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Who are all the stakeholders in the decision to pay bonuses

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Case Study B2

No part of the financial market collapse of late 2008, and the government bailout that followed, caused as much public outcry as did the financial bonuses and compensation paid to senior executives of failed companies. The listed company, American International Group (AIG) became the target of much of this criticism. Persuaded that AIG was "too big to fail", by March 2009 the U.S federal government had committed $180 billion dollars to rescue AIG from bankruptcy. In early March 2009, AIG announced that it was paying $165 million in bonuses to 400 top executives in its financial division, the very unit that was at the heart of the company's collapse.

AIG cited two major factors in the defence of these bonuses: they were owed as a result of contracts that had been negotiated and signed before the collapse, and they were needed to provide an incentive to retain the most talented employees at a time when they were most needed.

Required:

Problem 1: Who are all the stakeholders in the decision to pay bonuses to AIG executives? Explain.

Reference no: EM132920519

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