AIG kitchen worker gets $7,700 bonus
Posted
Oct 14 2009, 05:53 AM
by
Douglas McIntyre
Rating:
American International Group (AIG) is a meritocracy. One of the firm’s best kitchen workers got a $7,700 retention bonus as part of the firm’s plan to keep key employees. According to the FT, the payment was made in March.
Kenneth Feinberg, the government’s pay czar, is asking that AIG retention bonuses be cut by $198 million for 2010 and that the company “claw back” $45 million from last year.
The trouble with the plan is that some of the retention programs were probably part of written agreements with employees, and the federal government may not want to be seen as violating contracts. It would raise the issue of whether employment agreements at firms which have still not repaid government loans are any good at all.
The pay czar may find pressure from AIG workers and the legal community to honor past commitments. Some of the pay agreements may even go into court. If the pay czar loses in a dispute in district court, if could severely undermine his future ability to regulate Wall Street pay.
As for the kitchen worker, Feinberg will probably not get that bonus back. It was probably already spent on a new car, a vacation condo, or a child’s college education.
Top Stocks blogger Douglas A. McIntyre is an editor at 24/7 Wall St.
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