Op-Ed: AIG to pay $165 million in bonuses after $170 billion bailout

One of America’s leading corporate basket cases, AIG Insurance, has defended its intended payment of bonuses to its executives, citing contractual obligations. The Obama administration is said to be furious, and to have demanded a reduction.

Payments will include bonuses to the executive of AIG’s financial products business division, which almost caused the crash of the world’s largest insurer. The New York Times

The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.

The gravy train, apparently, rolls on. The fact that these bonuses are deemed payable even in circumstances which produced massive losses has yet to be remarked upon. Some questions: 1. What are these people being paid bonuses for, trashing the American economy? 2. Under what contractual arrangements are payments of bonuses compulsory? 3. What kind of mindless majority shareholders could possibly have agreed to contractual payments of this kind? Any corporate contractor having the vestiges of the equivalent of the intelligence of a roadkill, should be able to cite contractual obligations for performance in relation to any payment of bonuses. If used car salesmen have sales performance targets, why not millionaire executives? If there’s no performance clauses in the contracts, why not? Unless AIG is a branch of some previously unknown Wall Street charity, finding a good reason for contractual arrangements of this kind isn’t easy. That subject might be worth sending to somebody like the IRS for a nice stroll under the microscope. Meanwhile, the other bandwagon, the quasi sentient “What’s an economy, Ma? Dunno, Pa, but I don’t like it,” anti bailout dung cart, is likely to profit from the inevitable outrage this payout will cause. It’s ironic that so many people are outraged about large cash payments to their campaign donor demographic. But in this meltdown, nobody, apparently, is responsible for anything, particularly consistency in their own political positions. There’s an easy way to kill these payouts: Enabling legislation, under the TARP umbrella. No contract can operate in breach of law. It’d be interesting to see who voted against stopping these bonuses, wouldn’t it?