AIG Will Still Pay Out $160 Million in Bonuses
UPDATE: The WSJ now says it's $450 million in bonuses.
Yes, I get the argument. Derivatives are complex, and maybe we can't wait for someone new to get up to speed. But what this really boils down to is extortion. They're claiming they can't legally breach the contract? I thought that's what bankruptcy is for! They think we'll knuckle under to blackmail from the same geniuses who got us into this mess?
Insurance giant American International Group will award hundreds of millions of dollars in employee bonuses and retention pay despite a confrontation Wednesday between the chief executive and Treasury Secretary Timothy F. Geithner.
But the company agreed to revise some executive payments after what AIG's leader, Edward M. Liddy, called a "difficult" conversation.
The bonuses and other payments have been exasperating government officials, who have committed $170 billion to keep the company afloat -- far more than has been offered to any other financial firm.
The issue came to a head when Geithner called Liddy and told him the payments were unacceptable and had to be renegotiated, said an administration official who was not authorized to comment on the Geithner conversation.
In a letter to Geithner yesterday, Liddy agreed to restructure some of the payments. But Liddy said he had "grave concerns" about the impact on the firm's ability to retain talented staff "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."
Lawyers at both the Treasury Department and AIG have concluded that the firm would risk a lawsuit if it scrapped the retention payments at the AIG Financial Products subsidiary, whose troublesome derivative trading nearly sank AIG. The company promised before the government started bailing out the firm in September that employees would be awarded more than $400 million in retention pay this year and next.
"I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them," Liddy wrote.
At the same time, the company said in documents provided to the Treasury, any steps that encourage specialists at AIG Financial Products to leave could open the U.S. government to further risk because of the hazards still posed by the $1.6 trillion portfolio of complex derivatives those employees are working to dispose.
I would love to see pictures, home addresses, telephone numbers and emails addresses for these crooks. Kinda like the pedophile alert pages.
Ditto here. Although I would love to ee the Obama Administration go in with a fine tooth comb and scrutinize their records. Any criminal wrongdoing gets full all out prosecution. With maximum prison time. This happened because of little to no government oversite. And they at AIG are still milking that cow. Still no oversight Still no regulators to stop them from continuing their swindle. Fuckin assholes.
this is the sort of language used by Hal Turner and judges he don't like.
google
Some stuff you can't make up!
My present understanding is that the contracts upon which these purported bonuses are based were signed in early 2008, several months before AIG accepted the first federal payment.
My intuition is that the AIG officers responsible for derivative trading, seeing the coming problem and attempting to safeguard their own financial interests, petitioned AIG's directors to permit AIG to enter into contracts approving officer and executive bonuses. Contracts were not made for other divisions.
Officers and directors owe a duty of care and a duty of loyalty to their corporation and shareholders. In the event the payments are made, I suspect a shareholders' lawsuit will be filed, alleging that the officers and directors violated their fiduciary obligations by self-dealing at the expense of the corporation.
For some strange reason I think a short term investment of 1000 dollars into this company maybe very lucrative, using my 6th sense again. My spidey abilitys. I really have no clue, they are bastards.
Hell, why not? Our elected representatives were stupid enough to give them the money, why shouldn't they take advantage? The game is over, the fatcats won. Now they will take the money we've given them to consolidate their power over us, not to mention continuing to export and downsize our jobs away. History has never seen the like of it, at least not in a "free" society.
The most efficient, hardworking labour force on the face of the earth is being sold down the river and no one is going to do a damn thing about it.
The bailout was made to keep AIG from declaring bankruptcy. That's why the contracts are still enforceable. So yeah -- let the damn thing go into bankruptcy, and quit throwing good money after bad!
they can go all chapter 11 and still survive.
As for having "'grave concerns' about the impact on the firm's ability to retain
these plunders and piratestalented staff "if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury," where else are these assholes going to find work? Tell me Ed? Taco Bell?Party's over.
me-oww!
My feeling exactly. Exactly!! Since they are in the banking/financial industry let them go try to get a job as a bank teller and see how real people work.
unemployment.
Some stuff you can't make up!
uhhh...you company lost millions...who exactly is talented?
this is a joke
Are you kidding? I've rarely seen such talented criminals.
He can't see how successful they are. He still thinks like the sheep, and not the wolves.
that's how he gets sheared.
that these "talented" folks might be doing a bit of black mail?
"i get my bonus or i give away the secrets"...
Oooh, good catch, Katy!
And is it just me, or does this part sound like a threat:
"At the same time, the company said in documents provided to the Treasury, any steps that encourage specialists at AIG Financial Products to leave could open the U.S. government to further risk because of the hazards still posed by the $1.6 trillion portfolio of complex derivatives those employees are working to dispose."
FB
99%
1. something given or paid over and above what is due.
2. a sum of money granted or given to an employee, a returned soldier, etc., in addition to regular pay, usually in appreciation for work done, length of service, accumulated favors, etc.
3. something free, as an extra dividend, given by a corporation to a purchaser of its securities.
4. a premium paid for a loan, contract, etc.
5. something extra or additional given freely: Every purchaser of a pound of coffee received a box of cookies as a bonus
There is nothing regarding AIG's current situation which even warrants anything remotely close to a bonus for its management team. WTF?
thats because Obama's crony's wrote in the exceptions to the bailout.
amazing what having a crew of Wall Street pro's working for you and when they get legislation/policies passed, whom do they benefit?
"talented staff"
Some stuff you can't make up!
Fine, seize them and then break them up into smaller bits. Sell off the profitable portions to pay off the debt: Problem Solved. Not too big to fail after all.
That is going to happen. It just has to wait until things shake out a little. It's kind of hard to sell anything like this at this time but AIG will be broken up and sold off in parts. The government (you and I) should come out of this alright. In the meantime these assholes should not be getting bonuses after they got the company into this mess.
Who told you that Captain? Mister Green Jeans?
To who? Not to me or you (I hope). ONLY to Bernake, Geithner, Obama, and the others who work for AIG, NOT us!
Well the government owns 80% of AIG. They/we will sell it when the economy gets better. They won't sell it in one piece because they can't. They will break it up. Bunny Rabbit told me... or was it Mr. Moose? I can't remember.
It's "ok" to let the auto industry file for bankruptcy so they can renegotiate the wages for union members on the assembly line, but it's not "ok" to let AIG or banks declare bankruptcy so they don't have to pay out bonus money to the people that bankrupted them in the first place. I don't get it? What am I missing?
Peace?
The only difference between the two is the color of the collar. White vs Blue. White collar workers can fail miserably and not only retain their job but get paid millions failing. Blue collar gets blamed for the collapse that the white collar caused.
is intended to be a factual statement
when a company is going through hard times, corporations should be able to apply the same principles to executives when their company is going through hard times.
..just for AIG's Financial Products unit.
http://online.wsj.com/article/SB1237078541133...
(Subscription required.)
let's do a comparison: the outraged and indignant demands made across the media landscape against those greedy unionized autoworkers that they scale back their extravagant lifestyles and forego that promised pension they spent their entire work years compiling against those 30 something finance whizbangs who lead us to this cliff: 'contractual oblications ... carry on."
time to bring back the guillotines.
Doesn't that Bankruptcy Law of 2006 give the right to close employee pension plans and abrogate union employment contract terms? I don't remember hearing of it being used against bonuses and golden parachutes.
It seems it doesn't stop the money going up to the executive floors, just what goes down to the work floors.
I know this was implied above, I just thought I would state it more obviously.
I was just thinking about the blue dog dems that are now fighting the new labor law are the people supported most by the DLC and Rahm. I'm glad that Governor Dean was able to get a few new progressive faces in with his fifty-state strategy. I'm sure glad Treasury Secretary Timothy F. Geithner has some working class credentials and will fight this out for the sake of balance. (Sarcasm).
Paul C
Revoke $1.6 billion in bailout money.
I think they've earned the right to be broken up into tiny bits.
These arrogant pricks are saying that the economy will fall apart without them, and that they won't stick around if they don't get bonuses.
It's bullshit, of course, but if you accept their delusions of grandeur for a moment, what they're really saying is that they demand millions of dollars for themselves or they'll sink the economy.
Oh and "I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them," Liddy wrote Wahhhhhhhh!1!!!!1!
me-oww!
arrogant
Some stuff you can't make up!
https://www.naca.com/index_main.jsp
Story about NACA:
http://rawstory.com/news/2008/Homeowners_grou...
According to Yahoo Canada:
The Wall Street Journal said Sunday that AIG boss Edward Liddy was planning to shell out 450 million dollars to executives at a London-based financial products division blamed for the company's fall from grace.
http://ca.news.finance.yahoo.com/s/15032009/2...
I have to go to work-- you decide.
far left loon >.<
The part that kills me is when they claim that they need the bonuses to keep the "talented" staff. It's this staff that drove these companies into the ground. How good can they be? This is nothing less than a group of people raping the taxpayer and it's criminal. There is no "talented" staff just a bunch crooks using a company and a line to pad a wallet.
chances are, after these people are done destroying a company like AIG they'll move on and kill another company and make just as much. If my job performance was like these guys I'd never be employed again.
Fire them all.
is intended to be a factual statement
and that stock ain't worth shit now. Where's my bonus?
I say let this "exceptional talent" out into the jobs market. If they're so talented, let them see who wants to hire them now.
There are plenty of people who are experts in this shit that have lost their jobs at Lehmann and Bear Sterns who have shown me that they are able to lose money just as well and just as fast as these AIG assholes. Let the AIG jerks go and replace them with Lehmann assholes.
What the a-hole from AIG ought to worry about is retaining his customer base and screw the "talented" people who placed them in the financial hole.
Any future money given to them needs to be "EARMARKED" so that they can't use it for bonuses and parties, etc. Don't let Gramps McCain hear this idea, or he'll start his bitching all over again.
The Audacity of Greed
Could not have been said it better ..
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
g gordon liddy?
Some stuff you can't make up!
I'd love to have 5 minutes alone with that douche bag.
AIG Says Societe Generale, Deutsche Bank Got US Aid
Bloomberg - 44 minutes ago
By Elizabeth Hester and Hugh Son March 15 (Bloomberg) -- American International Group Inc., the insurer saved from collapse by a US taxpayer bailout, said Societe Generale of France and Deutsche Bank AG of Germany led a group of 20 foreign and US banks ...
FACTBOX: Top 10 largest recipients of AIG money Reuters
AIG says 22 bln of govt funds paid other firms AFP
New York Times - International Herald Tribune - Business Wire (press release)
all 115 news articles »
http://news.google.com/news?pz=1&ned=us&ncl=1...
Basically AIG is an insurance company.
AIG owed that money on insurance policies they had sold to the Banks.
When will government of the people, by the politicians, for the corporations perish from this Earth?
Not soon enough!
so simple, huh...
This was payment for Credit Default Swaps written on, or as the basis for, the other banks Synthetic Collateralized Debt Obligations (CDOs).
We the peons are paying off the Fat Cat Bankers around the world.
Swaps are something like insurance but they are more like gambling.
Synthetic CDOs are rather complicated, put most simply they take a Swap written on an asset backed CDO as collateral and create a new CDO out of thin air.
If the Swap had been insurance it would have been regulated. They would have needed to have sufficient reserves.
It is not regulated and they didn't have reserves which meant they sold a lot more of them than they could pay off.
This was their Financial Services Unit in London which was essentially a Hedge Fund that wrote $440 billion worth of Swaps. The book value on the company was $100 billion.
We have given them $160 billion so far which means we have given them way more than they are worth. or can possibly pay back.
The outrage is that the Financial Modernization Act of 1999 allowed Commercial Banks, Investment Banks and Insurance Companies to all do the same things, to merge and sell each other securities could be mortgages, loans, credit card debt.
The Commodities Futures and Modernization Act of 2000 excluded Swaps from regulation and prohibited State gambling laws from being enforced.
This is all CRISIS 101. Here the best report so far.
Unfortunately it doesn't deal adequately with Credit Default Swaps or Synthetic CDOs.
statusquObama, change you can only pretend in
Instead of a cash bonus for these "talented people", maybe their bonus and their bosses' (Mr. Liddy) bonus ought to be a tour of duty in Afghanistan! That way they will have earned their BONUSES... right?
but i was listening to a conversation at the dinner table, where a 30 yr. old chicago market guy was talking about his new job, something about dealing in derivatives...
i grumbled, sort of, "hm, derivatives"...
he replied, "commercial." as if that mattered...
i don't know enough to have responded to that, but i was thinking "SO?"
so, does THAT make it better?
And no one is headed to AIG with a truck full of nooses because why? Retain "talented staff"? So that's what the kids are calling sociopathic thieves these days. These are the some of the same fucksticks that wrote all those derivatives. Bets that are bets made on bets, that's the reality of what these "financial instruments" essentially are. Some mother fuckers need to be removed from polite society, and in a very impolite manner.
Generally speaking I don't trust anyone making over 150K a year.
What is the definition of ownership? By every estimate I've seen the US taxpayers now own 80% of AIG. So buy them out, fire the board and the executives, and wait until the value improves. If they are such great Masters of the Universe, the US government should make out like a bandit. In the meantime, prosecute those who destroyed the economy with these card tricks, then pass some real regulation. Is that so frigging hard?
that I won't have to hear about 'merit' pay for teachers anymore.
Seems like the Teachers Union can use the exact same argument since apparently competence (at least competence in doing things legally/morally) isn't required in order to receive compensation.
We needed another FDR, instead we got another clinton.
The thing is, if these 'bonuses' are contractually obligated regardless of performance, then they are NOT bonuses. They're just different types of income, and if that's what these employees negotiated for, good for them.
The larger issue is this idea that this is 'market based'. Whats the argument here, that without bonuses these people will leave the company? First of all, WHO CARES? They failed. The company is a failure sucking at the govt tit for life-support. Why would you WANT to keep these executives. Secondly am I supposed to believe that these people could not be replaced? Ridiculous. Its not about compensation, its not about competition.
Quite simply its noblesse oblige. The idea is that due to the very nature of their work and the social strata they belong to, they are OWED this money. That has to end.
How the FUCK did our govt give this company 100+ billion dollars and get nothing in return in the way compromises in the way AIG does business. The time to argue about these bonuses was BEFORE we gave them the money. I don't want to hear about Geithner whining about how inappropriate this is. He had the power to do something about it before he gave the money.
I'm not mad at AIG as much as I am at our govt which seems to have the consumer savvy of retarded oyster.
They have the g*d damn nerve to ask for more money. Each person that got a bonus deserves to be dragged out into the street, robbed of all their money and possessions, and beaten to a bloody pulp.
Let AIG burn in hell.
NOBODY 2012
as I did I thought about all those fricken investment houses that are taking advantage as only they know how to do. And as my axe drove down into the ice, and as I watched the ice splinter into many pieces I thought about those banks and investment firms that got too big to control.
Jeanne
AIG would be out of business if it weren't for taxpayer money. They need to sit down, shut up and listen to what WE have to say.
I don't give a shit if they lose every employee, there are literally MILLIONS OF QUALIFIED FINANCIAL PEOPLE AROUND THE WORLD WHO ARE OUT OF JOBS AND WOULD LOVE TO WORK THERE WITHOUT MILLION-DOLLAR BONUSES.
"Retention" is code for "bullshit."
"The bigger/taller they are... the harder they fall" if not now, when?
A creature claiming privilege from oversight due to their sovereignty. An old country behemoth with tentacles reaching far and wide. What do we do? I have a strong feeling they are at the head table with the crookedest, conniving people of our time. I'm sure they are the glue that holds all the walking dead banks together. AIG staff losing their jobs is a mere ruse to the real issue.
Just Waite until we fund the FDIC, you know the one the banks were suppose to fund. It's all boiling down to political timing. I say nice try AIG, pack your bags and get the fuck out of America and just to let ya know, were taking all your US assets until you pay us back.
AIG, Board of Directors > http://phx.corporate-ir.net/phoenix.zhtml?c=7...
"The London unit of the world's largest insurer (by assets) sold credit protection Credit default swaps (CDS) on collateralized debt obligations (CDOs) that had declined in value."
Chronology of September 2008 liquidity crisis
[ http://en.wikipedia.org/wiki/AIG ]
Study the symptoms not the virus...
Do you remember that famous scene inside Rick's cafe in the movie Casblanca where the head of the police tells Rick, " I'm shocked, absolutely shocked that gambling has been going on here"? When all along he knew it and also participated. The same seems to be true of our elected officials. You mean to tell me that none in DC knew this was coming? Please, if you believe that I have a bridge in Brooklyn I'd like to sell you real cheap.
Those in DC will huff and puff as they always do at these "shocking" developments, but little if anything will be done about it in order to recoup the millions being paid out in bonuses. What is even more shocking which can be found a www.firedoglake.com is that of the billions that have already been given to AIG, only one third of it was given to US banks. The rest went to European banks to prop them up.
If your not outraged enough yet, just sit back and watch the comedy show that will now come out of DC and yet not one penny of our money will be returned. The joke is on us friends. The powers to be get to screw up something and we the unclean masses always are the ones left to clean up the mess. The math is simple to understand. There are way more of us than there are of them. So we're the lucky ones in getting our pockets picked plain and simple.
Many of us live every day with fee schedules set by the government. We save lives as MD's and don't steal from the people. Just how arrogant and self-important are these people? Maybe AIG should fail.
Why in the he** would anyone want to retain such incompetent, venial, useless employees?!!
AIG ships billions in bailout abroad
Snip - "Billions of American taxpayer dollars used to bailout insurance giant AIG are flowing to some of the largest foreign banks in the world, according to new documents released by beleaguered company Sunday."
[ http://www.politico.com/news/stories/0309/200... ]
Study the symptoms not the virus...
it's telling when Stephonopolis cites that the top execs are foregoing the bonuses and the rest "range from in the thousands to up to six million" in a way that seems to dismiss the notion that this is a big problem.
I don't know how much George is making these days but "the thousands" would do me just fine and 6 million comes out of a whole heap of working people's pockets.
The concern should not be that these "talented" people might jump ship. AIG should fire their sorry, incompetent asses.
.
THAT BONUS MONEY BELONGS TO WE, THE PEOPLE!!!
.
Starve the WAR Beast...
... Save the World.
You know I don't blame them for ripping you guys off in a sense. I just really don't see the outrage. I come here and this topic gets 64 comments while the two Cheney stories get near 180 or so comments combined. You people are more concerned about what this wind bag has to say than you are about being screwed out of 450 billion. Holy fuck try and keep your eye on the ball here people. Cheney is neither here nor there. Seriously I'd keep ripping yas off.
We get it a lot easier that Dick is a dick. And it's easy to say.
This involves thinking and shit.
me-oww!
I have 2 years in Business and a Technologist diplomat, maybe I can move down there and start selling them derivamagabers hmmmmm
The names should be published with bonus amounts and the public should know who these lowlifes are..
Any bailout moneys to corporations should be predicated on the reduction of wage differentials between the recipient's executives and median income Americans
Any company too big to fail is monopolistic and the public sector should have stopped them.. that's conservative capitalism
What the fuck is George Will's problem, and why does he hate the working poor so much? It's not working class Americans fault that the economy is in the state it is in. In reality it's the fault of the banks, corporate America, millionaires, and Wall Street. The people he is so quick to defend, are the people who created the problem. The greedy people who have so much, are also refusing to let the working class have homes, health care, and a decent quality of life. George Will is a greedy, corporate ass kissing, prick.
What talent? The talent to turn capitalism into cronyism? The talent to create the mess we're in while they're absconding to Aruba? Talent? To lie, cheat and steal? Talent? To make us believe we actually need them? Talent to make us believe the people they've mugged couldn't possibly do what they've done? Like we'd want them to? Like lack of integrity is talent? Dishonesty is talent? Like intimidation is talent we can't do without? Talent that creates an enconomy in which the lowest quintile of workers arent' paid a livable wage while they get freakin bonuses?
If they do, they should be sued for misappropriation of funds. Corporately and individually.
Goodnight, Frau Blücher
I have a perfect way for AIG to not pay the bonuses. Tell the greedy SOBs waiting with their hands out that they have a choice; no bonus and keep their jobs, or get fired on the spot.
I just cannot understand how in the world we are letting the government get away with subsiding corporate bonuses to the criminals who got us into this mess in the first place. The auto bailout comes with all kinds of strings attached, including one to reopen the collective bargaining agreement between the auto companies and their respective unions. But, for AIG's Financial Products unit, a contract is a contract? Come on! I wrote about this a bit more on my own corner of the web.
I haven't read all the comments, so I don't know if this has been said already. But they didn't seem to have a problem with forcing the regular auto workers to renegotiate their contracts. Isn't that a breach also? Guess only the big guys get the protection of the law.
My ass.... Let the company fail. The people running AIG are mother F'ers, politicians that stand by and hand them OUR MONEY are even bigger ones.... The Dems are going to have this shit blow up in their faces and it ain't gonna be pretty.
Like a magician used these tricks to divert attention from the real work going on. AIG is laundering Billions of dollars for it's clients.
Now that bailout money comes with strings attached; like Executive pay and Bonus reductions; companies are using AIG like a "Duty free" shipping hub. There are no Strings attached to bailout money they collect through AIG.
Donaldd
These aren't bonuses. It is hush money. This loot is going to the VERY division that caused this meltdown. The people who are getting 1K I can see but the ones who are getting 6,000,000 probably should looked into by the RICO division of the DOJ. I have a hard time believing that Holder hasn't gotten some teams of forensic accountants directed at AIG
"Yes, I get the argument. Derivatives are complex, and maybe we can't wait for someone new to get up to speed."
Well... not really. Derivatives aren't any more complex than other kind of big league wagering and certainly less complex than poker. Personally, I'm tired of this "brightest guys in the room" crap. People who work in theoretical physic are bright. Wall Street speculators aren't any smarter than anybody else. They're just greedier. The threat that they'll go elsewhere if not bribed is a bluff any good poker player would call.
From Firedoglake:
"Larry Summers says the government simply can't break the contracts that AIG had with executives, even as the Treasury is forcing auto companies to break their labor contracts as a condition of receiving TARP funds."
Riiight....
Comments are closed on this entry