The AIG Mess

No one would confuse me as a financial genius in my life. But somehow, I think I would understand the difference between "bonuses" and "compensation". This current mess at AIG is not totally surprising. After all, the media has characterized the company as greedy and selfish. Why are all of us surprised that these "bonuses" are being paid?

I do feel a bit bad for Mr. Liddy the CEO as this was all agreed to before he came on board. Imagine having taken the helm during this firestorm. Not fun! But I do feel that now that he is, he needs to find other lawyers for the company, not too mention Sr. Executives. Certainly, in the world of finance there are other "qualified" people. Because these people are unbelievable. If I understand the press correctly, this was done because they were really concerned that they would "lose their best people". Okay, reality check... you needed a $170 billion dollar federal buyot. What makes you think you have the best people?

I understand the concern about shortages of qualified people. As a Clinical Nurse Educator, I see the effects of the nursing shortage daily. But I have to say, that despite this, we as professionals are not willing to hire and maintain people unable to perform to a standard, in my neck of the woods. If we did, people could be hurt. How is the business AIG is in any different?

Now we have a very large company who the government deemed important to save. I am also upset with lawmakers for just handing out that kind of cash without further investigation as to how the company got there in the first place, and how the money would be used. Further, I think any further bailouts for any company should be accompanied with serious strings attached. Any "bonuses" should be under review in a company receiving federal aid and prevented or barred from paying if it would require federal dollars to pay. If the current laws do not support this, well, they are the lawmakers for crying out loud...write new law.

Again, I would never be confused as a burgeoning or experienced economist, but someone somewhere needs to make more sense then there is right now. I have no idea how much each individual is getting as a bonus, whether it's a few thousand or multi-millions. If I understand the press correctly, the bonuses are being paid to approximately 450 financial product division personnel. There has already been $450 million dollars in bonuses given out, $165 million additional due this past Sunday. The base salary for a lot of these folks is $270,000 according the media. Doesn't sound like anyone in this bunch can cry about being poor. As for the suggestion that if they take the bonuses they make a choice between keeping their job or not, ... well let's see... Assuming that I would be facing a choice between multiple millions vs. my $270,000 salary..I'm thinking take the bonus and get out. Apparently no one in a position to get a bonus such as this thinks more about their work than they do about their pocket, if you believe the press.

I say, start fresh. Do what we can to stop the bonuses, for those that we can't stop, review performance and fire as needed. Find new blood and get it in there. Change the paradigm of the company to include a different management philosophy that includes accountability, altruism, and sound financial decision-making, and rewards based on that, not on the fear of losing "good" people, and actually find good people!