AIG has received a $153 billion in government bailout monies (so far) and tallied over $60 billion in capital losses, but cut just 500 jobs or 0.8% of its work force (from Bloomberg, as of Nov. 21, 2008). That looks a little fishy when compared to UBS AG, who has $49 billion in capital losses and has slashed a massive 10.8% of its workforce.
And now AIG is paying bonuses and award monies using part of the $153 billion. AIG is bad and continues to scoff at the
AIG -- the insurance giant that has thus far received $153 billion in bailout money and is 80-percent owned by the government -- is paying retention bonuses to at least 2,000 employees, Bloomberg is reporting.
The bonuses equal one year's salary, and employees were ordered to keep them secret, Bloomberg said.
AIG confirmed the bonuses to Bloomberg.
Retention bonus payments are common in troubled and reorganizing companies as a way to hold onto executives familiar with the companies's operations. Enron paid retention bonuses, for instance.
Except in AIG's case, the bonuses may be coming out of taxpayer money.AIG has already been blasted for giving bonuses to 168 executives, with some getting as much as $4 million, AIG chief executive Edward Liddy told Congress last week.
Prior to that, AIG paid $440,000 for 70 top AIG contractors to spend a week at a California luxury resort -- days after the company got its first $85 billion in taxpayer money.
In late November, responding to bad p.r., AIG said that Liddy would get $1 in salary through next year, salaries would be frozen and seven top executives would not get 2008 bonuses.
This doesn't make sense - how can a firm that is 80% owned by the government run such a scam right under the public's nose? The insurance industry is likely to slash jobs going forward - the Fed can't possibly support them all (sarcasm). It will be interesting to see by how much or even when the government intervenes to downsize AIG because the job loss has been slight at best.
This is becoming increasingly clear: only the