Bonus Babies (Or How I Got My Piece Of The AIG Bailout)

I have a friend who is one of the 400+ AIG employees, current and former, who received one of those “retention” bonuses that everyone is in such an uproar about.  As an aside, why do you pay retention bonuses to people who have left?  Wouldn’t that be more of a “please come back” bonus?

Anyway, my friend’s share of the total $165m that was paid out last week was small, but it was enough for a nice vacation or a decent used car (which he might need as he is no longer employed).

Now, I am not surprised by the public outcry around these bonuses being paid by a company that ran itself into the ground and is only being propped up by Barack Obama’s ever spinning printing press. And I love the way that the same lawmakers that 1) authorized the billions of dollars for the bailout, and 2) selected the management team to go in and run the company, are jumping onto the pile and lambasting AIG for so “frivolously” spending their our money.

But let’s look at the stated rationale for paying out these bonuses. The Federal Government decided to rescue AIG from a certain and deserved corporate death by handing over billions of dollars to be used to keep the company afloat. Why do I say deserved? Because if I start a company, make bad decisions, and consequently go out of business, I don’t expect the government to reward my efforts by handing me a blank check. I fail, I fall, and hopefully I dust myself off and learn to make better decisions the next time around.

So, AIG gets all this cash to keep the doors open. Well, if they are to have any chance of success, they need to keep the only real assets they have left - their key employees. Retention bonuses are a common method that companies use to keep key people during periods of upheaval such as a merger or bankruptcy. So is paying out a chunk of cash to retain valuable assets wrong? Not in theory.  It happens all the time.  So I get that retention bonuses might be needed to keep the employees necessary to fulfill the government’s pipe dream of making AIG self reliant again.

I just find it laughable that all these lawmakers who handed over the money and chose the people to come in and run the company are so vehement and loud in their criticism. Hello?! You’re giving out all this money to these beleaguered companies without demanding a comprehensive plan on how they intend to use it? What do you expect?

If nothing else, the silver lining in all this AIG bonus mess is that public sentiment for the bailouts and the government jugheads who approved them is taking a decidedly nasty turn. Hopefully the seeds of discontent will continue to grow and force some changes.

Oh, my buddy, the AIG bonus baby? He gave me $10. So, I gots me my piece of the bailout pie.

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