AIG, Bonuses and Bankruptcy
James Gattuso /
Bonuses for AIG employees? News this weekend that troubled insurer AIG, after receiving over $170 billion in taxpayer funds to prop itself up, is planning to pay some $1.2 billion in bonuses and retention payments met with general outrage from the average man in the street to the man in the White House. Now comes word that President Obama has called on Treasury Secretary Timothy Geithner to pursue “every legal avenue” to block the payments.
That may be easier said than done. Like most other issues in the massive Gordian mess of the financial world, this problem is not as simple as it seems. Despite the focus on high-flying executives, most of the recipients seem to have been mid-level employees. And some apparently were folks who were brought in to help clean up the Augean residue within AIG, exactly the sort of folks you’d want to compensate.
That doesn’t explain all the bonuses however. Seven individuals reportedly received more than $3 million. (more…)