Thus far the major argument in support of allowing AIG to keep their bonus is that the major insurer is legally obligated to do so. But wait! Not so says the majority expertise opinion. Two of the most knowledgeable people on this issue, Lawrence Cunningham, a law professor at George Washington University and Laurence Tribe a law professor at Harvard, both are quite confident that recinding the bonuses is in fact quite legal.
Even AIG’s framing of the bonuses as “retention” bonuses implies as much. Not to mention that AIG’s Chief Executive Edward Libby has asked those receiving bonuses larger than $100,000 to return at least half.