Wednesday, March 18, 2009

More on Those AIG Bonuses

A quick follow up on yesterday's post about the AIG bonuses, on the day that AIG's CEO got smacked around by a House committee. Big Tent Democrat over at TalkLeft reprints an Email he received from "a person knowledgeable about the inner workings of AIG over the last decade" that explains some of the background. Anonymous makes two relevant points.

First, he argues that most of the employees at AIG, including most of those getting the bonuses, didn't have anything to do with the toxic stuff that caused the firm's collapse. That includes the CEO who was getting whipped up on the Hill today, as he just came on the job last September.

Second, these bonuses are not what most people traditionally consider "bonuses." They are not rewards for good performance. Rather, they are rewards for staying with the firm. Most important, the payments being made now are the reward for a promise made a year or two ago to hang around. In other words, it's the carrot that was dangled in front of these folks before the shit hit the fan. That puts these payments in a different light.

I'm still not sold on whether there's not something that can be done about these bonuses, but I'm starting to come around a bit.

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