I’ve been watching the furor which has erupted over the payment of bonuses to employees at AIG in the US.  Edward Liddy, the man appointed by the government to oversee AIG, claims the bonuses need to be paid out as they are a debt owed by the company. Liddy is not one of those receiving funds, he receives $1 annually, so this is not about his pocketbook.

From what I have read, the agreement to pay these bonuses was made early in 2008 which preceeded the stock market meltdown. I rather doubt the agreement preceeded any awareness at all on  AIGs part that the company was in financial trouble. Seems to me some pretty hard questions need to be asked about just who had the authority to agree to allow such a huge amount of money to be paid out.

Logic says that is should have been someone pretty high up in the company and should have been aware of the financial situation. The reality is, the current financial crisis wasn’t totally a shot from the blue. The depth and seriousness of it has been a bit of a shock but the fact that something was pending is not. I’ve been seeing signs of what was coming for the last 2-3 years and I’m not involved in a high finance industry. Read the rest of this entry »