As the Corporate Bread Line Turns.

AIG, who received more than $152 billion from American taxpayers, is handing out more cash rewards, that serve to double or triple the salaries of some senior executives. Did I say cash rewards? My mistake. AIG refers to these bonuses as retention payouts. This "retention" program will pay out as much as $4 million to 38 managers.

Retention? Where are these people going? Haven't they heard? Thanks to them, the economy is in rapid free-fall. And, if they do decide to leave...who cares? What did they achieve?

The "Cockroach Theory" certainly applies to AIG. We still can't see the extent of the "infestation" for all the solid walls still standing...a fresh $10 billion in losses just found. In other words, retaining inefficient, greedy and exploitative employees at our expense should not be tolerated, but it is.

"The gibberish about needing to pay that much just to keep superstars from fleeing to private-equity firms or hedge funds is just another Wall Street myth. The truth is most of them are lucky to have a job at all and they know it." - William D. Cohan

Merrill Lynch’s chief executive requested a $10 million bonus this year for all the hard work he had to do putting "Humpty Dumpty" back together. However, it appears CEO, John Thain may not get his wish, as well as many other Merrill execs.

Morgan Stanley is getting tough. They are attaching strings by imposing claw-back provisions to the bonuses they will eventually pay out, but they will be paid out.

The collective liability clause honored by partners was replaced with a system where bankers and traders were encouraged to take short-term risks with shareholders’ money. Gone, too was the idea of being held responsible for your actions (short of outright fraud). Managers at publicly traded banks constantly exhorted their traders to do bigger and bigger deals and to take increasing amounts of risk, and then rewarded them with millions of dollars in compensation — money that belonged to shareholders. Reputations were made not by turning down imprudent business but by seeing how much business could be done. - William D. Cohan

The same lack of oversight issues remain, as the Treasury has yet to do anything about it further enabling the corporate breadline.

Executive Paywatch Database