Executive Bonuses Reprised
Everyone wants to know how companies likes AIG can give out huge bonuses while taking bailout money. AIG says they are contractually bound to pay out. What can we possibly do about contracts that were signed before the bailout? That?s easy.
Corporate entities hire executives for the benefit of the corporation, not the executives. Sure, the executives take the job out of self interest, but that is secondary from the point of view of the corporation.
What happens if the executives get together and decide to take large amounts of money from the corporation in a way that is against the interest of the corporation? Normally we would consider this a conspiracy to embezzle. That?s neither ethical nor legal.
So what happened with these contractual obligations that take huge amounts of cash from an ailing corporation and give it to executives who fostered the ailments? That?s almost as bad as the relatives cutting the oxygen on the elderly uncle to encourage the inheritance. Again, this would be illegal and unethical.
Now we just have to get the federal authorities to look at it this way. After a few of these executives get jail raped, the rest are sure to get in line a little better.