Do AIG Bonus Recipients Have No Sense?
| 3/18/2009 | Posted by Patti under World News, World Politics |
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.
Someone, or several knew the reaction these bonuses were going to get or the government would have known about the pending payment weeks ago, not just a week or so ago. Who knew and why were they not required to fully inform the government who is pretty much a majority stock holder with their huge bailout packout?
Then the questions go to those receiving the funds. Just because the company is making the funds available doesn’t mean that the recipient doesn’t have a moral obligation to decline receipt of the bonus. Something that slipped by most people’s radar here in Canada is that the heads of our major banks all declined to accept their bonuses this year.
Canadian banks have not received a government bailout and unlike most other systems around the world, they remain profitable. They would have had justification in taking their bonuses but had the good sense to decline to do so.
AIG employees, on the other hand, have taken part in the decline of their company to the point that the government had to step in or watch a large part of the financial system unravel. They shouldn’t need to have the bonuses taken away, they shouldn’t be taking them in the first place.
Bonuses were always supposed to be for being part of generating good returns. When did they become reward for bad returns?
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As in this country Barb, when blockbuster bills get rushed into law, the results often take situations like these to highlight just how bad they were. If the Republicans had done their due diligence, the clauses claimed to have been inserted would have been caught. Our Official Opposition has been lax in the passing of the current budget bill and the crap is going to hit the fan at some point.
I have never been a fan of George Bush and while I like Obama, as a Canadian, I'm neutral in regards to American political parties. I generally have learned to correctly identify irresponsible behaviour when I see it and the AIG bonuses and those receiving them are irresponsible.
If you thought it couldn’t get any worse than Bush. The dems are spending more and making grossly incompetent mistakes. Here is the latest (quite shocking) of their trillion dollar blunders:
Cap Schmap:
http://www.butasforme.com/2009/03/17/obamas-stimu…
Check out this cartoon about AIG!
http://pastexpiry.blogspot.com/2009/03/cartoon-ai…
*CARTOON*