When the best and brightest bring you to bankruptcy, no PR in the world can clarify how such "performance" is worthy of a bonus.

If your company can exist only with a massive infusion of federal money, you're crippled in ways that move you well beyond competitiveness. These brains didn't keep AIG solvent in the first place and it is impossible to understand how retaining them has any value at all. It's that riddle wrapped in a puzzle no one's been able to figure out.

And are there really people who think that bonuses are the only thing keeping these execs at AIG? Aren't the best and brightest desperately looking to get jobs at financially secure companies - all those many financial firms with CEOs claiming they didn't need TARP payouts? Apparently, there are MANY of those companies in the financial industry for these exceptionally entitled people to seek out.

The AIG debacle showcases the issues surrounding TARP, which was devised to rescue/prop up/support companies that would otherwise to shuttered. Propping up dead companies, as TARP has done, is only prolonging the pain.

So to say the PR guy at AIG can straighten this up with some well-written press releases or by getting Liddy on The Tonight Show - AIG's problems are WAY beyond that now.

J.G.,

How can you compare AIG to Enron? You either are too young to have been around during Enron or you only know the name but not the details of Enron.

Enron was the corporate version of Madoff. It was an energy Ponzi Scheme and the scammers behind it went to jail, Arthur Anderson went out of business because of its negligence, and the SEC introduced a slew of new regulations tied to SARBOX.

To date, AIG is only guilty of being too big to be allowed to fail (at least according to the politicians, but I disagree), and taking the bailout money with no strings attached as promised by all of those politicians. There's nothing illegal or deceptive about what the company did.

The bonuses? Bad PR move, I think, but not illegal and totally encouraged by Sen. Dodd and Obama's people until the bonuses didn't pass muster in their focus groups and polls.

Here's something else you should know. Hank Greenberg, the long-time leader of AIG who really grew that firm and did an excellent job, was squeezed out about three years ago by none other than Elliott Spitzer in a personal vendetta. No charges were ever brought against Greenberg who happened to be a big Republican supporter. Since Greenberg's departure, the company fell apart. So to explode yet another myth, good CEOs really do matter and are worth the big bucks they are paid.

To recap, cause and effect - Greenberg gets victimized by Spitzer and loses his job. His company AIG goes downhill. The mortgage mess triggers economic collapse. AIG loses value. In 2008, the politicians decide rather than let AIG sort out its problems in bankruptcy, give it say $170 billion in bailout money. In Jan. 2009, Sen. Dodd decides those bonuses are worth protecting, so he (under direction from Obama admin.) decides to put language in the $700-plus billion stimulus bill solely to protect AIG bonuses. AIG goes ahead and doles out the bonuses, trusting that their new friends in Washington will give them cover. The focus groups and polls tell the Washington snakes that they're about to get nailed on the bonus issue, so they pre-emptively launch an attack on those nasty executives at AIG. A McCarthy-style witch hunt ensues. The current New York AG Cuomo decides he's going to "out" all those who receive bonuses at AIG. Barney Frank says he wants names and they all say they're going to penalize recipients by taxing their bonuses at 93%.

The politicians protected their butts. Liddy, the federally appointed CEO of AIG is toast, a scapegoat for Dodd and friends. And Timothy Geitner is next up on the chopping block.

Meanwhile, Bat Fans, over at Fannie May and Freddie Mac, the bonuses are flowing like water. They got saved by the taxpayer, too, you know. But we aren't to mention that.

Bottom line is you can't put AIG and Enron in the same category, other than both had troubles. You should thank me for the history lesson.

There's no way that AIG can improve its reputation after this mess. The damage is already done. Plus, even if they try to turn things around, the media will never let them live this down, and rightfully so. They are the poster child for this entire economic meltdown. I just wonder who else will be added to the list before it’s all said and done.

Breaking News: Dodd Says loophole that protects AIG Bonuses added per request of the Obama administration. The video is about a fifth of the way down.

http://www.butasforme.com/2009/03/17/obamas-stimulus-bill-explicitly-grants-aig-the-legal-right-to-hand-out-bonuses/

Obama should take full and direct responsibility for this mess.

Nope. Much too late. AIG is the Enron of today.

It's as simple as understanding how to handle your car if you start skidding right. You're not supposed to overcorrect left; you'll completely flip.

I say they give it all back to the tax payers. $165 million/roughly 138 million US taxpayers = $1.20 each. That's a drip coffee at Starbucks.

Senator Dodd is getting pass here and allowing the AIG execs to take the heat. The quick answer, though is, "No," PR can't make this positive for AIG, and it does not appear the company deserves good PR. But in the interest of really knowing more about how all of this came to be, you cannot ignore Senator Dodd's role.

Here are the facts: Just last month when the $787 billion stimulus plan was passed (Remember the President did not want to give anyone time to read it?), Senator Dodd decided to add an executive-compensation restriction to the bill. His change provided an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009.” In other words, he purposely exempted these bonuses that he clearly knew about at the time. His amendment was included in the final bill that was passed and never read.

By the way, Senator Dodd was AIG’s largest single recipient of campaign donations during the 2008 election season. He received $103,100 from AIG. Should he return that money? To verify this, check out opensecrets.org.

There is no way to spin this into a positive story. An open presentation of the issue and resonable availability to the media is the best course for AIG's PR staff. It may not be pretty but at least you'll get credit for not attempting to hide the ball.

The answer to the headline is, "No." PR does not change reputations. Behavior and performance does, supported by strategic, ethical PR and communication.

There's no PR possible if the client has a deaf ear to the public moood. The defense of "this is the way compensation has always been done in this industry" sounds pretty lame against "times have changed, and your business model should, too."

After all, auto workers have contracts, too. But the UAW has shown a lot more flexibility with their contracts than the financial sector.

In PR, we know that every action has to be looked at from the point of view of every type of stakeholder. AIG has failed to realize that every taxpayer in the US is now a stakeholder.

And what many of them are no doubt wondering is why most of this "talent" weren't escorted out of the building by security with their personal belongings in a cardboard box.

Nobody in the normal world understands the complex relationship between AIG and the survival of the US banking system that earned them the bailout. I sure don't. But normal people sure understand what a bonus is - and the circumstances under which paying them is insane. And that's why everyone's so angry. I'd be very surprised if PR could make any difference at all. I used to live in a community where AIG was a big player/employer and they were hard to like, even then.

To Ron's point,consider this. The whole bankruptcy process was designed to sort out all of these issues, calmly and through a process. It's called Chapter 11. If AIG had filed for Chapter 11 protection, the bonuses would have had to be approved by a bankruptcy court judge. If the bonuses were paid prior to Chapter 11, at some point, the debtor would sue each recipient of the bonuses for a refund challenging whether those bonuses were given "in the normal course of business." And best yet, bankruptcy would have wiped the slate clean and given AIG a chance to regain its footing without one cent of taxpayer money. Yes, the company would have suffered some serious shrinkage, but isn't that what's happening now, even with the 100-plus billion in taxpayer money given to AIG? And keep in mind, the politicians insisted just a few months ago that the bailout funds had to be given with "no strings attached" to allow the bailout recipients the flexibility they needed to recover. To me "no strings" means that as poor a PR problem as this creates, AIG had every right to run their business as they saw fit, not as how a bunch of politicians and federal wonks see fit.

I'm torn here. I hated the bailout and would have preferred bankruptcy. I have no sympathy for the top execs at AIG and feel the PR is terrible. Yet, the situation we have now was created by none other than Henry Paulsen & Co., with the full endorsement of the former president and at the time both the Republican and Democrat candidates and their parties. Washington should be defending its ability to turn a pile of dog #$#@Q into a mountain of dog $^%%^$#.

And these are the people who want to take over the auto industry, and then healthcare?

AIG = Allowing Irreversible Greed.
AIG = All in Greed.
AIG = Arn't I Greedy.
AIG = A$#holes, in general.

This is sick. Why in the world are we helping these companies that keep sending millions to people who do not know how to run a company? They cry yet get paid millions on the "average joes" taxes. Furthermore, I fear this is just the tip of the iceberg. Look what Enterprise rent-a-car did to get bailout funds:

http://www.butasforme.com/2009/02/25/alert-enterprise-rent-a-car-may-have-fired-employees-as-fake-evidence-when-lobbing-for-bailout-money/

Not to make excuses for these people, but the bailouts are making crooks out of everyone that touches the money.

The bonus payout excesses at AIG are just the tip of the iceberg of what is happening with the other Wall Street bailouts including Bank of America. Working productive Americans are bailing out the same crooks that destroyed our economy along with 45% of the wealth in the world and now the American taxpayers and our children will be forced to live a far lower standard of living with reduced prosperity and opportunities due to this but only we pay the price.

Washington has bailed out the banks, Wall Street & their Washington special interests and much of the cost is added to the national debt to by paid by this and future generations while real estate and investments continue to fall. Find out what a growing repudiate the debt movement could mean for treasuries, the dollar, gold and the stock market and how this is a better alternative than Washington’s plans to monetize the debt in future years and tax and destroy our remaining wealth by depreciating the dollar.

The Campaign to Cancel the Washington National Debt By 12/21/2012 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts

Does anyone remember Arthur Anderson? AIG is following the same path. It hasn't been indicted yet, but that's about the only thing that hasn't happened to AIG's reputation.

The only thing that might improve things is if an AIG division split off and became its own renamed entity, such as Accenture.

The only damage control for that would help AIG's image with regard to these bonuses would be for those individuals slated to receive the bonuses to turn them down, which isn't likely.

"If you don’t pay top executives what they’re worth they leave the company."

Would they leave?

Given the growing number of layoffs in the industry, the market for out-of-work financial executives is not very good. Slim pickings for overpaid executives who think they can do better.

What's more, if AIG is a half-way decently run organization, they should have groomed a bumper crop of talented rising stars, many of whom would be capable of moving up and filling the slots vacated by those who choose to leave. Given the performance of their executives, that sounds like the way to go.

Bottom line: Even the best PR may not be enough if AIG doesn't have some strong factual points to make about its practices and performance.

PR at AIG? This is not a job for the faint-hearted.

Liddy's letter to the treasury contradicts itself. If on one hand he claims bonuses retain talent then does that mean the 25 executives receiving only $1 salaries in 2009 aren't worth a dang?