AIG Bonuses - An Outrage or Diversion?
So AIG has decided to pay its employees retention bonuses of a total of $165 million to stay on through the dissolution of the company. Everybody in Congress is feigning anger about "wasting taxpayer dollars." I have no idea if the retention bonuses were necessary to retain employees, but I suspect they were.
AIG has over 100,000 employees, so the average employee gets an additional $1,500 to keep them on through the winding up and sale of the businesses, which could take months to years. The government has already pumped over 1,000 times that amount into AIG to save the company from defaulting on its counterparty obligations and help give it additional time to seek buyers for its businesses. The worst thing that could happen at this point in time is for many of the key employees to walk away, in which case the taxpayers will lose a heck of a lot more than $165 million. The best thing that could happen is that AIG can retain employees, sell businesses in an orderly fashion, and then repay the money (or a large portion of it) that was loaned to it by the government.
I have no interest in seeing AIG employees receive more compensation than is required, but frankly as a taxpayer, I would always rather see a company's management team run its business than the government. If the government is really interested in saving money, it should probably go back to the $800 billion spending bill that was just passed. Even in a worst case scenario, the $165 million retention bonuses probably have at least as much of an effect as the money spent in the "stimulus" bill by putting dollars into consumers' pockets. Isn't that what the government wanted in the first place?
*Update*
The WSJ says that the real outrage is the government's cover-up of who actually received the counterparty money - European banks received $20 billion. Don't we already pay enough for Europe's defense and prescription drug bill?
AIG has over 100,000 employees, so the average employee gets an additional $1,500 to keep them on through the winding up and sale of the businesses, which could take months to years. The government has already pumped over 1,000 times that amount into AIG to save the company from defaulting on its counterparty obligations and help give it additional time to seek buyers for its businesses. The worst thing that could happen at this point in time is for many of the key employees to walk away, in which case the taxpayers will lose a heck of a lot more than $165 million. The best thing that could happen is that AIG can retain employees, sell businesses in an orderly fashion, and then repay the money (or a large portion of it) that was loaned to it by the government.
I have no interest in seeing AIG employees receive more compensation than is required, but frankly as a taxpayer, I would always rather see a company's management team run its business than the government. If the government is really interested in saving money, it should probably go back to the $800 billion spending bill that was just passed. Even in a worst case scenario, the $165 million retention bonuses probably have at least as much of an effect as the money spent in the "stimulus" bill by putting dollars into consumers' pockets. Isn't that what the government wanted in the first place?
*Update*
The WSJ says that the real outrage is the government's cover-up of who actually received the counterparty money - European banks received $20 billion. Don't we already pay enough for Europe's defense and prescription drug bill?
posted by Richie Rich | 8:12 AM
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