Nobody has ever pretended that the $165 million AIG paid out in bonuses to employees of their London unit — the unit which caused all the losses which required the spectacular and ongoing bailout of the company — constitute a conventional performance bonus.
What they did pretend — and this has been a common pretense among bailed out firms — is that it is a retention bonus. Thus, CEO Edward Liddy‘s stirring defense of the payments:
We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.
Of course, we can’t. However, it appears that we can’t retain the best and the brightest talent even with the so-called retention payments:
… New York Attorney General Andrew Cuomo confirmed in a letter to Congress that this year, after receiving federal bailout money, AIG paid 73 employees bonuses of more than $1 million each.
Cuomo also wrote that 11 of the employees no longer work for the company. The largest bonus paid was $6.4 million; seven other people also received more than $4 million each.
It’s not clear whether they took their millions and left, or whether they left but still got their millions. What is clear is that the retention argument doesn’t exactly fly.
Perhaps, we need a national contest to come up with the right phrase to describe these payments? If Treasury Secretary Timothy Geithner — who has now officially gone from being “uniquely qualified” to being hapless (as per Time, Huffington Post and Salon) — had any sense he would announce a first prize of say $200,000. First of all, such a contest would be cathartic for the millions of Americans who are consumed by outrage. It would also, no doubt, be stimulative, assuming that the winner is likely to be someone who was put out of work by the depressing economic legacy of George Bush. Those are the people who would have the proper depth of feeling, as well as “world enough and time” to do justice to that depth of feeling.
Till the contest comes along, and the winner is announced, though, I am partial to a phrase that Jon Stewart used to be fond of using. It has the advantage of being phonetically related to the word bonus, and also describing what the recipients of the money did to AIG, and, therefore, to the entire global financial system, and, therefore, to the American taxpayer.
This $165 million is bone-ass money. As in, we’re paying them for “royally boning us in the ass.”
*** Update, 6:57 a.m. ***
The NYT provides a fuller picture of bone-ass payments to the departed (the very dearly departed, actually):
The bonuses that the American International Group awarded last week were paid to 418 employees and included $33.6 million for 52 people who have left the failed insurance conglomerate, according to the office of the New York attorney general.
So not only did 12.5% of those who got the bone-ass money leave, but these guys got 20% of the money. In other words, the guys who left got a much higher average bonus than the guys who stayed: roughly $650,000 versus
$400,000 $360,000. Retention bonus, indeed!