This has been a hot news recently! And being a BBA student I should post something about business related issues.
US Federal Reserve lends AIG 170 billion of taxpayers money.
AIG paid 165 Million of Bonus
“Of the 418 employees who received bonuses, 298 got more than $100,000, according to the New York attorney general, Andrew M. Cuomo. The highest bonus was $6.4 million, and 6 other employees received more than $4 million. Fifteen other people received bonuses of more than $2 million and 51 received $1 million to $2 million.” – NewYork Times
Edward M. Liddy (CEO of AIG) defends was the bonus was part of the employee contract, it was before the finical crisis. They thought it was reasonable before to use 165 million of the 170 billion given to them.
Currently Mr. Liddy is asking Bonus Recipients To Give Back Half
In some sources it said that the government can just give those bonus a high tax rate like 90%~
This is like how Citigroup received $45 billion in government bailout funds and the executives wanted to spend $50 million corporate jet but later given the pressure of the public they scrap their plans for the plane.