AIG gets over
Really? What kind of contract allows a bonus to anyone that puts the 18th largest publicly owned company in the world in a liquidity crisis? AIG was removed from the Dow Jones Industrial Average in September 2008, who deserves a bonus for that?
Now add these bonuses to the tab that included a million dollars in retreats and hunting trips, plus the dubious history of the company since 2005, and you have basically a big mess. It makes you wonder did the Federal Reserve do the right thing in giving AIG $170 billion to "right the ship."
Because of its niche in high-margin corporate leveraging, it is believed that if AIG went belly up, so would most of the businesses in America that depend on that high level of insurance coverage. At this point, I am willing to cut my losses. Despite the fact that the CEO and others have agreed to only receive a dollar in salary this fiscal year, the thought that anyone can be given a bonus after this financial disaster is repulsive.
It would seem that those entitled to the bonus would defer the bonus until the ship is righted. But it was greed that got us into this mess, and it seems that some habits are just too hard to break. Most folks trying to break an addiction go through a step program. Here is my two-step program for AIG: Everyone that receives a bonus gets a pink slip and cut off the money from AIG until they institute best practices that show they are really acting in good faith.
Have you ever had a cousin that was addicted to drugs and/or alcohol, but they were the best handyman in the family? Did you give some money or a six-pack of beer to fix the gutter or paint that room you did not have time to do for yourself? If you have, then you understand the relationship between the Federal Reserve and AIG.
That is what makes this so troubling. Supposedly, we need AIG, and more specifically, the people who are getting the bonuses, because they have to prop up other companies and they have the "expertise" to help us out of this financial crisis. However, you eventually have to cut your cousin off so he can do better for himself. Maybe it is time to do the same for AIG.
Until then, it seems as though AIG will get over on us again. As a shareholder, that is disappointing news.