Amazingly, A.I.G. is planning to pay $100 Million in bonuses after huge bailout. That’s correct: bonuses. Bonuses, as in: you did a good job, here’s a bonus. And why? According to the chairman of A.I.G.:
“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury…”
First, it shouldn’t be arbitrary at all. They should get no bonuses. None. Nothing arbitrary about that.
Second, on the issue of retention, I would ask the chairman: where are they going to go? Has he checked the industry lately? There are lots of people in the banking industry unemployed now. They would likely to be happy to settle with a salary.