Multilingual Business Communication

March 21, 2009

AIG apologizes for misusing government’s money

Filed under: Aagje Verbogen, crisis communication — meertaligebedrijfscommunicatie @ 8:25 pm

In an open letter to the Washington post, the American insurance company AIG apologizes for the mistakes it has made. Edward Liddy, head of AIG and author of the letter admits that the company has used the government’s money to “reward” its top executives with large bonuses. The government aided the largest insurance company in the world four times, but the money was shamelessly abused: of the 170 billion dollars that the company received, 165 million was used to pay its executives.

This caused a lot of protest in America and President Barack Obama reprimanded the company. I think that we can all agree with Max Baucus, a Montanta Democrat, that “Millions lost their jobs; it’s an outrage that the people who somewhat caused this problem are now paying themselves bonuses.” Liddy thinks that the American people are right to be appalled and says that he feels the same. However, he claims not to be responsible for the exorbitant salaries.

The American Chancellor of the Exchequer, Timothy Geithner, has ordered AIG to repay the 165 million dollars, and rightly so. “We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company the amount of the retention awards just paid,” Geithner said. If AIG refuses, the government will consider rising taxes to recuperate the bonuses.

aig1 edward-liddy1
Source: Metro n° 1866, Thursday 19 March 2009

Aagje Verbogen

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2 Comments »

  1. AIG’s way of handling a money is by far a good example but as Peter Tasker from Global Investor says in the Newsweek: “Bonuses Don’t Create Bubbles”. Exaggerated golden handshakes and golden parachutes are a no-go area after the crisis but it is unrealistic to think that they were part of the cause of the financial crisis in the first place. Still, a thorough check-up on financial rewards to top managers needs to be put into place soon in order to make sure borrowed money is well spent and society can start rebuilding itself.

    Aisling van Vliet

    Comment by Aisling van Vliet — April 2, 2009 @ 2:07 pm

  2. Apologizing for your mistakes really has a positive influence on your image. According to reports, studies have shown that doctors who apologized for the mistakes they had made, have less risk to be sued. This may be a hint that CEOs of banks that made great losses can think about.

    http://www.directorship.com/should-ceos-apologize-

    Frauke De Graeve

    Comment by Frauke De Graeve — April 11, 2009 @ 7:46 am


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