Imagine representing a company or person so reprehensible by the public that some days it feels like you’re standing between your client and an angry crowd bent on tar and feathering the person.
I imagine that’s what it’s like to work communications for AIG, which on Sunday said it will pay $165 million in bonuses to executives even though the government has poured $175 billion into the ailing firm to ensure it remains solvent.
And here is the company’s two-fold defense of the bonuses:
1. Blame the lawyers. In a letter to Treasury Secretary Timothy Geithner Saturday (read the letter), AIG Chairman Edward Liddy said outside lawyers told the company that if it didn’t make the payments, which were agreed upon last year, it could face lawsuit.
2. Cite retention and recruitment. Liddy also noted that the bonuses help AIG retain talent. If you don’t pay top executives what they’re worth they leave the company. Then again, part of the $165 million is going to executives in AIG’s financial unit, which is largely responsible for those credit default swaps—you know, the nasty things that helped spark the economic meltdown.
Where does the company go from here in terms of public relations? The letter to Geithner indicates that AIG's top 25 executives have agreed to annual salary in 2009 of $1. That could be a start, although probably one that will fall on deaf ears.
So is there any way AIG’s can improve its reputation? Only if the public gets to tar and feather one of the executives—and we're not recommending that.