AIG Seeks Clearance For More Bonuses

$2.4 Million in Executive Payments Due Next Week



"American International Group is preparing to pay millions of dollars more in bonuses to several dozen top corporate executives after an earlier round of payments four months ago set off a national furor.

The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage.

The request puts the administration's new compensation czar on the spot by seeking his opinion about bonuses that were promised long before he took his post.

AIG doesn't actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at AIG, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government."



Give back their 180 billion payout and I dont have a problem with this at all.

This is not surprising at all. Expect the other to ask for more too. It's like making a relationship with the bank. You borrow, you repay, you borrow even more, you repay and then even more, etc.

Liz Peeps said:

This is not surprising at all. Expect the other to ask for more too. It's like making a relationship with the bank. You borrow, you repay, you borrow even more, you repay and then even more, etc.

Click to expand...

What if you default?

The Mark said:

What if you default?

Click to expand...

Are you referring to AIG?

It was my understanding that these bonuses are part of contracts signed by employees when hired, and that to deny the bonuses would open AIG to litigation. Has there been a change to whether these contracts can or where voided?

sam_w said:

It was my understanding that these bonuses are part of contracts signed by employees when hired, and that to deny the bonuses would open AIG to litigation. Has there been a change to whether these contracts can or where voided?

Click to expand...

My definition of bonus may be off but what you say there sounds like a pre scheduled salary increase.

A "bonus" is an unexpected windfall.

The Mark said:

What if you default?

Click to expand...

Well, in this scenario, you go back to the bank and ask for enough money to cover the loan you just defaulted on, and they will give it to you because, even though you have a history of using those loans to "invest" in lottery tickets and beer, you are "too big to fail." In other words, you paid the money to put the bank president where he is now back when you were still marginally solvent.

akyron said:

My definition of bonus may be off but what you say there sounds like a pre scheduled salary increase.

A "bonus" is an unexpected windfall.

Click to expand...

Obviously it depends upon what the contracts say, but my experience is that bonuses are not unexpected due to the fact that the contract sets out what the employee must do in order to earn that bonus. If that's the case, not paying the contracted bonus would result in a breach of contract lawsuit which would a) probably be more expensive than just paying the bonus, and b) probably be picked up by the taxpayer.

Of course, since AIG's income is running in the red, we're going to foot the bill for the bonuses anyway, so we get screwed either way.

The Mark said:

What if you default?

Click to expand...

You declare bankruptcy, change your coporte name, go to another bank and start all over again.