Aig Paying Out $165m In Bonuses

[Mike S]

Tom .... while I agree that congress may appear to be wrong with the assertion of the 90% tax ...... but it needs to be curbed before other companies jump on the band wagon and try the same strategy ...... a better deal would have been to make a claim upfront denying government funds to be paid in any form of bonus or salary increases to failing companies ....... but like the rest of us I'm sure congress never dreamed such crap would take place ....... so it is more like trying to shut the door to the barn after the horse has run out ....... but then any action is better than none ....... IMHO .... I too like the jail term thing .... but then years ago you remember when the senate and congress voted themselves a pay raise of 20 to 30 thousand dollars per year and we could do nothing about it ...... it would be great if all employees could vote themselves a raise ....... hahahahaha

[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.

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

Neither do I those contracts should never have been signed. But they were signed and the Head of the treasury Department and the Fed knew about them. I suspect Obama did too but he says no. So now if I sign a contract to pay a bunch of money to someone can I unilaterially decide to reduce it by 90% like the government did? The government initally agreed to honor the contracts then renigged on the deal. That is even more wrong than paying them in the first place. So now who will trust the government to follw through on their agreements? (Assuming you trusted them to begin with) Also compared to the amounts involved in this whole mess the amount of money involved is very small so doesn't congress have more important things to be working on things that involve Trillions of dollars.I think this whole mess could have been avoided first by accurate and complete reporting of ALL the facts pertaining to this deal and second by a direct personal appeal to the people to return it. If it had been handled better I am sure the majority of the money would have been returned. I'm not liking the leadership I am seeing in this administration. But after what was done I don't blame the guy one bit I would have done exactly what he did. Pay them their 90 and keep my 10.

[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!

Neither do I those contracts should never have been signed. But they were signed and the Head of the treasury Department and the Fed knew about them. I suspect Obama did too but he says no. So now if I sign a contract to pay a bunch of money to someone can I unilaterially decide to reduce it by 90% like the government did? The government initally agreed to honor the contracts then renigged on the deal. That is even more wrong than paying them in the first place. So now who will trust the government to follw through on their agreements? (Assuming you trusted them to begin with) Also compared to the amounts involved in this whole mess the amount of money involved is very small so doesn't congress have more important things to be working on things that involve Trillions of dollars.I think this whole mess could have been avoided first by accurate and complete reporting of ALL the facts pertaining to this deal and second by a direct personal appeal to the people to return it. If it had been handled better I am sure the majority of the money would have been returned. I'm not liking the leadership I am seeing in this administration. But after what was done I don't blame the guy one bit I would have done exactly what he did. Pay them their 90 and keep my 10.

Tom,

Dear Claimant:We are in receipt and have processed your claim for $12,500 in respect of the damage done to the roof of your house when a tree, struck by lightning, fell on to it. Although your claim is perfectly valid and has been approved, we regret that we are unable to make payment to you as the money originally ear-marked to cover your claim has been paid as a bonus to one of our staff and he's currently on vacation in the Bahamas. We have therefore no option but to close the file.I'd like to take this opportunity of reminding you that your next premium falls due on April 1.Thank you for choosing AIG and we look forward to your continued business.

Sounds ludicrous, right, but there's a serious point to be made. The money given to AIG by the Federal Government was intended to bail-out that business which failed due to bad decisions being made within one particular unit of that company. Those members of staff, I'm sure, had the option of having a "proper" salary and maybe lesser performance bonus but they chose to take no salary and get a huge bonus at the end of the year. Their decision and because they didn't perform their duties propertly, their problem, not AIG's, not the US Government's or the tax-payers'. Their greed determined their fate. AIG is possibly partly to blame in that it allowed such employment contracts to be made in the first place.

[tom_shor]

I totally agree it sucks to give them that money. They messed up and shouldn't be entitled to anything extra to straighten it out. However AIG signed contracts with them to do exactly that. This was before the bailout. The government was aware of the contracts and agreed to honor them. (Although the legal repercussions of not paying them was investegated by the chairman of the fed.)Now having agreed to honor the contracts the government has changed its mind and decided it doesn't want to. The point to be made is even the government shouldn't be able to unilaterialy disregard a binding legal agreement. Or take punitive action when one party chooses to stick with the original contract. This sets a dangerous precident. Now anyone who signs a contract and then changes his mind has legal argument to void the contract. They screwed up they should admit it. If the government has objections they should have expressed them at the beginning.

[Markham]

Tom, I agree with you. This whole affair is a presentational nightmare for the new Obama administration who, technically, are bound by decisions made by the previous lot. I feel sure it will have to pass additional legislation to get itself out of the hole it's dug with regard to contracts of employment.Maybe this could be avoided in future by prohibiting employment contracts for no salary and that employees should receive monthly paychecks for at least the current rate of minimum wage. Then there would be no need for "rentention bonuses" as bonuses would be linked to the employee's individual performance and the employer's overall profitability - i.e. "performance bonuses".The Government's stance is, under the circumstances, understandable. It has a duty to all its citizens and I'm quite sure that there are tax-payers who are in greater financial straits than those relatively few who've had their bonuses capped.Maybe this will serve as a wake-up call to people like DeSantis and remind them that they live in the real world and are not somehow immune to the current financial crisis affective everyone else.