Oh, the Irony...

[midtennchip]

For those of you more interested in the real story than just the media sound bites, this whole issue is much more complex than is being discussed in this thread. First, the financial services industry has always paid a significant portion of employee pay in "bonuses." These payments are enforceable in court and the liability for not paying them is at least 3 times the amount of the bonuses themselves.

Second, there is nothing in the legislation (the American Recovery and Reinvestment Act of 2009, a/k/a the Stimulus Bill) that prevents bailed out financial institutions from increasing base pay to make up for the loss of "bonuses." I think it's funny people (including the idiots in Congress and Treasury) are screaming about "bonuses" when the companies could easily change the pay structure. If they do so, the employees get paid regardless of any outcomes or length of continued service. The fact they are called "bonuses" should be that big of an issue.

Third, AIG is a very large and diversified company. Only a small number of the operating units are really responsible for the financial problems. A lot of the employees getting the bonuses are life insurance sales people, mutual fund sales people, and the like (all of which did exactly what they should have done). But, they are thrown in with the few people that actually caused the problem.

Then, you have the potential issues with the idiotic tax scheme proposed this week:

http://www.ft.com/cms/s/0/4ff2f77e-1584-11de-b9a9-0000779fd2ac.html

Yes, I agree with everyone here that some heads should roll at AIG (if they haven't already, since some of the bad apples are already gone). But, be careful in lumping all of the AIG folks into the same category. The real issue is the Treasury and now Congress. They knew about these problems BEFORE investing the TARP money. IMO, they are the ones that really need to be held accountable.

Edited March 21, 2009 by midtennchip

[fury2neon]

And to make matter worse it will tax everyone's bonuses. So if you get a "bonus" this year it will be taxed at 90%.

They are just taking this money from you to help those who are not as fortunate as you... yeah right.

[Guest grimel]

OK. But why would you want to retain people who ran the company in the ground?

They do not deserve the money. Plain and simple.

Yes, they do. They have a contract stating they get the money. End of story.

[creeky]

Yes, they do. They have a contract stating they get the money. End of story.

Exactly!

[enfield]

it amazes and disgusts me that so many otherwise normal-seeming people are in favor of the government not only funding failing companies with tax dollars, but also in favor of the government interfering in compensation agreements between private companies and their employees.

The world they want, the world in which such occurrences are commonplace and accepted, is a nightmare world.

It reveals a sad lack of education in civics, economics and history.

Suggested reading: We the Living, by Ayn Rand.

[Guest m&pc9]

Yes, they do. They have a contract stating they get the money. End of story.

Can you get me a copy of that contract?

The problem I have with this lump of is: Our elected leaders have given all these companys a large sum of our money. My tax dollars are being pissed away by these asses that are in charge. Yes I do have a problem with companys that take bailout money and then take all the upper management to Vegas on my dime. And also when they take my money and give it to the POS that ran the company in the ground, so they wont quit and go to work for someone else. I guess that saves us money from having to bail out another company.

Believe me, I dont want the gooberment telling the private companys what to do and how to pay people. But when they (CEOs) stick their greedy paws out for a hand out (of my money) I think they should use it wisely.

And yes I do get pissed when I see people abuse welfare and disability.

I run my own company and if it doesnt make money I dont get paid. Do you think I can get a bailout. About 10 mil. will hold me over a few weeks unless I go to vegas.

[BrandonTN]

The AIG bonus were not performance bonuses but retention bonuses. They agreed to continue working for AIG as they closed out their departments and would wait till they had closed out their departments (ending their jobs) to begin looking for a new job. Without the retention bonuses they would have just left and the mess would have been a total collapse. It's not perfect but its better than what happens when the bureaucracy runs things.

Thanks for clearing this up...I hate hearing the media call these performance bonuses when in fact they were not. It could have been a lot worse if these people were not paid to stay around and keep the company somewhat together. This info is also not coming from a news source, but the firm auditing their books.

Edited March 25, 2009 by BrandonTN

[Guest grimel]

Can you get me a copy of that contract?

The problem I have with this lump of is: Our elected leaders have given all these companys a large sum of our money. My tax dollars are being pissed away by these asses that are in charge. Yes I do have a problem with companys that take bailout money and then take all the upper management to Vegas on my dime. And also when they take my money and give it to the POS that ran the company in the ground, so they wont quit and go to work for someone else. I guess that saves us money from having to bail out another company.

.

First, before blowing up, take the time to figure out what happened not what the media tells you happened.

1) the various company conferences have been planned years in advance. Killing the conferences which generally are attended by MANY more lower people than higher people managed to greatly dent the local economies where these conferences were planned and booked (oops, you just lost 1000 rooms for next week, hope you can book them).

2) these contracts were so well known (as in 99% of large companies pay the same type of people the same way) that Christopher Dodd (D Ct) inserted an amendment to specifically allow these bonus payments to avoid the ensuing legal troubles

3) AIG was given the money to act as a clearing house for failed banks (even European banks).

4) only a FEW of the many divisions of AIG lost money. The rest managed to do quite well. If the Fed had not stuck it's nose into the issue last Aug, Oct, Jan, Feb, etc, etc this would have been over, fixed, and we'd not be talking about it

5) covering it's obligations (the TARP money) was required by the Fed. Calling it a bailout was to cover the Fed's backside. Bailing out the homeowners is a different discussion.

[Guest m&pc9]

I disagree with you and our gooberment. They are wasting my money.

[Tim Nunan]

Those who received campaign money from AIG should have it taxed at 90% rate or return it to the taxpayer.

[Guest grimel]

I disagree with you and our gooberment. They are wasting my money.

So, you don't think the gov should make good on the obligations it made? You think they should keep sticking their noses into the economy?

Or are you saying you don't care if the government just voids a contract and costs people money due them as long as it isn't you losing your contractual pay?

[analog_kidd]

I say that since there were provisions made in the stimulus bill to allow for these bonuses, any congressperson who is now claiming outrage must not have read the bill in it's entirety. If not, then that is missappropriation of our tax dollars and they should all be brought up on charges of fraud.