AIG Bonuses

From the New York Times:

A.I.G. Planning Huge Bonuses After $170 Billion Bailout

The article mentions that AIG is now about 80% owned by the U.S. Government.

In a letter to Mr. [Treasury Secretary Timothy F.] Geithner, Edward M. Liddy, the government-appointed chairman of A.I.G., said at least some bonuses were needed to keep the most skilled executives.

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he wrote Geithner on Saturday.

I’m not sure what the most damning element is here.  “Skilled executives” must be a contender, as is “arbitrary”.  I’m one of those people who believe that bonuses should be awarded for positive results, and withheld if one’s performance drives the company into the ground (although Carly Fiorina might disagree with me).