# Bonuses For AIG **URL:** \ **Category:** The BBQ Pit\ **Created:** [March 15, 2009, 6:11pm UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541 "2009-03-15T18:11:24Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![Rand\_Rover](https://avatars.discourse-cdn.com/v4/letter/r/db5fbb/32.png) [@Rand\_Rover](https://boards.straightdope.com/u/Rand_Rover)\ **Post date:** [March 16, 2009, 1:52am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/61 "2009-03-16T01:52:26Z")
> [@elucidator](#): > > Oh, dear, **Bricker** , **Rand Rover** has come to your aid. I’m sorry, had I thought you would be subjected to such an embarrassment, I might never have started the thread. Though you frequently trod the path of political error, you are overall a pretty good egg (for a lawyer), and don’t deserve such a fate. Please, I haven’t come to anybody’s aid. I just came to point and laugh at you. I used to think that you stuck to the snide drive-by posts because you thought you were funny, but it is becoming increasingly more obvious that those types of post are all you have the intellectual capacity for. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [March 16, 2009, 1:54am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/62 "2009-03-16T01:54:54Z")
Further update from TPM: the amount that went to Goldman Sach by way of AIG’s bailout is about $13 billion. This is a big deal, apparently. Anybody know why? Bueller? ---
**Author:** ![Ocean\_Annie](https://avatars.discourse-cdn.com/v4/letter/o/8797f3/32.png) [@Ocean\_Annie](https://boards.straightdope.com/u/Ocean_Annie)\ **Post date:** [March 16, 2009, 2:01am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/63 "2009-03-16T02:01:10Z")
> [@Bricker](#): > > Now, I have performed X. That’s what the company agreed to pay me. In fact, I took a lower base salary because I knew I could meet ‘X’ and get the bonus. > > Now the management has screwed up royally and had a choice between declaring bankruptcy and asking for federal aid. If they declare bankruptcy, they can avoid paying their legal obligations, and that includes the money they owe me. But that will mean they have top fire a lot of people, and many more people will lose money invested in and through the company. It’s to avoid this that the government gives them bailout money. > > So, with the bailout money, they are supposed to pay their legal obligations. On what basis do you now contend that they can avoid paying me? **Bricker** , why are large corporations allowed to renege on employee pensions and salary obligations when they restructure under bankruptcy? The airlines are a good example. After the corporation restructures and confiscates pension funds, the CEO is given a multimillion dollar bonus and employees get new contracts for lower salaries and a substantially lower pension or no pension. Now the public watches AIG. Although it hasn’t officially filed bankruptcy, AIG is bankrupt; its stock is worthless. AIG can’t be saved, yet public funds continue to be used for large executive bonuses. Not only is this a double standard, it is looking more like a well planned fraudulent bankruptcy for profit scheme. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [March 16, 2009, 2:40am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/64 "2009-03-16T02:40:54Z")
> [@elucidator](#): > > Now, if that is the case (and I don’t know that it is) then the question naturally arises as to why the exception was made. On whose behalf, on who’s authority. That sort of thing. I’d guess that by the time the shit hit the fan, the bonusing and compensation structure was likely a mishmash of things over which no one person could be said to have had responsaibility. The company I work for has 100 employees and they’ve been wrestling with creating a bonus system for a YEAR now. I cannot even beging to imagine how screwed up in can get in a company as large and complicated as AIG. I’m not a fan of bonus systems even in GOOD, healthy companies. > [@](#): > > Further update from TPM: the amount that went to Goldman Sach by way of AIG’s bailout is about $13 billion. This is a big deal, apparently. Anybody know why? Bueller? I’m just making an educated guess but it probably relates to the fact that Goldman Sachs gave its executives and managers about TWELVE BILLION DOLLARS!!! in bonuses just a few months ago, but after accepting bailout money. They’ve bonused out all the bailout money they got. Compared to Goldman Sachs, AIG are practically Franciscan monks. Goldman Sachs legitimately used bonus money as a raid opportunity. ---
**Author:** ![Typo\_Negative](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/typo_negative/32/484_2.png) [@Typo\_Negative](https://boards.straightdope.com/u/Typo_Negative)\ **Post date:** [March 16, 2009, 2:46am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/65 "2009-03-16T02:46:59Z")
> [@Bricker](#): > > So, with the bailout money, they are supposed to pay their legal obligations. On what basis do you now contend that they can avoid paying me? My answer would be "Because we do not have the money for _that_ right now’. I will be the first to admit that I do not understand the situation. But isn’t the bailout money meant to keep the company afloat so that they may live up to financial obligations \*to their \*_customers_? If AIG owes the money, then they owe the money. Those bonuses should be differed. If AIG survives, they should pay it. But I believe that AIG executives should be the last in line to recieve what’s owed to them. Their customers should come first. Not that I think that will happen… ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 16, 2009, 2:49am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/66 "2009-03-16T02:49:49Z")
> [@elucidator](#): > > An update from _Talking Points Memo_ (links within) > > [http://www.talkingpointsmemo.com/archives/2009/03/a\_glimmer\_into\_aig.php](http://www.talkingpointsmemo.com/archives/2009/03/a_glimmer_into_aig.php) TPM also updated the bonus info. It turns out that $450 million (vs $165 million in the OP) of bonuses went to AIG’s Financial Swindlers Division, with $1.2 billion going to bonuses across the whole company. [http://www.talkingpointsmemo.com/archives/2009/03/just\_gets\_worse.php](http://www.talkingpointsmemo.com/archives/2009/03/just_gets_worse.php) > [@RickJay](#): > > Goldman Sachs legitimately used bonus money as a raid opportunity. That’s why we need an FDIC-style rescue of the big insolvent firms, sometimes called nationalization. Otherwise taxpayers will continue to drip in funds to institutions that won’t lend but will be raided by their managers. Experts on financial crises are familiar with this sort of looting: see [Simon Johnson](http://baselinescenario.com/2009/03/05/confusion-tunneling-and-looting/) et al. ---
**Author:** ![Ocean\_Annie](https://avatars.discourse-cdn.com/v4/letter/o/8797f3/32.png) [@Ocean\_Annie](https://boards.straightdope.com/u/Ocean_Annie)\ **Post date:** [March 16, 2009, 3:09am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/67 "2009-03-16T03:09:02Z")
> [@elucidator](#): > > Further update from TPM: the amount that went to Goldman Sach by way of AIG’s bailout is about $13 billion. This is a big deal, apparently. Anybody know why? Bueller? This was money AIG paid to meet its CDS obligations, which seems to be the reason AIG was bailed out. ---
**Author:** ![Frostillicus](https://avatars.discourse-cdn.com/v4/letter/f/e9bcb4/32.png) [@Frostillicus](https://boards.straightdope.com/u/Frostillicus)\ **Post date:** [March 16, 2009, 3:17am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/68 "2009-03-16T03:17:17Z")
> [@](#): > > I am in the industry and AIG’s talent is being decimated. From the mid level, I would say most is already gone. At the higher level I can’t comment as much, but I don’t see why it would be different. People are leaving as quick as they can because there is just no reason to stay. And this would be a bad thing? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 16, 2009, 3:47am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/69 "2009-03-16T03:47:12Z")
I guess making a few million just does not keep good people any more. I read that some bosses secretaries were getting 200 K plus. They rewarded themselves lavishly for setting up a system that paid trillions. Somewhere down the line they confused earning and looting. They also confused earning money for doing a good job with personal entitlement. Their sense of importance and value is distorted.Screw them. ---
**Author:** ![Sailboat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sailboat/32/461_2.png) [@Sailboat](https://boards.straightdope.com/u/Sailboat)\ **Post date:** [March 16, 2009, 4:03am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/70 "2009-03-16T04:03:08Z")
> [@fruitbat](#): > > Do you really know who these people who blew up our economy are? They are likely mild mannered math nerds who build computer models in attempts to understand what happens to a bundle of securities if variable x,y or z changes. In whose universe do mild-mannered math nerds building computer models get huge bonuses? I’m sure some of these hypothetical math nerds _worked for_ the executives getting the bonuses. ---
**Author:** ![Rick](https://avatars.discourse-cdn.com/v4/letter/r/9f8e36/32.png) [@Rick](https://boards.straightdope.com/u/Rick)\ **Post date:** [March 16, 2009, 4:13am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/71 "2009-03-16T04:13:47Z")
> [@spooje](#): > > My answer would be "Because we do not have the money for _that_ right now’. > > I will be the first to admit that I do not understand the situation. > > But isn’t the bailout money meant to keep the company afloat so that they may live up to financial obligations \*to their \*_customers_? > > If AIG owes the money, then they owe the money. Those bonuses should be differed. If AIG survives, they should pay it. But I believe that AIG executives should be the last in line to recieve what’s owed to them. Their customers should come first. > > Not that I think that will happen… Think about it for a minute. You are an employee or manager for AIG. You have contract that says if you do X you will get a bonus of Y. You did X and the company says We don’t have the money right now. Do you A) Say that’s OK, I don’t mind or B) Hit the speed dial for your lawyer and sue AIG’s ass? When it gets to court you testify that you were promised Y if you did X. You produce evidence that you in fact did X. AIG on the other hand has bupkis. Now they will have to pay the bonus, plus attorney’s fees, and court costs. There will be a pit thread on the Dope about why didn’t those idiots at AIG just pay the bonuses instead of making all of these attorneys rich with our money. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [March 16, 2009, 4:22am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/72 "2009-03-16T04:22:08Z")
**Rick** : I think a lot of the outrage comes from the perception in the public at large that the bonuses are being paid to fat, wealthy board members who are directly responsible for AIG’s failures, don’t deserve the money, and who, as top dogs, could easily waive the bonuses if they wanted to. If employees and managers are getting bonuses to the tune of that many millions, AIG sure isn’t doing a very good job in letting people know that. ---
**Author:** ![SteveG1](https://avatars.discourse-cdn.com/v4/letter/s/bb73d2/32.png) [@SteveG1](https://boards.straightdope.com/u/SteveG1)\ **Post date:** [March 16, 2009, 4:26am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/73 "2009-03-16T04:26:42Z")
> [@Rubystreak](#): > > Except that, according to [this article](http://news.yahoo.com/s/ap/aig_bonuses), the bulk of the bonuses are going to the Financial Products division, “the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.” So the guys who contributed to fucking their company and our economy are the ones getting paid with our money. I understand that AIG is contractually obligated to pay these bonuses, but I can’t help but get a sickeningly angry feeling when I think about it. Maybe I’m just dense, but humor me. Contract or not, shouldn’t these execs be fired for nonperformance, instead of being rewarded? ---
**Author:** ![Snowboarder\_Bo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/snowboarder_bo/32/229_2.png) [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)\ **Post date:** [March 16, 2009, 4:35am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/74 "2009-03-16T04:35:16Z")
> [@gonzomax](#): > > Running margins of 30 or 40 to 1 is not higher mathematics. It is exposed risk. Then selling swaps on the same products just elevated the risk a few more levels. It was greed with risk taking on a new scale. > The problem was that people were allowed to risk their own money before. Now financial leaders shoot craps with the companies they worked for at stake. That is not the basis for a sound economy. **The beauty is that the execs walk away rich and safe**. We’ll see if that holds. “Rich” and “safe” aren’t necessarily permanent conditions. ---
**Author:** ![Richard\_Pearse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/richard_pearse/32/13144_2.png) [@Richard\_Pearse](https://boards.straightdope.com/u/Richard_Pearse)\ **Post date:** [March 16, 2009, 4:45am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/75 "2009-03-16T04:45:07Z")
As someone who receives a retention bonus, I’d be right pissed off if I discovered I wouldn’t be getting it and the company wasn’t filing for bankruptcy. It really doesn’t matter what these people who’re receiving bonuses may or may not have done, as long as they’ve fulfilled the terms of their contract then they must be paid in accordance with their contract. If you think the contract sucks then fine but there is really no reason why anyone should not get paid what they signed up for unless they’ve not met their own obligations. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [March 16, 2009, 5:08am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/76 "2009-03-16T05:08:05Z")
AIG was going down. They were bankrupt . They would have all lost their jobs. They would have received zero bonuses. That would have been right and proper considering the damage they did. But when Paulson and Bernanke decided AIG was too big to fail ,you would have thought they would have been satisfied with keeping their overpaid jobs. But nope, once they figured we actually believed they were so important, they shifted into entitlement gear and took another run at looting. This will not be their last shot at grabbing as much as they can carry. They were huge components in the downfall of the entire worlds financial system crashing. How big a bonus does that merit? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 16, 2009, 5:46am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/77 "2009-03-16T05:46:00Z")
> [@RickJay](#): > > There’s a bad side to that, though. Writing bonuses with too much contingency on company performance can cause the company to “adjust” corporate performance so as to avoid paying bonuses. Having worked for a company like that, I can tell you it deson’t feel good to know they’re cooking the books to hump you out of your money. > > I don’t feel bad for the rich guy getting richer, but let’s not screw some schmoe out of money he could use to put his kid through college - money he’s fairly owed. A public company? It’s hard for me to believe that a CEO would trash the companies stock price for this reason. Execs bonuses are often tied to the same kind of thing, so they’d lose out also - at least in the honest companies I’ve worked for. On the other hand, layoffs and bonuses do sometimes go together. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [March 16, 2009, 5:54am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/78 "2009-03-16T05:54:25Z")
[quote=“1920s Style “Death Ray”, post:75, topic:489541”] As someone who receives a retention bonus, I’d be right pissed off if I discovered I wouldn’t be getting it and the company wasn’t filing for bankruptcy. It really doesn’t matter what these people who’re receiving bonuses may or may not have done, as long as they’ve fulfilled the terms of their contract then they must be paid in accordance with their contract. If you think the contract sucks then fine but there is really no reason why anyone should not get paid what they signed up for unless they’ve not met their own obligations. [/QUOTE] So if your division pushed your company into insolvency, but the company was rescued at the last minute from bankruptcy by the taxpayer, you think you deserve your _performance bonus_? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 16, 2009, 5:56am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/79 "2009-03-16T05:56:35Z")
> [@SteveG1](#): > > Maybe I’m just dense, but humor me. > > Contract or not, shouldn’t these execs be fired for nonperformance, instead of being rewarded? Well you see, the criteria was that they climbed to a certain level. That the platform they used was a house of cards, which collapsed ten seconds after they reached it has nothing to do with it. It’s a sweet system. If the company is making money, these guys deserve their bonuses. If the company is losing money, only these guys know enough to save it, so they still deserve their bonuses. Got it? ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 16, 2009, 5:59am UTC](https://boards.straightdope.com/t/bonuses-for-aig/489541/80 "2009-03-16T05:59:44Z")
[quote=“1920s Style “Death Ray”, post:75, topic:489541”] As someone who receives a retention bonus, I’d be right pissed off if I discovered I wouldn’t be getting it and the company wasn’t filing for bankruptcy. It really doesn’t matter what these people who’re receiving bonuses may or may not have done, as long as they’ve fulfilled the terms of their contract then they must be paid in accordance with their contract. If you think the contract sucks then fine but there is really no reason why anyone should not get paid what they signed up for unless they’ve not met their own obligations. [/QUOTE] So, if your company is losing scads of money, and laying off people, and your division is responsible, the morally correct position is screw them all, I deserve mine? You are fine CEO material in the American financial sector, my friend. [Previous page](https://boards.straightdope.com/t/bonuses-for-aig/489541.md?page=3) [Next page](https://boards.straightdope.com/t/bonuses-for-aig/489541.md?page=5)