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NEWS > BUSINESS > AIG BONUS PLAN PROMPTS FLOOD OF JOB APPLICANTS

AIG BONUS PLAN PROMPTS FLOOD OF JOB APPLICANTS

March 16 2009

New York City, NY - Though reduced, the plan by AIG officials to pay out $165 million in bonuses and retention payments despite accepting $165 billion in public funds, has met with outrage from Washington. White House officials and members of congress are up in arms against the company even after executives dedicated to reducing the bonuses by 30 per cent, and that has AIG officials reeling. In an unexpected turn of events, the company has also been flooded with resumes and job applications for executive positions, leading the company to ponder asking for more bailout money to deal with interview process.

“What that company did, the way it was not regulated, the way no one was watching, what's proved necessary, it is outrageous,” said Lawrence Summers, head of the National Economic Council. “There are a lot of terrible things that have happened in the last 18 months, but what's happened at AIG is the most outrageous.”  

Reportedly Treasury Secretary Robert Geithner was ‘really upset by the news’ of the bonuses, though it is not clear if that is a result of concerns about the bailout money or his early acceptance of the Treasury position before AIG’s bonus structure was revealed.

“People are losing their homes, falling deeper and deeper into debt, mortgaging their children’s futures and yet companies like AIG continue to pay out massive bonuses to their employees. 500,000 people are losing their jobs monthly and yet somehow AIG has remained completely oblivious of their surroundings, which of course makes it a very appealing place to work,” said Scrape TV Business analyst Ken Green. “If you are the position of potentially losing everything you own then getting a job that not only pays you regularly but actually gives you bonuses for showing up is to really appealing. In this hard economic climate people don’t really have a whole lot of choices and any option, even an executive position, will be appealing in that situation.”

It’s not immediately clear if AIG executives and accountants view the bailout dollars as part of their natural revenue stream, hence the possible reason they have been hesitant to cut back as other companies have done.

“This really puts AIG in an enviable position. Hiring and training is always the most difficult part of running a business. Finding the right resume can be like a needle in a haystack but AIG has done exactly the opposite of what every other company in the country has done. The reality is there is now a massive potential workforce in America desperate for a job and by continuing to offer these bonuses they are
stocking their pile of applications,” continued Green. “Executive positions are not necessarily the most enviable of jobs to hold at the moment, what with all the calls to congress and criticism in the newspapers and websites, but by offering this incentive they are going to put themselves in a really good position, once they can afford it that is.”

resumes they have received.

“From filing to processing to the interview process the company is going to have to hire a whole new team of Human Resources people to deal with the massive number of applications and for that they are going to need a lot more money. With the amount that they are dedicating to bonuses, I don’t see how they can avoid asking for more government dollars,” continued Green. “The positive news is that despite the every other company suffering under this credit crunch some are still thriving and looking towards the future. The reality is one day this economic crisis will end and when it does companies like AIG are going to need employees. This move has ensured that they are in the best position possible to make that happen.”

AIG lost $62 billion in the fourth quarter of 2008 though how much of that went to bonuses or human resources isn’t clear.        

William Ashford, Business Correspondent

NEWS > BUSINESS > AIG BONUS PLAN PROMPTS FLOOD OF JOB APPLICANTS

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