American International Group plans to pay out $503 million in deferred compensation to some of its top employees, saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant….
AIG spokesman Nicholas Ashooh said yesterday that the company is desperately trying to keep top talent from leaving, and that giving them deferred compensation works as a carrot to keep them on board.
Now let me make a few things clear, so that you don't have to read the article.
First of all, this is not money from the bailout (i.e., your tax dollars at work) going to pay these people.
And despite my headline, we are not talking about end-of-the-year bonuses. It is deferred compensation being paid earlier than planned. Which is kind of a bonus. And it is being done in order to keep (according to AIG spokesman) "top talent from leaving".
But here's the thing:
Why is AIG doing this to keep "top talent"? Who is the "top talent" at AIG? It's the same brainiacs who ran it into the ground in the first place. It seems to me you shouldn'e be incentivizing these people to say. In fact, you should probably be doing the opposite.
And actually, it is taxpayer money (in the form of government bailouts) which is being used to free up assets in order to permmit the earlier-than-later deferred compensation scheme.