The real AIG bonus scandal is that a majority stockholder cannot prevent nonsense set in motion before the stocks were eagerly tossed like confetti at the federal government by management begging on its knees for cash.
We, the people, now own 80 percent (!!!) of AIG at a cost of about $170 billion of our money; about $165 million in bonuses was scheduled to be paid by March 15; some of the individual bonuses range between $1.5 to $3 million, but most are merely in the thousands; the government-appointed overseer was told by lawyers that the bonuses must be paid under pre-existing employee-retention contracts.
The single fact that stands out to me is that March 15 is the deadline for filing corporate taxes. Typically, corporate expenses booked as 2008 prior-year accruals (in English: owed, but not paid, in 2008) must be actually paid out before that date. So the overriding urgency to make the payments is a tax filing.
Well, hell, Tim Geithner, let's have our AIG accountant file for an extension of the deadline while we figure out why these bonuses are being paid at all. There's still time: extension applications can still be filed today.
But what about the alleged top talent AIG stands to lose? Let's challenge them to go get another job with "AIG" on their résumés.
