If you're barely getting by right now paying for health insurance, your mortgage, and other bills with your weekly unemployment insurance, the prospect of AIG execs pocketing $165 million of our money in bonuses probably doesn't sit so well. And it shouldn't. If you're like many, you've probably selected to have 10% of your unemployment insurance withheld for federal taxes, taxes that will help pay for the economic bailout of companies like AIG.
In a time when individuals and multinational corporations alike must scale back expenses, reconsider their bottom lines, and reassess spending habits, bonuses of this nature seem beyond indulgent or excessive, they seem almost criminal. Of course, AIG is contractually bound to fulfill certain obligations to its employees, but in a time where they received an almost unprecedented government bailout, AIG could have done much more to massage its public relations by requesting employees to forego bonuses in light of the current economic conditions. So far, AIG employees have given back at least $50 million. It's a start, but I'm still wondering why AIG didn't address this issue before bonuses were paid and had to be returned.
On the other hand, AIG employees who were entitled to these bonuses have been let down by their company and could have had legal action against AIG had the bonuses not been paid. Instead, AIG paid the bonuses and forced their employees into the awkward position of voluntarily returning them or looking like prize idiots. Highly unfair and also potentially depriving their employees of any legal action against the company.
All in all, the situation has been handled rather poorly, demonstrating AIG's use in quite poor taste of public funds and inability to come through on its obligations to its employees.
More information available at:
http://www.nytimes.com/2009/03/24/business/24bonus.html?_r=1&hp
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