AIG managers may skip bonuses and keep their jobs
Jul 22nd 2009 8:15PM
Updated Dec 4th 2009 6:43PM
There has been a good deal of controversy over the original plan for AIG (AIG) to pay some of its "key" employees and managers $245 million in bonuses. The federal government, which owns 80 percent of the insurance holding company, has been under pressure from Congress and the public to hold off giving AIG workers anything beyond their salaries while the firm is still indebted to taxpayers.
According to Dow Jones, a very small portion of the bonuses in question has been withheld and AIG is negotiating with employees who are due to get the $245 million in question.
AIG's argument is that the money to be paid out is part of a program to keep people who are critical to the firm's future. In some cases, AIG may even have a legal obligation to make payments previously promised. Some members of Congress are adamant that they do not care what earlier relationships AIG and its workers may have had. The taxpayer's interests come first.
The government has almost all of the leverage in the talks. AIG workers may stand on their legal rights to the bonus payments. Fighting the matter through the court system would be long and expensive for the individuals in question. And, the government is not likely to give them a very good letter of recommendation for their next jobs, if any of the workers can find one.
Douglas A. McIntyre is an editor at 24/7 Wall St.