid - those have nothing to do with our current financial situation (kind of like a jedi mind trick).
Oh well, my outrage isn't empty, but it will get nothing done - so let me leave by providing a business idea for AIG. Check out this opportunity it could actually get you back in the good graces of some Americans, they may not look at the move as a total waste of money.