Despite receiving $170 billion in federal aid and recording a staggering loss for the last quarter, insurance giant American International Group is doling out tens of million of dollars in bonuses this week to senior employees.
Not good.
In a phone call on Wednesday, Treasury Secretary Timothy F. Geithner told AIG Chairman and chief executive Edward M. Liddy that the payments were unacceptable and needed to be renegotiated, according to an administration source.
The company has since agreed to change the terms of some of these payments.
Good!
But in a letter to Geithner, Liddy wrote that the bonuses could not be cancelled altogether because the firm would risk a lawsuit for breaching employment contracts. Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees who are needed to turn the company around.
Not good. (Roll out the "retroactive immunity" template!)
Now for the punchline:
"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of the American taxpayers -- if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. treasury," Liddy wrote.
Are you sure you understand what "arbitrary" means, sir?
I'm not even sure you understand what "continued" means. Instead of having "continued" adjustments, how about we have just one: Do. Not. Pay. Any. More. Bonuses.
You. Are. Failing.
There. Are. No. Bonuses. For. Failure.
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