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Saturday, July 11, 2009

AIG Bonus Scandal Continues

American International Group, Inc.Image via Wikipedia

From The Hoss's Mouth

AIG has asked Kenneth Feinberg, the Obama administration's pay czar, to review a scheduled performance bonus payment of $2.4 million to 43 of its top-ranking executives. Money Magazine Hoss clearly recalls the public outrage that occurred in March when $165 million in retention bonuses was paid to top executives.

It is not clear that Feinberg, the person tasked by the Obama administration, with reviewing bonuses and retirement packages for the 100 highest paid executives at AIG, Citigroup, Bank of America, General Motors, GMAC Financial Services, Chrysler, and the defunct Chrysler Financial, has the authority to halt these bonuses. Some believe his mandate is only for current and future payments, not those delayed from 2008 (as these payments are) and therefore not only has no obligation to offer his opinion, but also no authority in the matter.

This would leave the decision up to AIG, and any resulting uproar would be laid squarely where it belongs: in the lap of AIG.

Money Magazine Hoss is of the opinion that if AIG executives would spend as much effort towards making AIG a viable company as they do in obtaining their retention bonuses, the tax payers may then have some hope in recouping the loans they made to AIG.

This smoke screen by AIG will not work. When honest hard working people are losing their jobs and life savings in increasing numbers there is no place for retention bonuses for already high paid executives. If these executives are that great, let them seek employment elsewhere. After all , it is these very same executives who caused the AIG financial catastrophe.

Stay on Track,

Money Magazine Hoss

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