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AIG to Hand Out More Bonuses
American International Group is preparing to pay $2.4 million in bonuses to 40 top executives after a round of bonuses in March outraged the public. The insurance company has been waiting for the federal government’s blessing to give more bonuses with its $180 billion bailout check, even though AIG doesn't officially need permission from Obama's executive compensation czar, Kenneth Feinberg, since the bonuses are delayed from 2008. An AIG official told The Washington Post the company was reluctant to distribute the cash. “We would want to feel comfortable that the government is comfortable with what we are doing,” he said. In March, it was revealed that AIG paid more than $165 million in retention bonuses to 400 employees in its Financial Products unit, whose derivative contracts almost destroyed the entire company. Refusing to comment directly on the latest round of bonuses, a Treasury Department spokesman released a statement. “Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk taking and reward performance for their top executives,” he said.
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Yeah... big deal. So what if it's more than the average American makes in a year...
YES WE CAN
"whose derivative contracts almost destroyed the entire company."
I'm pretty sure it destroyed the company. Only reason why they are around is the U.S. Govn't.
BOYCOTT AIG!!!
Financiers are making out because the gov't is borrowing at a dizzying rate and these guys are collecting our taxes as interest payments!
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The rich get richer and now with the approval of the government. Is there a difference now? Where is "change?"
Here is what "yes we can" has done; there is no approval from the government, it is the financiers who own this country, not we the people, and Obama has run up a national debt that is making the finaciers richer, the poor destitute and right on down the line, Obama, bless his heart, it out trying to sell global warming and green technology so we can sell it to third world countries, who will get IMF payments and Fed bank loans and maybe these countries will get with the carbon credit program, you see, if no one has a positive GDP then money is tight but it must flow upward!
DO you NOT know that Goldman Sachs owns the Chicago exchange on which the carbon credits will trade? They'll even make money on global warming ...
I cannot understand why the US government, which owns this thing lock, stock and barrel, can't even control the payout of these big bonsues. Is this just a case of Geithner and all the DLC types bending over backwards to do whatever Wall Street deamnds, regardless of the political consequences for Obama and the Democratic Party? They should be running this thing as a public service, not as a for-profit corporation, which is no longer possible. This is to say that they had better be able to explain to Joe Average just what he's getting out of this AIG deal.
@mcmchugh99: You are spot on right.
Going along to get along with Wall Street, at this point, will destroy the Obama Presidency before it has hardly begun.
Anyone can understand the initial panic reaction of support for AIG, but now that the firm clearly seeks to continue business as usual on our dime, its time to let market forces take them.
Yes, please! It feels like someone is attempting to steer the titanic clear of the iceberg. It didn't work then and it is not working now. Why is this money wasting and propping up of this company continuing?
Do you understand the term 'contractual obligation'? If we reneg on contract law, the entire business world will implode. These were contracts that were agreed to in 2008.
You cannot be allowed to simply say that you don't feel like paying an agreed debt, without due process. There are some serious ramifacations there, or are you really that dense?
Slamlander, this kind of thing is done all the time, of course, particularly behind the corporate walls, within employer/employee relationships, with contracts and sub-contracts- wherever it is deemed to be advantageous to the bottom line.
The difference is that when the guvmint does it, it spoils the fun.
But, also we should try for a little perspective. While $60,000 may seem like a big payout from a shaky financial structure, how about the big multi-million dollar bonuses paid over at Goldman-Sachs? Oh, excuse me, they may have pared them down to $600,000 plus additional stock options. Whatever the actual amounts are, this stuff at AIG is chicken scratch on a relative basis!!!
THE WHOLE BUSINESS WORLD WOULD IMPLODE, and I suppose the sky would fall as well. Let them take their bonuses as IOUs; or, if the contracts must be honored in cash, that ought not be done on the backs of taxpayers while millions of us are being thrown out of work and out our homes. We can not accept capitalism for the oligarchs on the upside, but socialism for oligarchs on the downside.
The Bush administration got this boondoggle started. And Geithner, who is a Wall Street pal, failed to intercede with a withdrawal of money from AIG if they paid bonuses. If AIG accepts the money then there have to be conditions, one being to fire all the FP people in AIG. That way no bonus discussions would be on the table. And please will someone explain to me why the incompetent derivative traders would be desired by AIG or anyone? Why would anyone want to retain them? And BTW contracts are broken all the time. Let the FP people go court to obtain the bonuses while in the meantime AIG can collapse (nothing is too big to fail - and whatever happened to anti-trust laws that were to prevent these behomeths from pulling down the entire system? I suppose that is part of the deregulation that has been going on for decades compliments of the Republican party).
BTW it is not denseness of anyone to question these bonuses. The picture is very large and extremely complex. You sound like the people of the forties and fifties who screamed there would black on white rape and pillage if public schools were desegregated. That if blacks were in the military all discipline would fall apart. That abortion legalizes murder. "The entire business world would implode." Oh please!
The market imploded in 2008. So how did they earn these bonuses, just by being in the room?
Let the world implode. Why should a few people continue to get paid millions? The G-S payouts and their connection to our public officials in particular should be stopped since all of the Fed chairman's seem to originate from this behemoth! They probably keep leaking AIG info so that G-S can do business without the scrutiny.
By the way, paying for carbon credits is an absurd notion.
To some of the responders:
Contract law is the basis of our entire business system, even with the government and our culture. The failure or breakdown of which would catastrophic. We would quickly devolve back to barter, we wouldn't have a choice. Even the government dare not interfere too much with contract law.
Genni2002: Are you living on the same planet as I? If it implodes, you go with it.
BSBradley the bigot: Rampant racism is not the same as economics.
MariosRight: The market did not in fact implode. However, it came dagerously close. Without Bernanke's swift actions it would have imploded. We had a near-miss. Now ask yourselves; if this was anear miss, what would a direct hit have been like?
It's simple: Bonuses are typically for an exemplary job. They drove the company into bail out mode. They don't deserve a dime. In todays economy they are lucky to have a JOB. Another blog on this subject that takes them to task is: http://newsy1.wordpress.com
That's it. I do not care who is in office or which public office we are talking about, the next chance I get to flip a seated politician, I will. I've had enough.
What about all the police officers, firemen, teachers who had pay cuts this year and now have to do more for less?
Now your talking! Keep them flipping and out of the money making, lobbyist business and out of policy unless it is dire.
Obama pretended he was outraged when AIG used government bailout money to pay huge bonuses to its execs. The democrats in Congress pretended they would pass a law to make them pay it back.
But Obama and the dems in Congress were lying----the government owns and controls AIG, and Obama and the democrats in Congress are allowing AIG to use taxpayer money collected from average Joes to pay the huge bonuses to the wealthy AIG execs.
We will not get the AIG monkey off our back as long as the issue is frame in partisan terms. Only by framing it as a simple matter of fair play and conforming to free market principles can we build enough support to do what needs to be done--pulling the plug and letting market forces take their course.
If we pull the plug, AIG would probqbly fail and you would either loose your job or your pension or your government check.
Don't you people see how deregulation during the Clinton / Bush era has gotten us into the worst economic situation since The Great Depression.
As much as I dislike Obama's lies and broken promises, I can see that he is miles ahead of Bush / Clinton on the economy.
I am very liberal socially and he has disappointed me greatly.
If he dosen't get his act together on this greening of America 2012 is out of the question.
You got it backwards Plant, AIG owns the gov't and if the gov't doesn't kowtow they won't be given loans to run our country. That's how these guys stay on top and the rest of us pay taxes to keep them in interest payments and bonuses.
Bonuses paid with taxpayer money is an OUTRAGE.
I dont care from what year the bonus dates.
Re-write every f*cking agreement so that there are NO bonuses given to executives with taxpayer money.
Hello!!! The Economy is in the Tank!!!!
NO GODDAMN BONUSES!!!!!
Agreed. The company that has NO REVENUE can pay bonuses? In any normal company there would be no bonuses and no raises. How it is possible in the finance world, the very place where they should understand fiscal responsibility, is this continuing to happen?? Time to pull the plug and let the scum finally flow its way into the sewer where it belongs!
It is time to pull the plug on AIG.
If they've got money to pay bonuses, they've got money to pay back taxpayers with interest; and if our leaders don't act accordly, then we need a march on Washington, as Election Day is too far away.
Nor am I unmindful of the claim that AIG is too big too fail. Somehow, the world will find away to manage without them. Even if the public were obliged to cover all their bad bets, let's "spit" can them now.
Is this anything new? Chris Dodd Ok'd the last round of bonuses for the company that was given billions in tax dollars to stay afloat. Why wouldn't he or Obma OK it this time? Where can I get a job that lavishes bonuses on workers that are part of a company that has been driven into the ground by bad practices?
no shit! Me too. Hey Zone, if you find one call me!
This is what turns us all inside out.What makes us cynical,skeptics,and discontent.If the rip offs,continue, we all feel lied, to,and we feel buss. goes on the same as always.People start to feel so impotent,against,everything being done.No one cares,and its a disgrace.,and we feel our politicians,again are not doing their jobs.
Who authorized these Zars to be dictators? Zars were born in Russia and died there. We are a Democrat Country. Let Congress, if it has guts to handle this mess. Congress is playing cowards to let Zars do their dirty work.
It is something Reagan started: Regulatory Czar: Cass Sunstein
This was the beginning of "The Man Who Sold America"
Yes,they are greedy dogs which never have enough.And they are shepards who cannot understand;they all look to their own way,everyone one for his own gain,from his own territory. When are we going to protest whats going on,on Wall st we are getting robbed.These are bank robbers with a suit and tie and work on Wall st If this robbery continue's President Obama will be hurt in the 2012 elections the republicans will use this as weapon If they did'nt they would be "STUPID".I know how the Republican smear machine works.I worked on my mothers cousin campaign when he ran for congress he was a republican.This whole Wall st theivery is going bring president Obama down..........!
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Why do we pay these hoodlums so much in the first place? All they do is handle (process - like meat) other people's money. BFD, hard job that is. Meat handling actually sounds a lot harder and am sure those folks ain't getting millions in bonus money!
I realize that we probably don't elect the brightest people, but even a seventh grader knows the difference between right and wrong. In order to help our elected savants determine the difference between right and wrong, I am enclosing my list of right vs wrong. Senators, find a tutor to read this list. My fellow blog posters may offer a few more that you, my political friends, are not aware of.
Allowing 18,000 Americans to die each year because they have no medical insurance is wrong. This is a special case of wrongness, because it is the highest of moral wrongs. This is especially for Max Baucus. That part in the ten commandments that says "Thou shall not kill." Max...he meant that. You earn a final resting place next to Robert McNamara for your actions.
Allowing TV commercials to blast into a room at 300 percent is wrong. Senators, crawl out of the telecom industry back pockets and do the right thing.
Starting wars around this planet in order to sustain some deviant mental defect is wrong. George, didn't your mother teach you anything?
Killing tens of thousands of humans because you don't like their countries leader is wrong. Bush / Cheney / Rumsfield please refer to part of the bible that refers to eternal damnation.
In regards to warmongering. Preaching to the citizens of our that country that it is patriotic to give up your life or to give up the lives of your sons and daughters is wrong. When a war is just and necessary, Americans will line up to serve. Karma is going to get you on this one.
Standing on your soapbox screaming family values and saying nothing when you family values creep is out cheating on his wife and children is wrong. Cheating on your wife and children while you are pointing fingers at another politician that did the same is also wrong. Thought you would know that one Newt.
I guess we could go on like this all day. I just thought our elected politicians should know that even if they don't know the basic differences between right and wrong, their constituents do.
Oh yes, Sarah Palin. Now she is just plain wrong.
AIG was just a conduit to provide money to Goldman Sachs. Now that the crisis seems to have passed, at least as far as Wall Street is concerned, it's back to business as usual, i.e. playing with a wheel that they have fixed and systems rigged just like Enron rigged California's electricity system. And if millions of wage earning Americans are being fired and can't get health insurance. Well, too bad, that's just the Capitalist system..... George Patton
After Enron, everyone else has to live with Sarbanes Oxley, but do the banks? No, they can say that money they have not earned is revenue. So a thirty year 'promise' to pay is bartered and sold like it is real, already earned money. How does that work exactly?
The answer is this AIG:
Give back ALL the taxpayer money with interest.
Then you can have your bonuses.
(IMPO) it's unethical also..and the executives DON'T have to take the money as a personal moral issue either..We shall see..if GREED will precede as normal..
AIG has the Federal Gov't by the nutz..as one of the largest international insurance corporation on the globe..so I'm told..
But this second pay out bonuses was a DONE deal contractual.. not disclosed BEFORE the FIRST bail out of AIG, am I right?
If so, Mr. Friendberg dropped the ball to not address this before the FIRST bail out to AIG..( or was he the executive compensation czar, then?) ... if so he literally chose not to (annie) up an investigation on the HILL..the disclosure bonuses contract is probably woven so tight..it's not worth the repercussion to stagnate AIG with litigation doing this recession, PPL need insurance and claims need to be paid..especially NOW.. when somewhere or another.. each and everyone of us as taxpayers have been touch by AIG..
Even if I can try and rationalize a commission structure that pays employees based on sales, how many of the 2008 transactions at AIG could be considered profitable and thereby deserve payment? They needed $180 BILLION to stay open for business !!? To put that in perspective, Toyota lost $4.4 billion in '08
If a select few got this behemoth into trouble, then these individuals need to be held accountable and a plan to rid the firm of the culture that permitted this must be publicized. They have a huge public relations problem.
That is the 180 billion dollar question, then.
How's that hope and change ? A little bushy a...
The focus on bonuses is misleading. What should be the center of discussion is the lack of influence the government got over these insititutions as part of the bailout. If they had simply been nationalized as they should have been all of these other issues would have been swept away by now. wduane.
Man, I would like to work for AIG.
Screw up everything, lie and conceal it when, had it been dealt with earlier, it might not have cost the taspayers quite so much, then get a big bonus to stay in my job.
A bonus bigger than most of us ever make.
*sigh*
I am in the wrong business.
FIRE THEM ALL, NOW! Are you listening Obama?
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