When I first heard yesterday about how AIG had handed out $165 million in new bonuses, I thought it had to be a joke. Then, I knew it wasn’t, when I saw this article.
As a public relations practitioner, my first thought was – how could AIG have screwed up so badly again? Yet another body blow to a company that is hated, laughed at and is considered to be an almost unbelievable business case example of what is wrong today.
I mean… it’s CEO, Edward Liddy, concocted two reasons for the bonus hand outs that are simply implausible based on the situation our economy is in and based on who actually owns this insurance giant now. They are:
Point #1 – AIG is contractually bound to pay these bonuses or the company will be sued.
Answer #1 – Ok, you are right Mr. CEO. AIG might be sued if these bonuses aren’t paid. But, who cares? We are living in unprecedented times. And, these times call for unprecedented actions. The fact is that if the government didn’t step in THREE times to pour billions of $$$ into AIG, the company would be bankrupt. Do you know what that means? There would be no money to pay bonuses anyway. Now, the public owns 80 percent of your company. So, much like the automakers did (can’t believe I’m saying something positive about this group,) all existing contracts/agreements and any other special considerations should have been considered null and void. Because the only thing that matters is the company’s survival. Not, whether it’s executives (many who helped AIG lose billions) continue to get rich. Bottom line – the bonuses were just plain wrong and are clearly a public relations tsunami.
Point #2 – AIG has to pay these bonuses to retain talent or they will leave for competitors.
Answer #2 – I have one question for you, Mr. Liddy. Where will they go? Last I checked, Wall Street has shredded over 400,000 jobs. Financial firms, insurance companies and everyone else in the industry are still laying off thousands. I’m really curious on this one– what other competitive jobs exist right now that will take in these high priced senior executives (many who have egg on their faces)? That’s right. It just doesn’t add up because there are no jobs to be had. And because of that, there is no credibility in this message.
Let’s get back to my original premise above. It took me a while (sorry, sometimes I am slow to see the obvious,) but now I get it. This really isn’t a public relations blunder for AIG, because AIG doesn’t care about its public image at all. That’s the only conclusion I can come to now. Over the last seven months, the company has continued to make mistake after mistake, with each one growing noticeably larger in the public’s eye. The most recent disaster was handled in such an amateurish way (the contents of the letter sent to our current Treasury Secretary,) that it’s almost inconceivable to me that AIG’s senior management is even attempting to rebuild faith with the public or any of its key stakeholders (except those who received big bonuses, of course.)
Let’s keep our eyes wide open as to what comes next. With the President, Congress and the AG all swooping in, I think this might be the last mistake this now cartoonish looking company will be allowed to make.