Monday, March 16, 2009

How to stop AIG's bonus?

AIG’s outrageous (many many outrageous from everywhere) bonus ignites government’s swift responses as well as denounce from the public. The government tries to stop the bonus and get a list of the receivers. Although Summers said that it is difficult to stop the legal contracts that had been signed at the beginning of 2008, it is still possible to claw it back.

It is well known that the Wall Street firms offer lucrative contracts that guarantee key employees’ benefit regardless of their performance (even they’re fired), their company’s performance (even bankrupt), and overall economical conditions (even it were in the Great Depression). These highly paid employees are so called talents to the firm, who brought in businesses and might bring their firms to the brink of cliff. But the contracts are legal, following well whatever the laws say and well protected.

So what can we do to stop the AIG bonus? Just brainstorming here.

1. The receivers voluntarily refuse receiving the bonus. They will grilled and followed after the list releases. Thus, the idea case is to admit they wouldn’t accept that.
2. If the bonus is still out of the door under this tide (bravely), then AIG should would revise their future contracts and reduce their current pay so that the bonus is offset. This is just a damage control.
3. The last resort, the receivers should leave and let new contracts in place so that such “outrageous” contract should continue, particularly for whom received taxpayers’ money.

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