The AIG (AIG) bonus issue is attracting a lot of headlines right now as President Obama is calling for them to be rescinded. He is calling on the Treasury to “pursue every legal avenue” to block the $165 million in bonuses. Furthermore, New York Attorney General Cuomo wants AIG to provide details on the bonuses by the close of trading today. There is never a shortage of drama going on behind the scenes at AIG. As Fox Business Network reported:
“First, the President said he’s asked Treasury Secretary Tim Geithner to pursue every legal avenue possible to block the bonuses to executives at AIG; then he said another interesting quote here, he said, “How do the derivative traders justify these bonuses, extra pay, for the jobs that they have done over at AIG?” And this is a story that of course broke over the weekend. President Barack Obama picking up on that. Then we find out while the President is speaking that New York’s Attorney General Andrew Cuomo wants to come out– he wants total details, individual bonus details from AIG by 4 P.M. today. So now you’ve got Andrew Cuomo going after these bonuses being paid out to AIG executives and derivatives trader. All that in 20 minutes.”
The news is breaking out fast and furious on AIG right now. We are staying on top of the news on RazorWire which tracks what is being talked about on business television. Clearly, the biggest story today is the AIG debacle.
How did the AIG executives expect to sneak this by the media and angry taxpayers? While, rescuing and nationalizing AIG may have been necessary to the health of the financial system, no one wants that money going to the executives that led it down such a risky path in the first place. We are very curious to see how this is handled by AIG, if they release names and specific details then things could get extremely ugly for those individuals. However, if they decline to give out those specifics they could take on the wrath of the political machine, perhaps rightly. There is an argument to be made for the necessity of retaining talent, but after the worst corporate losses in history some concessions must be made.
One other thing: How in the world is the stock trading up more than 70% today?