Who Wouldn't Work for AIG?

This simply cannot be ignored. CNN just ran a special this evening and at current is prominently displaying on their website a story pertaining to the paying of bonuses to executives at AIG. This, despite the absurdly large sum of bailout funds (which total upwards of $170 billion dollars if you want to try wrapping your head around that figure,) that the company received due to the economic fiasco that continues to plague the global market. Our New York CNN correspondent tries to shed some understanding on why it is that billions of dollars were spent to keep the doors open for this prolific insurer, and why due to contractual obligations AIG is "forced" to pay out their bonuses for fear of legal repercussions. There is no smoke and there are no mirrors to reflect the absurdity of the prior statement, it is in fact as ridiculous as it sounds.

Edward Liddy is the current government appointed CEO of AIG and has been in said position since September; which is to say that he essentially took the helm of the Titanic as it drifted lifelessly from the iceberg. Liddy is both shrewd and experienced, he sits on the board of 3M and Kroger and previously worked as CEO of Allstate for 6 years; one typically does not stumble upon positions like these due to random chance or shockingly convenient circumstance. Liddy expressed very specific concerns over the forced cuts that were pressed from the U.S. Treasury related to this additional money primarily because of what it will do for retention. After expressing some concern around the legal aspect of the owed bonuses, Liddy worries on record that the ability to collect and retain the best and the brightest for AIG if these bonuses are not paid decreases with these cuts and worse yet fear of their continuation may hinder the company in the future. Surely if these guys don't receive their money they'll be handing in their resignations post-haste, especially with jobs abounding all over the country at the moment particularly in finance.

As far as the legal climate goes with respect to this, I will not claim that there are not people out there ready and willing to sue for money they believe they are owed especially in this country and in the respective tax bracket that we are focused on. I do however consider it somewhat unlikely that such expensive and time-consuming legal expenditures would be fruitful. Building a successful legal case around bonus money coming from AIG would be one hell of a story, and I would almost like to see a case of this nature exposed to observe the public's reaction, as well as the judicial one. Needless to say, that I believe this to be the strongest portion of Liddy's argument for bonus payment, and in that respect I submit that it is about as intimidating as the threat of alien invasion or nuclear winter. The results would be almost as devastating as the odds that would play out to cause the event to transpire in the first place.

I will not claim to be in the midst of acquiring my MBA and preparing to enter the corporate insurance, securities, and international finance infrastructure, nor am I a veteran of the industry looking for a place to expand my career, but I will say this. Going from a relatively small sample size of under a 1000 people, most people that work for AIG in any field other than direct agent sales is making upwards of $40,000 a year while other reports would place the mean salary up above $60,000 a year. Both sources are calculating these numbers based on figures that were reported through March of 2009. I don't for one second believe that these figures are shocking to anyone who is looking to fill one of these positions. Also, provided you are intelligent enough to have established a portfolio that would open you up for consideration for an executive position which is entitled to a bonus as Herculean in strength as the ones that are affected by the measure that the Treasury is taking issue with, you have no intentions of crossing AIG off your desired list. Why? The government is so intent on this company not folding that they were willing to dump untold amounts of money into the companies counterparties to prevent them from experiencing any losses (which is interesting, I mean how does a government that does not disclose financial figures on wars, bailouts, or anything else it decides it does not want to give out qualify as being "for the people?"). In a time of financial woe and economic upheaval Edward Liddy is fighting for his executives bonuses' and the government is making sure that none of the companies business partners feel any pain. Who doesn't want to work at a place where you can lose $61 billion dollars in a single quarter and your CEO's chief concern in March is how much bonus money you're going to take home?

What person would take stock of this situation given what is taking place all around them and pass on AIG due to trepdiation that they might try to back out of a contractually negotiated bonus? Exactly. What are your alternatives? Sure there are other insurance companies out there that are competitive in terms of what they can offer, but just call it a hunch that none of them are capable of offering what AIG can. I'm sure the folks at AIG that are taking home their extra thousands of dollars aren't regretting their career path as they stroll to the ATM this Sunday.

Come to think of it perhaps Liddy is right. Perhaps people attracted to AIG after this public Treasury interference will not be the best and the brightest. But I see a different world like Dwayne Wayne, and I think that you would have to be far from bright to shy away from the money, prestige, and additional money that working for AIG represents. At the end of the day, I'm not Jim Cramer, and will not advocate that you go out and troll the closest person you can find that is employed by AIG. But I do request that people keep their eyes open. Hopefully, both you and I will go to sleep feeling comfortable that we own 80% of AIG, and that they will still be able to attract intelligent enough personnel to continue ruining the international market and destabilizing the collective future one day at a time.