Sunday, March 15, 2009

Rewarding failure - Updated

An obligatory WTF post. I'm sure you'll all have heard that AIG has another round of retention bonuses in the works. Geithner made the obligatory "sternly worded phone call" and that changed practically nothing.
In a letter to Geithner yesterday, Liddy agreed to restructure some of the payments. But Liddy said he had "grave concerns" about the impact on the firm's ability to retain talented staff "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."
Same lame excuse every time. Where are these people going to go? If there's a huge demand for bank execs capable of running their companies into ruin, I haven't heard of it. A more legitimate concern is over lawsuits for breach of contract but as many have pointed out, bankruptcy is still an option. I don't know why we don't just take it over and break it up into pieces small enough to fail.

And as I've been saying for weeks now, we shouldn't be bailing these people out, we should be indicting them for fraud.

Update: A simpler solution. Offer to fire them for cause--hey they ruined your company-- don't pay them "retention" bonuses.

[More posts daily at The Detroit News]

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2 Comments:

Anonymous Jackie said...

AIG must give big bonuses to hire the most skilled individuals!!!!! Give me a break. Many people with excellent skills are looking to work now. What a terribly weak excuse for the greed that we are having to pay for!!

6:20:00 PM  
Blogger Libby Spencer said...

Really Jackie. I'm pushing for prosecutions at this point.

6:55:00 PM  

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