Remember When AIG DIDN’T Pay It’s Bonuses?

The always useful TPM remembers that AIG wasn’t always so eager to pay its employee’s bonuses:

AIG was being sued for breach of contract by a former employee, Rob Feilbogen. Feilbogen claimed that when the unit he worked for, AIG Trading, was put under the control of Cassano’s AIG Financial Products, he was informed in writing by an AIGFP executive that the company’s previous guarantee to pay him a bonus of $1.3 million would no longer be operative. Feilbogen said he was told he would still be eligible for a bonus, but the $1.3 million figure would not be guaranteed.

In a letter to Cassano, Feilbogen insisted on receiving his $1.3 million bonus. In response, Cassano played hardball, telling Feilbogen he could agree to the new deal, or resign. Feilbogen continued to resist, and was soon informed by an AIGFP lawyer that his employment had been terminated “as a result of his decision to resign.”

The lawsuit was eventually settled out of court. But the case suggests that whatever bonus agreement Feilbogen had, or claimed he had, with AIG, Cassano and his colleagues weren’t inclined to treat it with much respect.

Does anyone have a legitimate argument for why AIG executive’s should be given their bonuses? I’m honestly curious to hear someone make the case with a straight face.

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4 thoughts on “Remember When AIG DIDN’T Pay It’s Bonuses?

  1. Sadly, you just might get a number of people taking up that challenge. They’ll come here with straight-faced arguments as to why it’s “wrong” for the AIG executives to ge their bonuses. Of course you’re stipulation of “legitimate argument” might make it difficult. 😉

    Then again, what exactly is a “legitimate argument?” Must it be based on law, or can it be based on right and wrong?

    Personally, I don’t want these people to get their bonuses, but they’re legally entitled to them and the pricetag for allowing encouraging the government to twist or violate the law in this matter is just too high for my comfort.

  2. Personally, I don’t want these people to get their bonuses, but they’re legally entitled to them and the pricetag for allowing encouraging the government to twist or violate the law in this matter is just too high for my comfort.

    The majority expertise opinion indicates that forcing executives to rescind bonuses is not illegal. 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 about this.

    Even AIG’s framing of the bonuses as “retention pay” concludes as much.

  3. No, Phil, the opinion of two Liberal and Populist pundits are against it. That is hardly a majority, though both individuals have been granted enough clout to have their matter.

    As for their confidence, there would be little hope for an objective court ruling in the current climate so that confidence is meaningless. Attorneys have little or no care for the law and are only concerned with winning their cases. That holds true for all attorneys irrespective of role due to the deliberate, in-built adversarial nature of our legal system.

    • No Jonolan, this is what happens when you don’t read.

      I said the majority of lawyers said recending bonuses is legal. Cunningham and Tribe are TWO OF THE MOST KNOWLEDGEABLE people on this subject. The links I provided point out that Tribe was the lawyer on the most relevant and recent ruling in this subject matter.

      You need to read more careful instead of using your kneejerk reactionism to automatically disagree.

      Futhermore, neither you nor I are lawyers. I can only provide you example opinions from lawyers who represent the majority. (By far from what I’ve seen. Feel free to provide counter opinions from lawyers if you believe I’m wrong about majority opinion.)

      All you’re doing is, quite frankly, making unwarranted assumptions that come straight from your ass. You don’t know how public opinion will sway a court room. You lack an intimate awareness of how lawyers select juries, etc, etc.

      Feel free to comment, but please acknowledge that you really have no basis for your opinions whatsoever.

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