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I saw on the news this morning that AIG was insisting they still needed to pay their executive bonuses for a variety of reasons. One was that the bonuses were parts of previously negotiated contracts. If they were not paid, they might be sued and the legal expenses would exceed the bonus amounts. I can sort of give them that.

But, another was that they might lose these executives to competitors if the bonuses were not honored. I suppose it would be tragic to lose the executives responsible for guiding your firm to financial catastrophe to your competition. To use a sports analogy, you would really hate to lose the coach who led your team to a 2-28 record to another team in your conference.

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