AIG distributes another 100 million in bonuses

[Hacp]

They are almost always performance based.

AIG is very profitable in all arms of the company except for 2.

1. Aircraft rental. (minor losses)
2. AIG Financial Products. (otherworldly losses)



Also, AIG has turned a profit in its last 2 quarters thanks to winding down a lot of their derivatives and selling off foreign wings of its company.

Is that profit calculated before or after factoring in bailout money? If AIG had paid less in bonuses, would the profit have been higher?

 

[spidey07]

If bonuses get paid regardless of performance and employers are contratually obligaed to pay them why aren't these people just getting a straight salary??

Many times bonuses are tied to company or division performance, not individual.

 

[Acanthus]

Is that profit calculated before or after factoring in bailout money? If AIG had paid less in bonuses, would the profit have been higher?

Of course it would have, but all of their employees would move to better paying firms if their contracts were violated.

A lot of their executive board has already left, they just promoted a ton of people to fill the holes under new, more fair, contracts.

 

[thraashman]

Every business and company on the planet, if the company loses money then bonuses aren't paid. Even to great employees. The employees have to understand that tough financial times require cut backs and they should be happy to retain their jobs. Somehow we think financial firms should live in this bubble where the same rules that apply to the rest of the world don't exist?

 

[JS80]

Every business and company on the planet, if the company loses money then bonuses aren't paid. Even to great employees. The employees have to understand that tough financial times require cut backs and they should be happy to retain their jobs. Somehow we think financial firms should live in this bubble where the same rules that apply to the rest of the world don't exist?

This is 10000% false. Many bonus plans are not based on company wide financials, and often times bonus plans are in place even if the company is projected for a loss.

 

[soulcougher73]

i dunno if you're being sarcastic or not, but it's true. people will leave if they are not compensated.
they'll find another company that will pay bonuses.

That is fine. Let them go to a company that was not bailed out and i have no problem with the bonuses. Always someone else to take there place.

 

[Acanthus]

Every business and company on the planet, if the company loses money then bonuses aren't paid. Even to great employees. The employees have to understand that tough financial times require cut backs and they should be happy to retain their jobs. Somehow we think financial firms should live in this bubble where the same rules that apply to the rest of the world don't exist?

This is not true.

AIG has something like 86 "divisions" within the massive company. Of all of those, only 2 are not making money.

Bonuses within AIG are based on the profit of the division and individual performance. If someone is getting a big bonus at AIG it isn't in the unprofitable wings of the company.

AIG is also ahead of schedule in repayments to the federal govt. It is in their interest to do so as it saves them a fortune on interest. They are currently putting AIA and ALICO on the market for sale. Metlife has been looking at ALICO.

Last quarter:

They reduced the number of derivatives outstanding by 28%. Dramatically reducing AIGFPs exposure to risk.
They also reduced their investment positions by 43%.
Sold their infrastructure and energy assets. Netting the company $619m.
General Insurance wing made $722m. Significantly up from last quarter, and the same time last year.
Life Ins. and Retirement Services made $7.8B. Again significantly up.
AIGFS made $1.8B

No one deserves any bonuses in AIG? Really?