Blogs & Comment

AIG bonus gang should keep the cash

OK, here is the deal. I am like a lot of people who don’t take home millions, although I once thought I was gonna be the next Jeff Skoll thanks to stock options that I (supposedly) had as City of London venture capitalist back when Whoopi Goldberg was pushing And as a wage slave, I immediately applauded American politicians for threatening to tax the heck out of bonuses handed out to the financial wizards at AIG.
But now, I actually respect the back peddling at the White House, where economic advisers acknowledged on March 22 that using tax law to get back US$165 million in AIG bonuses may be “a dangerous way to go.”
The guys and gals in question clearly didn’t do what average folks are expected to do for extra pay. That’s why, when I first heard the news, I wondered why U.S. tax authorities were targeting just 90%, which still puts US$400,000 into the hands of AIG executives slated to get a US$4-million reward. Pretty good for a job not so well done.
But then Barney Frank, the Massachusetts Democrat in charge of the powerful banking committee, said the tax might not be enough. He suggested suing AIG employees, noting the American government has an 80% stake that should be used “to assert our rights.” That’s when I asked myself how I’d feel working for a company with unhappy shareholders who decided I should return a signing bonus built into my contract. I also wondered how I would react if the general public started hating my employer (a cable company) and successfully lobbied government to tax me more out of spite.
Some AIG executives have now decided to “voluntarily” hand back the cash. But they are just trying to save themselves from being financially lynched. The bailout money sent to AIG is moot. These so-called bonuses were legally negotiated payouts at a private company and the contracts were inked before the crash. In today’s environment, the handouts might seem ridiculous. But they were not tied to performance.
I’d keep the money. George W. Bush kept his pay. So did Sir Allan. Why not AIG executives?