Saturday, November 12, 2011
Remember the outrage from the administration over hefty bonuses paid to AIG executives in 2009? Back then, shortly after AIG was bailed out by American taxpayers, the company went through with already planned bonuses to top executives.
The bonuses, which totaled $165 million, sparked a hot national debate over how much freedom private companies should have to pay large bonuses after they had become dependent on taxpayers. The House and Senate passed measures calling for the taxing of executive bonuses for bailed-out companies to the tune of 70-90 percent.
The president reacted forcefully: “”[I]t’s hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. How do they justify this outrage to the taxpayers who are keeping the company afloat?”
Last week, another set of bonuses for bailed-out companies got decidedly less bad press. Fannie Mae and Freddie Mac, to whom taxpayers have already given hundreds of billions, doled out $12.79 million in bonuses to its executives for meeting modest goals.
One could argue that there’s no outrage from the administration over the Fannie and Freddie bonuses because the total amount of bonuses is so much smaller.
But in fact, the average executive bonus is far larger.
Fannie and Freddie spent $12.79 million on 10 bonuses for an average of $1.27 million per bonus.