Aig Paying Out $165m In Bonuses

[tom_shor]

I didn't like what was going on with that but once again we get a knee jerk reaction from those muttonheads. Vengence legislation is just as wrong as vigalante justice in the streets. They should know better. Especially since these were existing contracts and the Obama administration was aware of them. If I had been about to return the money when they did that I would have said FU and just paid the tax.

[TheMason]

I didn't like what was going on with that but once again we get a knee jerk reaction from those muttonheads. Vengence legislation is just as wrong as vigalante justice in the streets. They should know better. Especially since these were existing contracts and the Obama administration was aware of them. If I had been about to return the money when they did that I would have said FU and just paid the tax.

Most of the bonses were retention bonuses, not performance bonuses. As AIG deleverages and sells off their portfolio of risky investments, they need people that know how they got into the mess in order to get out of the mess as cleanly as possible. It would be far more expensive to bring in new staff to complete the work than it is to retain the people that are knowledgable about the business. AIG had 2.7 trillion in investments they wanted to sell. They're now down to 1.6 trillion left to unload. 165 million is a drop in the bucket.Aside from the valid business reasons to pay retention bonuses, AIG signed employment contracts. They can't break their employment contracts simply because they are getting bad press over them. You can argue whether or not the contracts should have been agreed to by AIG, but the fact is that they were agreed to. Once you have an employment contract, the company should live up to their obligations and pay their employees as agreed.

[Mr Lee]

I really do not care how all that works and if the government had let them go broke then no one would have gotten any bonuses. I feel it is an outrage and everyone should give it back, but if the don't then the 90% take should take care of it. :13_4_10[1]: :cheers:

[Markham]

Most of the bonses were retention bonuses, not performance bonuses. As AIG deleverages and sells off their portfolio of risky investments, they need people that know how they got into the mess in order to get out of the mess as cleanly as possible. It would be far more expensive to bring in new staff to complete the work than it is to retain the people that are knowledgable about the business. AIG had 2.7 trillion in investments they wanted to sell. They're now down to 1.6 trillion left to unload. 165 million is a drop in the bucket.Aside from the valid business reasons to pay retention bonuses, AIG signed employment contracts. They can't break their employment contracts simply because they are getting bad press over them. You can argue whether or not the contracts should have been agreed to by AIG, but the fact is that they were agreed to. Once you have an employment contract, the company should live up to their obligations and pay their employees as agreed.

Hmmm.... I read on the BBC Site earlier this week that Liddy - AIG's new CEO - said that the contentious bonuses were to be paid to the same staff that had got the company in the brown and smelly in the first place.As for the employment contracts, I'm quite sure AIG would have had a clause to the effect that bonuses are only payable if the company is profitable - that makes sense, doesn't it? If they didn't have such a clause, then all the directors should be fired for negligence.If I were Liddy, I'd fire every employee who refused to return their bonus, regardless of their standing in the company.

[Markham]

"AIG bonuses 'higher than thought' US insurance giant AIG paid out a total of $218m (

[tom_shor]

If they need to stay to straighten out the mess they made then perhaps instead of a big paycheck as a reward for screwing up they should just get a court order that prevents them from leaving until it is finished. You quit you go to jail. Hows that for an incentive. I really think congress has more important things to do than pass vengence legislation against a few people. This is a very bad precident they are setting. Despite the aggrivation of it all this is really a very small amount when you consider the total they are dealing with in this mess. They should be encouraged to give it back and some of it already has been given back.

[Markham]

If they need to stay to straighten out the mess they made then perhaps instead of a big paycheck as a reward for screwing up they should just get a court order that prevents them from leaving until it is finished. You quit you go to jail. Hows that for an incentive. I really think congress has more important things to do than pass vengence legislation against a few people. This is a very bad precident they are setting. Despite the aggrivation of it all this is really a very small amount when you consider the total they are dealing with in this mess. They should be encouraged to give it back and some of it already has been given back.

I take your point, Tom, but the hastily-rushed-through legislation will also limit the ability of other companies, that in future find themselves in AIG's position, to pay huge bonuses to their staff.I like your idea of a court order, though!As for staff returning their bonuses, I've only read about some members of AIG who agreed to return half of the bonus they received - bearing in mind that some of the bonuses were in the millions of Dollars - but I've not seen mention of full bonus repayments. But since you're in the US - and considerably closer to the "action" - you may be right.

[tom_shor]

If they need to stay to straighten out the mess they made then perhaps instead of a big paycheck as a reward for screwing up they should just get a court order that prevents them from leaving until it is finished. You quit you go to jail. Hows that for an incentive. I really think congress has more important things to do than pass vengence legislation against a few people. This is a very bad precident they are setting. Despite the aggrivation of it all this is really a very small amount when you consider the total they are dealing with in this mess. They should be encouraged to give it back and some of it already has been given back.

I take your point, Tom, but the hastily-rushed-through legislation will also limit the ability of other companies, that in future find themselves in AIG's position, to pay huge bonuses to their staff.I like your idea of a court order, though!As for staff returning their bonuses, I've only read about some members of AIG who agreed to return half of the bonus they received - bearing in mind that some of the bonuses were in the millions of Dollars - but I've not seen mention of full bonus repayments. But since you're in the US - and considerably closer to the "action" - you may be right.

The last I heard 50 million had been returned. They might have gotten more back but it is possible that the vindictive legislation leveled at them by congress changed their minds. I know if I was the recipiant of one of these bonuses and they did that I would just pay the tax and keep the rest even if I had previously been willing to give it back.

[Markham]

If they need to stay to straighten out the mess they made then perhaps instead of a big paycheck as a reward for screwing up they should just get a court order that prevents them from leaving until it is finished. You quit you go to jail. Hows that for an incentive. I really think congress has more important things to do than pass vengence legislation against a few people. This is a very bad precident they are setting. Despite the aggrivation of it all this is really a very small amount when you consider the total they are dealing with in this mess. They should be encouraged to give it back and some of it already has been given back.

I take your point, Tom, but the hastily-rushed-through legislation will also limit the ability of other companies, that in future find themselves in AIG's position, to pay huge bonuses to their staff.I like your idea of a court order, though!As for staff returning their bonuses, I've only read about some members of AIG who agreed to return half of the bonus they received - bearing in mind that some of the bonuses were in the millions of Dollars - but I've not seen mention of full bonus repayments. But since you're in the US - and considerably closer to the "action" - you may be right.

The last I heard 50 million had been returned. They might have gotten more back but it is possible that the vindictive legislation leveled at them by congress changed their minds. I know if I was the recipiant of one of these bonuses and they did that I would just pay the tax and keep the rest even if I had previously been willing to give it back.

Sorry Tom, I don't subscribe to the "rewards for failure" school of management!

[Markham]

AIG hit the headlines again yesterday when a top executive quit the company blaming AIG "betrayal" and persecution by elected officials. The executive, Jake DeSantis, was an executive vice-president and worked in the financial products division whose massive losses caused AIG's virtual collapse. In his resignation letter, published in the New York Times, he criticised AIG's Chief Executive, Edward Liddy, of failing to support his workers.DeSantis' bonus, after tax (at 90%), is $742,006 which he says he would donate to those suffering in the global economic downturn. I wonder he includes himself as a beneficiary of that charity as his salary of $1 a year wouldn't go too far in paying his living expenses. However his bonus - if paid in full - was somewhat higher than the maximum ($5 million) AIG has admitted to. More shenanigans there then.You can read more on this story on the BBC News website.