Doesn’t the government already have a controlling share in AIG? Couldn’t it have stopped AIG giving bonuses to its executives? Either a) they should have seen it coming, or b) they could have stopped it. Which is it?
I hope not.
Without the bailout they would have zero pay.
Yes to your first two questions. C - all of the above to your last question.
Who’s pullin the strings here?
Having a controlling interest doesn’t allow one to order the return of bonuses?
'There’s a lot of chatter about bonuses paid to employees of bailed out companies. Even lots of libertarians seem to be angry about it. One troublesome aspect of many of the complaints is that you have people sitting in judgment from the outside, demanding to know why this employee “deserved” a bonus, etc. In my view, if a company for whatever reason decides it should give a bonus to an employee, then normally that’s end of story. It does not matter if the company is losing money. It does not even matter if the company is contractually obligated to pay it (though often they are). What matters is that for some reason the company thinks it’s important to pay X dollars to this guy–maybe to induce him to work hard or harder, maybe to retain him, maybe to attract other talent, maybe to develop a reputation in the market, etc. Who knows. It is entirely possible that if you don’t pay a certain amount and type of compensation to certain employees, you’ll lose out to (private) competitors who are not shackled–and then the company we gave bailout funds to has a reduced chance of prospering and surviving, and the taxpayers a reduced chance of getting their money back.
Of course, things are not normal. At this point, we can’t trust the judgment of one of these bailed out companies in deciding when a bonus is “necessary” or not. That’s the real dilemma. Not this misplaced outrage over bonuses that the outsiders don’t “feel” is “justified.”’ - Stephen Kinsella