by D. Babbs
With the CEO of AIG testifying last week, many people have had a lot to say about the company and their massive bonuses. For those who have been in a cave and not informed about AIG’s bonus payout situation, AIG has been given access to $182 billion in taxpayer funds in the past 6 months. Of that bailout money, it paid out $165 million in retention bonuses to employees in the company's financial products division. Some believe giving out such bonuses in this current economy was unethical.
Now the question is “What is the government going to do?”
Some solutions have been to tax the bonuses but the money has already been distributed and the tax only applies to a small of individuals. Many are also concerned about the effect such a decision may have on future deals with the private sector.
Tomorrow’s congressional hearing with the Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner may provide us an answer or at least the beginning of a solution as they will testify before lawmakers on oversight of the government's intervention at American International Group.
CEO Edward M. Liddy has asked the recipients of bonuses to “do the right thing.” In other words, he would like individuals to return their bonuses.
Patience is a virtue so we’ll just have to wait and see what happens.