In the 4th quarter of last year AIG posted a record loss of $62 billion. The company is a global behemoth with more than 70 million policies in roughly 130 countries around the world.
AIG was one of the first firms that received early bailout money. By most accounts it was deemed as a company that had to be saved. Recently, AIG’s Chairman & CEO, Edward Liddy had the audacity to decide that it was imperative that the company award bonuses.
Many of the employees we are talking about earn six and seven figure salaries. To bonus employees for having a $62 billion dollar quarterly loss is a ludicrous act that should be reversed. In a letter to Treasury Secretary Timothy Geithner, Liddy described the bonuses as “retention payments” and further positioned that the bonuses would be 30% less than what he would like to give.
To add insult to the intelligence of any rational being with a scintilla of common sense, Liddy explains that members of the AIG unit largely responsible for the company’s demise due to their engagement of risky credit default swaps would have new limitations placed on their incomes. Further, the unit’s 25 highest paid employees will take $1 compensation plans for 2009 and all other officers will reduce their salaries by 10 percent.
If it were you or me, our thought processes would probablygo something like this. So let me get this straight. I belong to the unit that brought the Goliath of an industry to it’s knees. I get to receive this fat bonus today in addition to my already high salary for my failures in 2008. The down side is that I must agree to a $1 salary for 2009 but I get mostly all of the perks and benefits I have been accustomed to. I still get to keep my corner office too. I’ll take it.
Give me a break. Hey Mr. Geithner and President Obama, please don’t fall asleep at the wheel and continue to leave a blank checkbook in the hands of individuals like Edward Liddy. The majority of the American public supports the administration’s efforts and realizes that it inherited a hot mess. But hear me loud and clear, we are a fairly intelligent people. The public is smart enough to know when something doesn’t feel right. What AIG is being allowed to do stinks.
If you are reading this post and you do any business with AIG, cancel it. If the product is an insurance product, I bet you you are paying higher fees and commissions for the logo on your paperwork. If the product is an investment, I bet you are paying excessive administrative, 12b-1 fees, and a premium on commissions. Please, don’t take my word for it take the the word of AIG’s CEO. Your premiums in addition to your tax dollars are paying for the bonuses of people that have failed miserably.
While we may not be able to direct our tax dollars towards our own personal interests, we can surely choose what companies we do business with. Are you still paying for bonuses through your premiums and investments with AIG? If you feel good about the bonuses that these highly paid employees are about to receive you should do nothing. If you think it is wrong let them know about. One way they hear you loudly, clearly and immediately is when you stop doing business with them.
Unfortunatley, I’ve got work to do. My company was down modestly last year. Last week they explained that unfortunatley, there would be no profit sharing checks this year but that they would continue to match 401(k) contributions dollar for dollar up to 4%. For a second I pondered what it would be like to work at AIG or any of those Wall Street firms in trouble at their own hands but still awarding. Just imagine.
Popularity: unranked
Be The First To Comment
Related Post
Please Leave Your Comments Below