Monday, March 16, 2009

AIG Bonuses

A lot of outrage over $450MM in bonuses, but with 115,000 employees, that's only about 4k per employee. Some are contractual payouts from revenues, such as commissions. I don't see how you can stop this.

Now, for those managing people who generate revenues, or managing people who manage people, I agree that these people's bonuses might be inappropriate. But if your base salary is $100k plus x% of commissions, I don't that's excessive or problematic.

1 comment:

Alex R said...

Eric, your 4k per employee calculation is way off -- it's not the bonuses for AIG's (profitable!) insurance arms that are controversial, it's the bonuses of "more than 400 million" for AIG's "370-person Financial Products unit" that are controversial. (Both quotes from the Washington Post.) Let's not forget that it was the CDS contracts entered into by the Financial Products group that created this disaster, and consider now that we are looking at more than 1M per AIGFP employee, and the bonuses don't look so good...