Open

Coming up

Don't miss

Replay


LATEST SHOWS

THE WORLD THIS WEEK

The World This Week - 01 August 2014 (part 2)

Read more

MEDIAWATCH

Coverage of Gaza in the Israeli media

Read more

REPORTERS

1914-1918: The Depths of Hell

Read more

THE WORLD THIS WEEK

The World This Week - 01 August 2014

Read more

THE INTERVIEW

Exclusive: Israel's US ambassador speaks to FRANCE 24

Read more

#THE 51%

World War One: The war that changed women’s lives

Read more

FRANCE IN FOCUS

Ségolène Royal goes for green

Read more

THE OBSERVERS

A look back at some of the Observers' best stories

Read more

DEBATE

Argentina Defaults: Kirchner Cries Foul Over 'Vulture Funds' (part 2)

Read more

  • Hamas denies capturing Israeli soldier as Gaza truce lies in tatters

    Read more

  • Scores killed in China factory explosion

    Read more

  • Exclusive: Israel's US ambassador speaks to FRANCE 24

    Read more

  • Police 'chokehold' caused NYC death, coroner rules

    Read more

  • French most keen to erase their online footprint, says Google

    Read more

  • Air France ground workers to strike on August 2

    Read more

  • Rogue general denies Islamist seizure of Benghazi

    Read more

  • Ugandan court strikes down anti-gay legislation

    Read more

  • 1914-1918: The Depths of Hell

    Read more

  • Regional summit to tackle deadly Ebola outbreak

    Read more

  • French hospital to open wine bar for terminally ill patients

    Read more

  • Video: Tipping is dying out in French café culture

    Read more

  • €2.5 million in cocaine ‘disappears’ from Paris police HQ

    Read more

  • Appeal court keeps French rogue trader Kerviel in jail

    Read more

  • Interactive: France’s new plan to counter jihadism in Africa

    Read more

  • Ukrainian army suffers losses in separatist attack

    Read more

Business

AIG bosses agree to return bonuses amid public outcry

Video by Guillaume MEYER

Text by Euny HONG

Latest update : 2009-03-24

AIG announced on Tuesday that much of the 165 million dollars in executive bonus money the company doled out would be returned. This comes as the US Treasury unveils its Public Private Investment Programme.

AIG made the startling announcement on Tuesday that 15 out of 20 of its bonus recipients would be returning their bonuses - a reimbursement of 50 million US dollars out of a total 165 million. The scandal has become the proverbial last straw in the growing public resentment about executive bonuses in a time of economic crisis. AIG is the recent recipient of 150 billion dollars in government aid.

 

According to some analysts, it may not be a coincidence that this news came at around the same time that US Treasury secretary Timothy Geithner announced his trillion dollar Public and Private Investment Programme. FRANCE 24’s Business Editor Douglas Herbert said, “While I would be the last to defend the warped Wall Street Bonus culture, the backlash against bonuses we’re seeing is driven more by politics than by economics. Obama desperately needs the good will of Wall Street and Congress to ensure the success of his financial rescue plan.”

Geithner’s plan is aimed at improving the financial health of banks by allowing the government – in partnership with private investors – to buy up toxic assets, thereby allowing the banks to start with a clean slate.

 

Harold Hau, a professor of finance at the INSEAD business school in Fontainebleau, told FRANCE 24 why Geithner was so hasty in announcing the plan: “Obama lost credibility by not acting swiftly enough in this crisis,” adding that this was “the Hurricane Katrina of the Obama administration.”

 

Radical measures such as the trillion dollar package – which would be partly shouldered by private companies – may reflect increasing public mistrust toward what it perceives as the government’s cosseting of big corporations.

 

So universal was the public outcry against AIG, for example, that it crossed bipartisan lines. When the House of Representatives voted on March 19 to reclaim 90 percent of the bonuses by levying a special tax, the bill passed by a staggering 382 for, 93 against.

 

This week, the US Senate is reviewing a measure to institute similar policies across the board. According to a March 19 Senate press release, Senator Chuck Grassley, one of the authors of the bill, said, "Getting bailed out by the American taxpayer was more than enough of a bonus for these companies and individuals.”

Date created : 2009-03-24

COMMENT(S)