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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

18 Mar 2009

AIG bonuses come under the spotlight

In the US, questions are being asked about bonuses paid out by Insurance giant AIG in the light of government assistance in the order of $170bn received.
AIG are planning to pay out $200m in bonuses to keep it's employees from rushing out of the door to find more secure employment. Congress are calling AIG directors to explain their actions and justify individual payments which range from $1000 to over $6m per employee.

Like the RBS pension debacle, these deals were concluded shortly before the government stepped in. Last year the US government appointed Edward M. Liddy as chairman and CEO of American International Group Inc. and he has found that there is little he can do to prevent these payments.

This follows on from another recent report that AIG had paid out over $90bn of government money to institutions that had receieved their own bailout cash. AIG and Liddy could be set to become the US scapegoats in the same way that RBS and Sir Fred have in the UK. AIG has become the single largest recipient of government aid, and as such will be under the microscope of government and the public for some time to come. Windfall taxes are now been considered to recoup money that has been paid out from bailout recipients.

Related posts:
Fanny&Freddie are nationalised
Sir Fred's pension
The Bush rescue plan begins

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