The Bogus Bonus Fallout

I spent little over an hour today watching the live congressional inquisition of AIG CEO Edward Liddy. Later in the day, I listened to some of the congressmen talk about the case and I wondered if they were watching the same testimony that I was. In particular, I kept hearing this theme of “and some of the recipients of the bonus have left the company!”

Ehhhh, yes. That is the whole point. According to Liddy’s testimony, the $165 million in question was not a performance bonus, it was a retention bonus, and what’s more, it was no ordinary retention bonus. It was a retention bonus promised to AIG employees who had been informed that once they finished tasks X, Y and Z, their jobs would go  away. The bonus was designed to incent them to complete their tasks in the face of an eventual layoff. Now quite frankly, I worked for a Fortune 500 company who had the audacity to lay people off and expect them to train their overseas replacements in the time between the layoff announcement and the actual day of separation. Needless to say, many employees by their actions (or lack thereof) gave a virtual middle-finger to the company under such circumstances and no real training of replacements occurred. Truth be told, AIG exercised an option designed to maintain employee loyalty in the midst of a wind-down. While the dollar figures involved might turn your stomach, the actual practice made complete sense.

Despite very clear testimony from Liddy, the story persists that these were somehow performance bonuses, or retention bonuses inexplicably given to departed employees. The fact is the employees no longer working for AIG who received bonuses had completed the pre-layoff tasks they had been assigned. They did their part of the bargain. Which brings me to the next part of my confusion with our legislators. It seemed that a lot of the vitriol today was aimed at the recipients of the bonuses. Now, call me a greedy bastard but if ACME Anvil Corporation offers me a $4 million bonus, I’m going to accept it gladly. The anger of Congress and the people they represent should be aimed at the AIG executives who conceived of this bonus plan and decided to implement it not the employees who were simply the beneficiaries of their company’s reckless decision, assuming you consider the decision reckless in the first place.

Don’t get me wrong. There is lots to be upset about with this situation. We don’t hesitate to tell auto companies to renege on their promises to their employees but we’re hands off when it comes to Wall Street. Clearly a troubling double standard. We’ve declared some companies (like AIG) too big to fail and as a result we reward their incredibly bad (and perhaps criminal) business judgment with bailout money.

It’s all very messy but all I ask is for us to at least get our facts right before we start identifying those who should be drawn and quartered.

Respectfully,
Rutherford

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7 thoughts on “The Bogus Bonus Fallout

  1. Lord “R”,

    How could you stomach an hour of that? I saw one 15 second clip of that CEO who had what appeared a few physical symptoms of chronic use of alcohol, blathering on and turned the TV off.

    The demagogue Barney Frank is even more of a puke. Of all people, he ought to be hiding his hand in the sand. Instead, he’s acting as some spokesman for honesty and looking out for the American taxpayer.

    Believe it or not, what AIG is doing is not terribly uncommon. I’ve sat in two board rooms as some executive’s lackey and observed how the game works. Under the guise of blatant cronyism with approval of their buddies on the board, some executive will use the buzz word “retention bonus” to situate his friends for the rest of their natural life. Sickening, isn’t it?

    Makes me mad that I spent 20 years of my own career like you did working for people I wouldn’t trust my dog with. 😡

  2. It’s true, Obama, Dodd et al literally changed the turd so that cash went to those pukes.

    But who cares, President Dice Clay is inexplicably on the boob tube serving up retard jokes to the masses. Bunch of piss coming out of one of those clown flowers, if you ask me.

    Maybe our own Emperor Commodus will don the gladiator garb and play in the Final Four?

    What’s with the incessant campaigning? Am I only the one that finds all of this a bit creepy? Dude is always on television. Yet, it’s not transparency. It’s trickery!

    This shit is weird, man.

  3. 1. Rutherford would have a point if it wasn’t for the fact that 165 million dollars of tax dollars were paid to the very people who crashed an economic piss missile into the god damn world economy via blatant fraud. I don’t care if “R” does have some deeper understanding on the nature of “retention” bonuses, that’s too much damn loot and those people are too damn evil. Read up on the the notorious Purple Gang of Detroit, they also demanded “retention” bonuses.

    2. Obama is either a sociopath or a minor league propaganda hack. Fact: He knew of the existence of the bonuses months ago. Fact: He feigned outrage when news got to the street about the magnitude of the bonuses.

    3. This thing stinks so bad that Chris Dodd (who also blatantly lied about his knowledge of the bonuses, the very bonuses he himself wrote into the bill) snake bites Obama! You can’t make this stuff up!

    4. You’re President Obama and have more egg running from your face then a hooker on an aircraft carrier. What are you going to do?

    Try out new bits on the Jay Leno show??????????

    WEIRD. I say WEIRD!!!!!

  4. When it comes to current corporate behavior, I’m just about speechless. My wife still works for the company I worked for years ago, and I’m still amazed at the crap that goes on there.

  5. DR LOL.

    Hey, you know you’ve screwed up when the liberal media turns on you! As you know, I virtually live on MSNBC and almost without exception they’re saying “Who does Obama think he is kidding?”

    I think it was Tucker Carlson the other day who said “socialism is not easy”. LOL Well, I don’t think we’re quite socialist yet but this is what happens when government (who has their own dirty games they play) gets involved with business and has to deal with their dirty shenanigans … in public no less.

    I’m not sure anyone warned Obama and Geithner that when you bailout reprobates, you then have to worry about their behavior down the line.

    Kinda makes that old phrase resonate doesn’t it? “Neither a borrower nor a lender be.”

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