Failure Bonuses

AIG in the news again. Hundreds of millions of dollars have to be paid out in three payment for bonuses and retention to employees of the company AIG which has received the largest amount of any financial institution from government bailout money paid for by American tax payers. What kind of financial system you have going that you have to pay bonuses to people who ran your company into the dirt. In most companies an employee would get fired for losing a lot less money than these people getting bonuses lost for their companies.

"Liddy said he had "grave concerns" about the impact on the firm's ability to retain talented staff "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury." Washington Post."

It would seem that in my uneducated opinion that these people can't be all that talented if they drove your company into the ground requiring hundreds of billions of dollars in tax payer's money to bail you out and keep you in business.

From the start I have felt that these institutions should have been allowed to fail and not have been bailed out in the first place. If we would have did that these institutions that have for only one conceivable motive, greed, would have had to down size, be more modest in their profits, and/or fold. Any institution following in their wake would be much more cautious in their approach of bad lending practices and be more fiscally responsible with everyone's money.

At the very least, the companies that are failing this bad need to have most of their upper executives fired and if they do get hired back, hired back at a rates that reflects their value, not reward them for bankrupting the institutions that they work for. If they were all fired the companies would not be under any contractual obligations to pay people for failing so miserably.

I finally agree with a Republican, Republican Sen. Charles Grassley of Iowa who made the statement:

"I would suggest the first thing that would make me feel a little better toward them [AIG executives] is if they follow the Japanese example and come before the American people and take that deep bow and say, 'I am sorry,' and then either do one of two things: resign or go commit suicide," he said. "And in the case of the Japanese, they usually commit suicide." "Cedar Rapids, Iowa, radio station WMT"

Pretty much sums up my feelings about the subject.