The government has set out some measures, but AIG should be tougher than that. This would demonstrate a sense of culpability on the part of the company for the fact that the situation it is in is of its own making. A major component of the public's offense is that it feels cheated in the deal. Taxpayers, many of whom are feeling the sting of economic hardship themselves, are insulted that they have been called upon to bailout a company that then pays six and seven-figure bonuses to its executives. Most of the people contributing tax dollars to those bonuses will never see money like that in their lives. Liddy has the luxurious advantage of not being directly responsible for the AIG mess. He needs to be fully sympathetic with the public on this issue -- they are the taxpayers for whom he works.
Q3. Internally, such contrition may not sit well. AIG employees may feel like the leader who was airlifted into the company by the government is now throwing them under the bus. Regardless of whether or not they deserve it, there is little doubt that morale will be affected. With respect to morale, Liddy should not be too concerned. His position is that of a hatchet man. His job -- as mandated by the government -- is to fix the problems at AIG. He actually has little responsibility to the employees at AIG beyond the role they will play in the firm's recovery. His role is thus simply to lay out the facts -- they are owned by the government and significant work will be undertaken in order to restore the company. The employees can either get behind that effort or they can bring the company to its knees.
Liddy need not worry about employees not performing in their jobs for a couple of reasons. One is that most employees are not significantly motivated by money anyway. Most employees are motivated by higher order needs. They are probably embarrassed by both the government takeover and the bonus scandal, as employees at MCI were similarly...
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