According to The Economist, in the financial crisis, “AIG have taken $220m in bonuses since the insurance giant was bailed out with $170 billion of taxpayers’ money”(2009, ¶1). With this event, “Barack Obama ordered his treasury secretary to find a legal way to claw back the bonuses”(2009, ¶2). Although, Obama has many options to do with AIG, it’s not good. For example, “He could try to use executive power to break the contracts; but that would tie him in legal knots and might undermine confidence in the rule of law”(2009, ¶6). Moreover, he could get back the money by cut down the next tranche of bail out money, but it seems the government will give money more that AIG really need and the bonuses still remain with the employees. Therefore, his best course is “to explain, calmly and patiently, why bailing out banks and honouring contracts are necessary evils”(2009, ¶9).
AIG has a financial problem until it was bailed out with public money, why did AIG give bonus to employees? I hear that the company has to pay bonuses follow their contract but I think in the financial crisis, the company can explain to employees about this situation that company should reduce costs to run on the business. What do you think about this issue?
AIG has a financial problem until it was bailed out with public money, why did AIG give bonus to employees? I hear that the company has to pay bonuses follow their contract but I think in the financial crisis, the company can explain to employees about this situation that company should reduce costs to run on the business. What do you think about this issue?
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References
Easy does it. (2009, March 19). The Economist. Retrieved March 23, 2009 from http://www.economist.com/opinion/displaystory.cfm?story_id=13326168
Sorry, but I want to say, it's idiot to act like this!
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