Insurance giant AIG to pay $165 million in bonuses

[BoomerD]

http://news.yahoo.com/s/ap/200...on_bi_ge/aig_bonuses_6

WASHINGTON ? American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

This official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG's current bonus structure.

Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said.

In a letter to Geithner dated Saturday, Liddy informed Treasury that outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Liddy said in his letter that "quite frankly, AIG's hands are tied" although he said that in light of the company's current situation he found it "distasteful and difficult" to recommend going forward with the payments.

Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall.

The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.

A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded "retention pay" to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.

The company says in the paper it will work to reduce the amounts paid for 2009 and believes it can trim those payments by at least 30 percent.

Bonus programs at financial companies have come under harsh scrutiny after the government began loaning them billions of dollars to keep the institutions afloat. AIG is the largest recipient of government support in the current financial crisis.

AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives. Liddy and six other executives have agreed to forgo bonuses.

The group of top executives getting bonuses will receive half of the $9.6 million now, with the average payment around $112,000.

This group will get another 25 percent on July 14 and the final 25 percent on September 15. But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.

The Obama administration has vowed to put in place reforms in the $700 billion financial rescue program in an effort to deal with growing public anger over how the program was operated during the Bush administration.

That anger has focused in part on payouts of millions of dollars in bonuses by financial firms getting taxpayer support.

In his letter, Liddy told Geithner, "We believe there will be considerably greater flexibility to reduce contractual payments in respect of 2009 and AIG intends to use its best efforts to do so."

But he also told Geithner that he felt it could be harmful to the company if the government continued to press for reductions in executive compensation.

"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers ? if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury," Liddy said.



The corporate apologists keep telling us that they HAVE to pay these bonuses if they want to keep their best people...but if these people are so dammed good, why are we bailing AIG out to the tune of 170+ Billion dollars? Who is responsible for the losses?
Why aren't these corporations firing the ones responsible for the bad decisions?
Why are we, the US taxpayers having to foot the bill so they can continue to play the game the same way they always have?
Maybe AIG and the rest of these money-losers need to fire a bunch of their executives and hire new ones...there are bazillions of unemployed people right now...they ought to be able to find a wino or hooker who can do better...:disgust:

 

[WaTaGuMp]

Fucker, I was gonna post this, I JUST finished reading it.

 

[bamacre]

These taxpayer-funded executive bonuses will prove to be a boon for the world.

 

[babylon5]

All you people complaint about bonuses just don't understand. If AIG doesn't give bonuses, these executives will quit AIG cold, because they can get sooo many offers from other investment firms on Wall Street now. They will fight over their "talents" in this booming economy and pay them much better salary, dont' you see??? Hell, you should have seen those janitors at AIG, they clean hallways and bathrooms so much better than the regular janitors, just because they got "AIG" on their shirt.

Don't kid yourself, everything from AIG is made from pristine gold, and they deserve everything!!

 

[Phokus]

Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

 

[MotF Bane]

Originally posted by: Phokus
Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

Of course you want a command economy where the government can run everything into the ground if you had your way.

 

[Phokus]

Originally posted by: MotF Bane

Originally posted by: Phokus
Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

Of course you want a command economy where the government can run everything into the ground if you had your way.

Yeah it's not like Canada largely shielded itself from the subprime mess thanks to regulation or anything, gg

http://www.nytimes.com/2009/02...28tedesco.html?_r=4&em

 

[nageov3t]

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

 

[bamacre]

Originally posted by: Phokus

Originally posted by: MotF Bane

Originally posted by: Phokus
Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

Of course you want a command economy where the government can run everything into the ground if you had your way.

Yeah it's not like Canada largely shielded itself from the subprime mess thanks to regulation or anything, gg

http://www.nytimes.com/2009/02...28tedesco.html?_r=4&em

1. Your link doesn't work (without some tinkering)

2. Canada isn't doing so hot

3. Ron Paul opposed the deregulation often considered cause for our economic problem.

4. Canada doesn't spend $1 trillion a year maintaining a foreign empire.

5. Your "Free Market FTW" remark makes me assume you don't know WTF a free market is.

6. Your government-managed economy is doing a good enough job of sending us back to the "stone age."

 

[quest55720]

Originally posted by: loki8481

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

I say let them sue I don't think most would have the balls to. You sue and you make your self infamous.

 

[Phokus]

Originally posted by: bamacre

Originally posted by: Phokus

Originally posted by: MotF Bane

Originally posted by: Phokus
Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

Of course you want a command economy where the government can run everything into the ground if you had your way.

Yeah it's not like Canada largely shielded itself from the subprime mess thanks to regulation or anything, gg

http://www.nytimes.com/2009/02...28tedesco.html?_r=4&em

1. Your link doesn't work (without some tinkering)

2. Canada isn't doing so hot

3. Ron Paul opposed the deregulation often considered cause for our economic problem.

4. Canada doesn't spend $1 trillion a year maintaining a foreign empire.

5. Your "Free Market FTW" remark makes me assume you don't know WTF a free market is.

6. Your government-managed economy is doing a good enough job of sending us back to the "stone age."

Yeah too bad Canada's banks are doing MUCH MUCH better than ours, thanks to regulation. And so Ron Paul is a statist now? GG I like how libertarians get to decide what's 'good' and 'bad' regulation now. And yeah, if it wasn't for the free market republicans doing stupid stuff like abolishing the glass stegal act, we wouldn't be in this malaise.

 

[bamacre]

Originally posted by: Phokus
And so Ron Paul is a statist now? GG I like how libertarians get to decide what's 'good' and 'bad' regulation now.

Sorry, it's a bit more complicated than you assume.

You can't get rid of a house of cards by removing some from the bottom and irresponsibly causing the whole thing to collapse.

Under other conditions, I am sure Paul would have supported that deregulation. But those conditions weren't reality, and he opposed this manner of deregulation, specifically, the Gramm-Leach-Bliley Act which is what we are referring to.

And yeah, if it wasn't for the free market republicans doing stupid stuff like abolishing the glass stegal act, we wouldn't be in this malaise.

It wasn't just the Republicans, nor would I ever refer to the Republicans as "free market" minded. They certainly don't show it.

Clinton, when asked...

http://www.businessweek.com/ma..._40/b4102000409948.htm

Phil Gramm, who was then the head of the Senate Banking Committee and until recently a close economic adviser of Senator McCain, was a fierce proponent of banking deregulation. Did he sell you a bill of goods?

Not on this bill I don't think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can't possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I'd be glad to look at the evidence. But I can't blame [the Republicans]. This wasn't something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.

 

[her209]

Why do these jackasses still have jobs?

 

[BansheeX]

And so Ron Paul is a statist now? GG I like how libertarians get to decide what's 'good' and 'bad' regulation now.

That's like saying it's hypocritical to take a tax credit while working to abolish the income tax. The reason you take the credit is to get the money back. That you don't leave it with the federal government after its appropriation doesn't mean you want it to be appropriated in the first place. Paul has always tried to solve the fundamental problem. A real solution isn't hoping you can regulate the effects of a spiked punchbowl, it is eliminating the spiker, and Paul has always been trying to prevent what he knew would otherwise happen. Did SEC regulation stop Madoff even though they had numerous tips and were in his offices 9 times? Who's regulating the regulators? And the Fed doesn't get "regulated" by anybody. They have zero oversight, not even congress knows where they are directing the trillions they're creating and what their reasoning is for doing so. Not that congress is a worthy regulator, but at least the public would hear about it, it's their (and their future children's) wages being debased, after all. Moreover, banks can create checkbook money ontop of deposit money and loan it out at interest, the whole system is a giant pyramid of inflation and borrowing just waiting to collapse. You don't need to "regulate" fraud on a fundamental level, you need to put a fucking stop to it with a 100% gold standard so that credit bubbles don't blow up in the first place.

Yet all I hear from the Republicrats is "regulate the effects" and "human beings spontaneously evolved to become more greedy 20 years ago." Good luck to you in your theories, son, maybe when you're 90 you'll do the research necessary to figure this stuff out.

 

[miketheidiot]

Originally posted by: loki8481

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

LEAVE FACTS OUT OF THIS THREAD

 

[miketheidiot]

Originally posted by: bamacre

Originally posted by: Phokus

Originally posted by: MotF Bane

Originally posted by: Phokus
Free market FTW. I love how these mega financial corps have a gun to our head... if we don't bail them out, the economy will implode... if we bail them out, they still pay out huge bonuses anyway.

Of course the libertarians like bamacre would love to see the economy go back to the stone age if he had his way.

Now we know we can't trust these corporations and we NEED more regulation, like Canada's system.

Of course you want a command economy where the government can run everything into the ground if you had your way.

Yeah it's not like Canada largely shielded itself from the subprime mess thanks to regulation or anything, gg

http://www.nytimes.com/2009/02...28tedesco.html?_r=4&em

1. Your link doesn't work (without some tinkering)

2. Canada isn't doing so hot

3. Ron Paul opposed the deregulation often considered cause for our economic problem.

4. Canada doesn't spend $1 trillion a year maintaining a foreign empire.

5. Your "Free Market FTW" remark makes me assume you don't know WTF a free market is.

6. Your government-managed economy is doing a good enough job of sending us back to the "stone age."

bamacre: has a free market ever existed?

also

canadian banks are doing very well, and no one gives a shit about ron the quack, atleast beyond which he serves to troll crazies on the internet.

 

[miketheidiot]

Originally posted by: BansheeX
And the Fed doesn't get "regulated" by anybody. They have zero oversight, not even congress knows where they are directing the trillions they're creating and what their reasoning is for doing so. Not that congress is a worthy regulator, but at least the public would hear about it, it's their (and their future children's) wages being debased, after all. Moreover, banks can create checkbook money ontop of deposit money and loan it out at interest, the whole system is a giant pyramid of inflation and borrowing just waiting to collapse. You don't need to "regulate" fraud on a fundamental level, you need to put a fucking stop to it with a

100% gold standard so that credit bubbles don't blow up in the first place.[/quote] lol because bubbles never happened under the gold standard. Gold standard was a terrible idea at the time, and remains a terrible idea now.

the fed is audited by the gao, and is 100% accountable to congress.

Yet all I hear from the Republicrats is "regulate the effects" and "human beings spontaneously evolved to become more greedy 20 years ago." Good luck to you in your theories, son, maybe when you're 90 you'll do the research necessary to figure this stuff out.

is there a coherent thought there?

 

[Jaskalas]

Originally posted by: bamacre
These taxpayer-funded executive bonuses will prove to be a boon for the world.

They will spend that money. They call that stimulus in Washington.

 

[yowolabi]

Originally posted by: loki8481

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

If they had received no bailouts, how much would they have paid out in bonuses? How much did the executives at Lehman Bros. receive this year?

My point is that we stopped AIG from going bankrupt when they were supposed to. I'm no expert on bankruptcy, but I do recall that contracts can be altered in those proceedings.

It's perfectly reasonable to expect that a condition of the bailout would be that the AIG decision makers don't get rewarded for their incompetence. Let the executives sue if they don't like it.

 

[nCred]

Bonuses are one of the causes of this financial crisis. If you take huge risks and win = huge bonus. Lose and you may not get a bonus, but so what?

 

[smack Down]

Originally posted by: loki8481

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

Which is why there should be no bailouts. Let AIG file chapter 13 and then decided what needs to be done.

 

[chess9]

Agreed, no bailouts. These people are using tax money to fund their uppity lifestyles.

These bailouts will go down in history as one of the dumbest moments in American history. Mass hysteria in Congress and in the White House, all started by the Charlatan of Wall Street.

-Robert

 

[BrownTown]

The problem is if you don't pay bonuses then talented people leave your company. I know where I work several people came from another competitor recently because they cut their end of the year bonuses drastically due to lack of business. I guess it depends on the industry how loyal employees are, but from my understanding they are not very loyal in the financial sector.

 

[Hacp]

Originally posted by: BrownTown
The problem is if you don't pay bonuses then talented people leave your company. I know where I work several people came from another competitor recently because they cut their end of the year bonuses drastically due to lack of business. I guess it depends on the industry how loyal employees are, but from my understanding they are not very loyal in the financial sector.

There are literally hundreds of thousands of financial workers who were laid off that are looking for work. If the execs don't want the job, there are people willing to do the same work for less money. No bailouts. Obama fails again.

 

[SigArms08]

Originally posted by: miketheidiot

Originally posted by: loki8481

AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.

LEAVE FACTS OUT OF THIS THREAD

LMFAO, tools are still out there defending the bonuses paid to failed business execs! I suppose their insane salaries are justifiable, too.....leading a company beyond the brink of failure requires talent not easily found elsewhere, eh? And it deserves a handsome tax-payer-funded payoff!!

You should really include some other facts, Mike. Like the fact that millions of pensions are now at risk, 401k's have taken massive hits, many people are loosing their homes, home values have dropped in most areas of the country......yes, the economy is doing fantastic because of these corrupt and arrogant asses. Let us not only bail them out, but shower them with bonuses, too. EVER HEAR OF THE TERM "ETHICS"?????