New AIG Bonuses Top $100 Million
February 4, 2010
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Just one year after executives in the troubled Financial Products Unit at AIG split $168 million in “retention bonuses,” the same group is poised to get another $100 million in bonus money. The Wall Street Journal cites the Financial Products Group as “responsible for the soured trades that precipitated the government rescue of the company.” AIG received $175 billion in taxpayer bailout money.
The Obama administration’s pay czar, Kenneth Feinberg, was quick to condemn the payments, saying, “I’m as troubled as Main Street is by the contracts,” but “there’s a limited amount of leverage when you have valid, grandfathered contracts.”
“This is just another outrageous example of coddling Wall Street and ignoring working families,” said IAM President Tom Buffenbarger. “Where were all these officials defending ‘legally binding contracts’ when it was pensions and pay on the line for our airline workers? In industry after industry, workers are told they must sacrifice what was promised to them in their contracts in order to save their companies. And people in Congress and corporate flacks in the press join in and criticize hard-working Americans as overpaid. But when it’s Wall Street executives with something to lose, all of a sudden it’s not right or not possible to change a contract. It should be criminal.”
After the September 11 attacks crippled the airline industry, the Bush administration conditioned federal help on opening up labor contracts for workers and extracting concessions. Several major airlines used bankruptcy court to dump pension plans on the government and force reductions in pay and benefits for workers. Similarly, the government bailout of the automakers was conditioned on opening up “legally binding contracts” for workers and negotiating givebacks to save the industry.
In other bonus news, Bank of America, which received $45 billion in taxpayer bailout money, announced bonus payments totaling more than $4 billion. That’s enough to pay each eligible executive $400,000. Bank of America has repaid the $45 billion to the government.
