It was just last week that I wrote about how much of the AIG (AIG) bailout money went to European banks. Now we hear about how they are planning on paying $1.2 billion in bonuses, and this money is reportedly going towards the derivatives trading staff, which got them into trouble in the first place.
The outrageousness is unbelievable!!! The stock sells for pennies yet they have received over $11 per share in bailout money! And by the way, whatever happened to the fraud investigation of AIG that started in 2007?
I get asked by readers, what should the government do for AIG instead of the bailouts? Here is the answer:
1. The government should immediately offer to back any life and disability insurance policies and annuities of AIG.
2. Since the government is "80% owner of the company", it should immediately vote out all the members of the Board of Directors, put in their own directors, who should in turn, terminate and replace all top executives.
3. The government should immediately clawback any and all bonuses paid to executives of the company over the last three years.
4. It goes without saying that no bonuses should be paid whatsoever. It AIG can't get out of their "bonus contracts", then the government, as "80% owner", should have the company declare bankruptcy immediately.
5. The government should take back all the bailout funds it can possibly recover that it gave to the company. The government is going to need all the funds it can get to back all of AIG's life insurance policies.
6. After all the above is done, the government should then look for a buyer of the "company" or its "assets".
Disclosure: Author is embarrassed and ashamed to admit he owns AIG, and he would rather have the stock go to zero than have the company receive any bailout money.