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AIG, the worlds largest insurer and one of the orginators of this financial crisis has been in the news again. They are planning to pay out a whopping $165 million of bonusses relating to the results of 2008.

Remember 2008, the year that AIG presented a record loss of $61.7 billion in the fourth quarter 2008. This meant that AIG had had 5 successive periods of loss up till the end of 2008. However, the bonusses were paid because:

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” E. Liddy, CEO Source: New York Times

I may be just a simple persion, but if you make these types of losses, there should be absolutely no reason that you are going to pay out these amounts to keep them on. There is simply no reason to, because they wouldn’t go anywhere. Somehow i don’t think AIG is the best reference on your CV at this time.

The bonuses will be paid to executives at A.I.G.’s financial products division, the unit that wrote trillions of dollars’ worth of credit-default swaps that protected investors from defaults on bonds backed in many cases by subprime mortgages.

The bonus plan covers 400 employees, and the bonuses range from as little as $1,000 to as much as $6.5 million. Seven executives at the financial products unit were entitled to receive more than $3 million in bonuses. Source: New York Times

So these bonusses are going to be paid out to the top 400 employees, who can probably be seen as one of the reasons for the crisis. Their actions in the subprime mortgages have resulted in all this, and they still get paid huge bonusses?

Well, one can only think that this is just another example of money grabbing atrocities in the top of the current business world. There seems to be absolutely no connection anymore between the amounts paid out as bonusses and reality.