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.
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?
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.
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.
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.
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…
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
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 et al.
This was money AIG paid to meet its CDS obligations, which seems to be the reason AIG was bailed out.
And this would be a bad thing?
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.
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.
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.
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.
Maybe I’m just dense, but humor me.
Contract or not, shouldn’t these execs be fired for nonperformance, instead of being rewarded?
We’ll see if that holds. “Rich” and “safe” aren’t necessarily permanent conditions.
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.
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?
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.
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?
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?
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.