What was that about private market efficiency?

I find little to argue with in this post on the absurdity of AIG executives receiving six- and seven-figure bonuses after the bailout. Instead I'll posit a broader ideological question: the libertarian idea of the free market goes that government programs are wasteful, and since the market is based on offering a better product for a better price, it would be best to leave large sections of utilities in the hands of private companies to make them better at less cost to everybody else. But how the hell do pre-negotiated bonuses that are in no way tied to actual performance an efficient use of money? It sounds an awful like a powerful elite skimming off an enormous profit for themselves, which is the whole reason economic liberals think regulation and accountability are good ideas in the first place.