Monday, March 16, 2009
The AIG bonus story has gotten plenty of press over the last few days - and rightly so. The idea that a company in "need" of billions in tax payer subsidies is also handing out millions in bonuses, justifiably angers taxpayers.
But truthfully it's just too easy to jump on the "bonuses are ridiculous" band wagon at this point. I'd like to look at this from a slightly different, although equally critical, angle. How did AIG executives not understand the public relations nightmare these bonuses would create?
These folks must have been watching the news when the president publicly decried these very kinds of bonuses a few months ago. They must have been paying attention when the million dollar office refurbishing played out in the media. They must understand that it's no longer the high flying 1990's - right?
It looks like the wall street sense of entitlement is even stronger than I imagined. Even looking at this issue strictly from a business perspective, how did AIG executives fail to notice the reputational hit the company would take when word of bonuses leaked out? Did they think it wouldn't leak? (That just seems naive.) Did they assume it would just blow over? (That's just stupid.)
In the end, the decision to hand out millions in bonuses probably points to incompetence at the helm of this company. Since the American taxpayer is handing over her hard earned money to this lot, can we at least put someone in charge who knows what they are doing?