Last year, in the midst of the credit crisis, the US government rescued AIG from the brink of collapse with a loan bailout in the amount of $182.5 billion.  In exchange, the government assumed an 80 percent stake in the insurer.

AIG is one of the big companies that the Treasury Department ordered to cut top executives’ salary and bonuses.  Reports are that the directive is to cut compensation in half, starting immediately. Cash salaries for the top 25 highest-paid executives will be capped at $500,000 and perks will max out at $25,000.  There are exceptions of course, but no one is holding their breath.  Good.

CEO Robert Benmosche is threatening to take his marbles and go home.  Evidently, he is not keen on working with heavy government oversight and restrictions on pay.  Benmosche reportedly told AIG’s board he was "done" with the job; however, like a cheap soap opera, it appears that he is reconsidering once he realized that the board was not amused.

Critics argue that the restrictions are bringing about so-called brain drain, as the executives hit by salary and bonus caps are abandoning ship and seeking refuge elsewhere.  On the one hand, I can’t say that I blame them.  On the other hand, perhaps in some twisted and ironic way, I’m glad that AIG may not completely survive after all; once all the pay restrictions are enforced, AIG may end up being a shell of its old self, devoid of the so-called talent who can’t be bothered with taking responsibility for their company’s rather disturbing contribution to the ugly global recession we now find ourselves in.  Oh no, those talented boys and girls won’t slow down in their quest for the almighty dollar.

Perhaps the epilogue will note how, despite taxpayers being saddled with cost of rescuing irresponsible institutions, said institutions failed anyway.  Should that happen, then the real loser will be the taxpayers.  Entities fold, their employees move on to commit financial atrocities elsewhere, but the taxpayer is left holding the bag.  And their children will be responsible for paying the debt in the future.  So tell me, why did we bother saving all these greedy ingrates to begin with?