March 16, 2009

AIG; From Bad to Criminal.

Well, AIG says that they are contractually obligated to pay bonuses to some of the executives who were running the company when it failed.

The American public is understandably upset; from our perspective, it looks like senior executives are being rewarded for failure. Frankly, I wish my own employment contract had a bonus schedule for failure, because it would take a lot of pressure off me come review time.

That may or may not be the case; we haven't seen these contracts, nor the clauses that spell out what the employee had to do to earn them.

But it's irrelevant. AIG came begging for a hand-out. And when you come begging, you must be willing to sacrifice something. The first thing AIG's management should have sacrificed were their own bonuses. The senior executives should have gone to each employee and made them understand that a company that is about to shut down cannot honor bonuses.

If they are unwilling to do that, AIG shouldn't be given a cent. Let AIG fail, and let the employees lose their jobs and their benefits. They'll have lots of company, to be sure.

There is a principle to be upheld here, and right now, AIG isn't upholding anything; it's simply a hold-up.

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