Croker Sack

"Democracy is the theory that the common people know what they want, and deserve to get it good and hard." — Henry Louis Mencken (1880-1956)

Tuesday, March 17, 2009

When is a bonus not a bonus?

According to Reuters, this is part of the letter from New York State Attorney General Andrew Cuomo to Representative Barney Frank about the AIG "retention pay" contract payments:

"The contracts shockingly contain a provision that required most individuals' bonuses to be 100 percent of their 2007 bonuses," Tuesday's letter said. "AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous."

Well, no wonder AIG has called it "retention pay." A "bonus" would be based on meeting performance goals -- which surely would not include driving the corporation into bankruptcy.


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