$165 million is a lot of money; it is also — just about half a percent of $37.5 billion dollars.
To me, the most interesting part about the AIG bonuses is how it has completely over-shadowed the news about the massive payments AIG made to European banks.
Societe General of France, Deutsche Bank of Germany, Barclays of Britain and UBS of Switzerland together account for about $37.5 billion dollars made by AIG to its counterparties.
Clearly, $37.5 billion dollars is much larger than $165 million and should have angered the American public to no end, especially, when it has been given to banks from European countries, who have not had to shoulder the kind of bailouts the Americans had to support.
The bonuses are just pocket change when you compare them to the massive payments made to the European banks, but still, the emotion they stir shows one thing — its not about money.
Its about two things:
- The Greed of those who failed AIG, and then turned around to collect their bonuses.
- The failure to stop these bonuses by the US Government who were supposed to protect the taxpayer.
Anyone who talks about iron – clad contracts is true to the extent that the letter of the law may be violated, but what about the spirit of the law?
You can talk about an employee retention program and you can talk about Wall Street bonuses being part of salaries, but, at the end of the day — its beyond all that.
It is simply a matter of taking money that doesn’t belong to you. There is nothing more to this debate than the fact that you are taking money that is not rightfully yours.
The other issue that is causing so much heart burn is the government’s inability to do anything about the bonuses. Felix Salmon has this excellent post about — How T0 Not Pay AIG Bonuses.
If AIG simply didn’t pay the bonuses, would the employees of the financial products arm really fancy their chances in court were they to sue to receive them?
It’s possible that they would “win” such a court case — if by winning you mean having your picture splashed across every TV screen in the land as an exemplar of out-of-control greed and avarice. Which is why AIG could probably have quite a persuasive conversation with the AIGFP employees, along these lines:
“We know we promised you this money, but it’s clearly politically impossible for us to pay it to you. So you’re not getting the bonus you were counting on. Sorry about that. At this point, you have three choices. You can continue to work for us, and keep your job. You can quit, and find a better-paying job elsewhere. Or you can quit, and sue us for the bonus that we promised you. Your call. But if you choose the third option, you’ll probably want to hire a PR person at the same time as you hire a lawyer.”
People are angry about losing money, but, they are really mad at greed, lack of accountability and then some more greed this drama has exposed.