... which are a kind of 'balloon payment' on employee compensation. They were not "performance bonuses," per se. They were employee compensation agreements set in early 2008 to ensure that certain key personnel, deemed essential to reducing the massive default exposure AIG faced as a result of its wholesale CDS business. It seems that AIG saw the problem in early 2008 at the latest, possibly as a result of an internal audit review or other accounting analysis. The idea behind a "retention bonus" is to ensure that someone with "special knowledge" doesn't bail out and go to work for a competitor or freelance where the company regards their services to be needed. Thus, the employment contract is designed to do back-end loading of the compensation ... ensuring they don't leave in November, for example, by promising a payment in December. The arrangement also often includes certain 'technical' aspects that reduces the income tax exposure for the recipient.

Far too much of the ignorance-based rhetoric, both in the M$M and the 'tubes,' obfuscates the particulars of these arrangements. Of what I've read, about 95% is sheer hyperbole, supposition, and conjecture. Liddy was fairly clear, in his testimony, that there were NO performance bonuses being paid. He was virtually ignored ... probably because 'Stupid Rules!" in our political dialectic. People just don't fucking care about facts when the torches are lit and the mob formed.

It's understandable, of course, since this is a peek into a non-Euclidean Universe of compensation and corruption that very few have ever seen first-hand. As a fellow who spent decades in the "belly of the (multinational corporate) beast," many years as a management auditor and operational analyst tasked to turn over such rocks and count the maggots, this stuff isn't new to me. Sadly. I saw the massive corruption metastasize at the executive levels in the Fortune 10 over 25 years ago. It's a different world. Truly.


I agree that we'd benefit from seeing the specific employment agreements and a far more fact-based portrayal of the issue.