Tuesday, May 5, 2009

Paging Barney Frank: AIG Paid 3x More In Bonuses

Let's recall what the magical bonus number was that caused Barney Frank to almost get a lynch mob armed and ready to march on Wall Street: $165 million in retention bonuses. So one would expect Barney's anger would be three times as high when the actual performance bonus number was revealed today, which according to on the record Q&A was actually $454 million.
The company told Representative Elijah Cummings, a Maryland Democrat, the performance bonuses were paid out by operating units, across the company's operations in some 120 countries.

Payments ranged from an average of $5,403 to employees of its property-casualty group, to $51,026 on average for those in its asset management group.

The payments are in addition to an about $120 million corporate bonus pool designated for holding company employees and executives at subsidiary companies.

The payments are separate from $1 billion in retention payments to entice employees to stay with the company.

Presumably, if Mr. Frank's righteous indignation was truly that and not merely a smokescreen to deflect public opinion from the crashing market in late February, this should raise the temperature in D.C. by at least 10 degrees. However, now that the market has been squeezed by 35% and as even the Onion has insightful pieces on the impact of this to the public subconscious, it is likely that no scapegoating will be needed right now, and this little AIG iniquity will be merely tucked away in the "Use If Trading Circuit Breakers Are Let Loose" category.

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