Law Professor Cornelius Hurley, director of the Morin Center for Banking and Financial Law (and early in his career responsible for executive compensation at Shawmut National Corporation, now part of Bank of America) says there should be no bonuses at bailed-out insurance giant AIG.
“It defies imagination that the Treasury Department would sign off on bonuses to AIG executives of any stripe, particularly to those in the company’s infamous Financial Products unit. The claim that the bonuses are contractually owed is a fig leaf covering up corporate waste and abuse of taxpayer dollars on an enormous scale.
“At a minumum, any executives that choose to accept such bonuses should be required to demonstrate to the U.S. taxpayers that theire performance had nothing to do with the massive losses the firm is experiencing. Treasury should be talking with AIG and its executives about the disgorgement of bonuses awarded from 2004-2007, not negotiating over awards for the disastrous results of 2008.
“AIG is de facto a failed enterprise. Failed firms do not typically award bonuses to their executives. This is a clear example of what Chairman Barney Frank of the House Financial Services Committee refers to as the ‘heads I win, tails I break even’ mentality of executive compensation.”
Contact Cornelius Hurley, 617-353-5427, firstname.lastname@example.org