AIG to Dole Out $165 million in Bonuses

Discussion in 'Free Speech Alley' started by paducahmichael, Mar 15, 2009.

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  1. paducahmichael

    paducahmichael Tiger Band Class of '73

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    But still needs taxpayer bail-out? Holy Cow! No wonder we're sinking. We're bailing and they're drilling holes in the bottom of the boat.

    Link:http://money.aol.com/news/articles/_a/bbdp/aig-bonuses/382732

    Note that there seems to be a legal requirement for these bonuses to be paid. Seems to me that those should be trumped by the company taking our dollars to save their own azzes!
     
    paducahmichael, Mar 15, 2009
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  2. red55

    red55 curmudgeon Staff Member

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    The talking heads on Sunday Morning talk shows are saying that everyone on both sides of the aisle are annoyed at this, but the government apparently doesn't have the authority to invalidate legitimate contracts in place with these executives. I'm sure that's true, but it seems that the government would have more influence than that, holding all of this bailout money. I mean, these guys wouldn't be getting any bonuses if their company had been allowed to fail. These are many of the people responsible for the failure.

    It seems to me that the bailout money could be made contingent on executives agreeing to new contract amendments that eliminate bonuses and golden parachutes. Some of the top executives have already foregone their bonuses and the rest of them need to see the light. They can always find themselves some greener pastures if they don't like the new terms.

    The Obama administration went to AIG and asked them not to do this, but it quickly turned into potential litigation and personal, corporate, and government lawyers descended on it. The lawyers are saying go easy, but this might be the time for Obama to play some hardball with AIG and the banks. Giant bonuses for failure is an issue with bipartisan concern and the republicans are unlikely to fight him on it.
     
    red55, Mar 15, 2009
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  3. SabanFan

    SabanFan The voice of reason

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    Don't look at me, I'm not getting any of it.

    FWIW, most of the execs responsible for the vast losses from credit swaps are gone.

    It's good to see that Red's on top of this though.

    Does it matter that this bonus money is about .02% of the amount approved for earmarks?
     
    SabanFan, Mar 15, 2009
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  4. houtiger

    houtiger Founding Member

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    Executive compensation is one of the big problems in this country. It stems from the corporate form of business organization. After the founder leaves, the bureaucrats take over. Then although the stockholders theoretically are the owners, and the board theoretically represent them, the new CEO appoints the board and they run the company for their personal gain. Its not true 100%, but the bigger the company, the truer it is.

    The compensation committee that approved a pay structure that guarantees a bonus regardless of performance of the company is stealing from the stockholders.

    We don't have all the details, and one acceptable explanation is this. The Financial Products division lost most of the money on derivatives. They should get nothing, and be fired. If the straight insurance division exceeded targets that would have triggered the payments, then they should get their bonus.

    Our company, we have 3 components of bonus, individual MBOs, Business Unit MBOs, and Corporate MBOs. At first line mgr. and below, its 60 ind., 20 BU, and 20 corporate. At VP level its 60 BU and 40 corporate. The CEO is 100% corporate attainment. So the bonus split varies by your role, and what you can reasonably contribute to.

    Under this system, the insurance unit guy could have collected 60% if they nailed the objectives, while missing the 40% corporate piece.

    If I was the insurance VP, I'd want and deserve my bonus.
     
    houtiger, Mar 15, 2009
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  5. Ch0sn0ne

    Ch0sn0ne At the Track

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    I don't believe you. You better throw a kickass tailgate party this year with your bonus money and invite everyone here.

    We'll be paying for it anyway.












    :hihi:j/k

    really though, can I have some of my tax money back?
     
    Ch0sn0ne, Mar 15, 2009
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  6. SabanFan

    SabanFan The voice of reason

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    Absolutely. While the media is sensationalizing this, I'd like to see more info about how this bonus money is being distributed. I've been with AIG for nearly 26 years and have received a modest performance bonus each of the past 16. In 2008, I got squat, mainly because of the perceived public perception. The company, however, was not contractually obligated to give me a bonus. It was budgeted but withheld simply because the public would howl if word got out. Sucks for me, but I have a job so I'm not complaining.

    So you tax dollar watchdogs keep on screaming. Meanwhile, back at the Oval Office...
     
    SabanFan, Mar 15, 2009
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  7. islstl

    islstl Playoff committee is a group of great football men Staff Member

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    The company suffered a 62 billion dollar loss in the 4th quarter of last year and you reward the highest management $165 million?

    ok.

    At least we know why you suffered a 62 billion dollar loss now.
     
    islstl, Mar 15, 2009
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  8. SabanFan

    SabanFan The voice of reason

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    Apples and oranges. No one is saying the execs in the money losing companies are getting bonuses (although some may be). Like I said, a lot of those villians have been fired. There are parts of AIG that made money last year, Commercial insurance, for example, but that's not news.
     
    SabanFan, Mar 15, 2009
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  9. red55

    red55 curmudgeon Staff Member

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    I follow your logic but public perception cannot be ignored. AIG is AIG. It is a slippery slope to reward the profitable insurance business just because the losses were piled up by the finance division. The bailout was vitally important, they said, to enable AIG to keep providing insurance. So the AIG divisions are completely entangled corporately and in the mind of citizens footing the bill. We don't get bonuses when we fail at our business, why should they?

    If AIG insurance and AIG Finance are to be considered separately, they should have become two companies. But instead it's one company receiving public support. The bonuses have got to go until they get profitable again and repay the government.
     
    red55, Mar 15, 2009
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  10. Ch0sn0ne

    Ch0sn0ne At the Track

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    That's like saying that we should go easy on the convicted murderer because he helped an old lady cross the street last year.
     
    Ch0sn0ne, Mar 15, 2009
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