3.06. (a) Effect of Mark-to Market Losses on the bonus Pool. The Bonus Pool for any Compensation Year beginning with the 2008 Compensation Year will not be affected by the occurrence of any mark-to-market losses (or gains) or impairment charges (or reversals thereof) arising from the (i) the CDO Portfolio or (ii) super senior credit derivative transactions that are not part of the CDO Portfolio.
(b) Effect of Realized Losses on Bonus Pool. The bonus pool for any Compensation Year beginning with the 2008 Compensation Year will be affected by the incurrence of any Realized Losses (or gains) arising from any source, subject to the limitations set forth in 3.07.
Now you know why AIG had so much unrealized losses.
It didn't affect their bonus!
Only realized losses did!