MM and Jan seem to be the best two informed here on this matter and I believe they are mostly right in their opinions. While this is no small amount of money it’s 1/10 of 1% of the funds given to AIG for the bail out and much of that money is a loan with a 2 yr term and an interest rate of LIBOR + 800 basis points. These bonuses were the same the employees received the prior year and AIG had a $450 million pool set up for them in early 2008 well before any government money. The folderal over this is nothing more that a bunch of political hacks who use sound bites to rally John Q Public into a mob action for no good cause other than their own political ambitions and to cover their own screw-ups. They are good at what they do though, they turned this into an emotional issue knowing full well people rarely let facts effect their emotions.
Aren’t bonuses tied directly to the overall success of a company and the success of the individual employee who receives it. Who gives out bonuses for failure! Give the money back to the American people!!
Please go back and read before making comments. For the 1,000,000 time it was not a PERFORMANCE bonus it was an INCENTIVE bonus. Not that this hasn’t been addressed everyday for the past three weeks.
They were given a bonus to stay and finish their jobs rather than run when the company was failing.
Sure, retention or incentive it has been both ways for the past three weeks. The president referred to it as incentive (to not leave) congress is calling it retention…..six of one half a dozen of the other
Retention or Performance…who cares!! It wasn’t AIG’s money to give. It is the American people’s money! AIG employees contracts regarding any kind of bonus should be null and void when the company does not have the money to continue without a bailout.
Giving back the “retention” bonus is not so bad when you get to keep your job. Ask all of the unemployed people. Now if you want to give them an incentive, set them up with a future “performance” bonus.
The government does need to look before it leaps. I did notice that those not giving back are from outside the US.
So Jen, who was the idiot that decided that it was a really good idea to pay over $160 million in bonuses to retain the same people who had already lost the company untold tens of billions of dollars?
I am not arguing that the amount of the bonuses were out of line, nor am I arguing that the idiots that received them were probably not worth it. I am merely stating the facts, it was not linked to performance as RM asked (again for the 1,000,000 time) it was not because they did a good, bad or mediocre job. It was to keep them from leaving while they shut down the unit that toppled the company. To keep the conversation intelligent we may as well act like we at least kind of know what we are shouting about on these posts.
I HEARD YESTERDAY THAT THE BONUS AMOUNT WAS $50 MILLION MORE THAN THE $165 MILLIONM REPORTED!!!!!! SO, ADD MORE NAMES TO THE LIST AND LET’S GET THAT $$$$ BACK!!!!
The additional $50M that is being referred to were already paid in 2008 (approved by the Fed/Treas/Gov’t). The politicans are always last to the dance. This does not appear to be new information. These were disclosed in the company’s 10K and to the SEC. Do they even read anything? Oh, why am I even asking…forget they did not read the bill that was signed!
Sadly we do not who at AIg got the bonuses. The company continues to earn money on personal & commercial lines and make money at it.
The finacial division which sold the CDS’s caused the problem. Sadly most of the gov’t loans went to pay for those instruments which were in fact a vacuum that sucked the life right out of the company.
If we truely want to punish those whoe began selling those & really activly pushed for more you have to go to England which is where they did originate. Here just look to M. Greenberg. It was under his direction that these instruments were heavly invested in.
It was also M. Greenberg who was at the helm when the finacials were played with and those lovely deals with Mr Buffet’s company for the hoax of reinsurance was perpatrated.
If we really need someone to vent our anger at it should not those people working at AIG in the divisions making money that hopefully will pay us all back. We need to look at the former CEO who allowed this to happen.
Does anyone wonder why he was voted out of his job? ? ? Too bad it came too late to avoid the problems that they are now facing.
Jen – I commend you for trying to set people straight.
I am not a supported if AIG, they are a direct competitor of mine and I believe the organization as a whole should be held accountable for its mistakes.
However, I find it alarming that there is this mob mentality out to hang AIG for its actions but not for our elected officials. They are the ones that allowed this to happen. Dodd (and many others) were fully aware of theses bonuses and actually drafted language (though not implemented) in the original bail out terms to ALLOW THE BONSUS. Yell at your elected officials. Go picket their houses. They are setting the rules; AIG is just playing by them.
Just offer a reward..-it could be as little as , say $100,000 or maybe as much as $1mil, and someone will rat-out those 5 creeps.
And won’t it be sweet if the recipient of the reward was one of the 15..who stepped up to the plate and did the right thing
Yeah, sweet !
I find it disgusting that people are talking about rewards to “get” those people who are legally entitled to the money. Why is it wrong to enforce an employment contract? It might have been a stupid decision to write contracts with these bonuses but not one person has suggested the bonuses in any way were gained illegally. I am just amazed that some many have voluntarily given up these large bonuses and can only assume it was done so as to not make yourself radioactive to other employers. It will be interesting to see if the IRS tries to tax the people who gave the $ back as,strictly speaking, the bonus is income even if they voluntarily give it back.
While I completely agree with most of your comment, I do have one question.
How stupid does someone have to be to hire a person who lost their prior employer untold tens of billions of dollars?
Which also makes me wonder why a retention bonus was ever necessary. A year ago, did the Detroit Lions have to pay Matt Millen a retention bonus to keep him from signing with a different team?
Jen, your dealing with the same clown posse that blogs here everyday….oh by the way AIG is still here. The media has decided AIG should be the scapegoat for the entire economic crisis….the idiot mullets need to put a face on the crisis and they will call it AIG.One more point, the people that received the bonus money were not the slugs that brought down the company….Cassano is long gone.
Why aren’t these bastards coughing up their bonus money? They’re employed by the same company and were significantly involved in this fiasco. Let’s bet they’ll hold true to form and keep the money which is about 60% of all the bonuses paid. It is an “International” company. We shouldn’t forget that.
This is what I mean, you are not even reading the persons comments. Just going through everything and trying to find a mistake. Not even a mistake that matters…spelling, definitions. We all know what a blog is that wasnt Wazzup’s point.
However, when their performance has dang near bankrupted our country many of us can’t understand why they were retained. You are saying the situation could have been worse if they would have left? Myself and a few million others can’t imagine how.
Legal, yes. Moral, I don’t think so. Wise to accept those bonuses? Nope. If I was in the same boat and heard all the hoopla going on over this I would not want any part of it no matter how large.
UW lets take a diff tack.
Lets say this was an nuclear power plant assembly biz. ANd lets say they were shutting down…but still had some product to deliver.
Does the company want unskilled persons assembling the product? Or new staff that would first have to be trained for a time before being turned loose?
No…you would want your best…so you would take steps to guarantee those persons most able were there until the end.
Back to the real situation…rememeber the analagy above. These dirivities were so complicated that in order to close them out correctly it was necessary to have the persons who assembled them on hand to “take them apart”. This is why the retention incentives were done.
Now as for them being the ones who undid the company…truth be known I bet that they were just cogs in the wheel “doing their jobs” (and getting well paid for it) and not the originator of the program. Remember that some of these deals go back 7+ years from what I recall reading.
Again…illegal? No! Immoral on the part of the individuals…well that is up to each persons own standards. Immoral on the part of AIG…again…hard to make a comment without having been in the room when the discussions were had. These persons saw their jobs going away and were asked something to the effect “What will it take for you to stay to the end?”
They looked at the economy and state of the industry. Likely thought (I know I would) … hrm it is a pretty tough job market out there right now…and it is only going to get worse. I best ask for a few years salary to hold me over until I can find a position that will afford me the standard of living I am accustomed to.
Personally am I upset? No…cause again it is a drop in the bucket when I view the total picture.
Am I in the same payscale as those individuals…god I wish!
Interesting letter. From what I gather…seems these people have been working last several months with no day to day pay, just the retention incentive payment at the end.
“Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid.”
That statement alone says it all…I wonder why Libbey did not tell the Senators/Reps about this when he was sitting before them!
These persons had a contract that in effect said “for $X.xx to be paid at end of contract you will unwind this division” and these persons lived up to their end of the deal…but AIG was “forced” into backing out after a good deal of the contracted work had been done. IN truth..seems that AIG is getting a good deal. They got the work they needed and did not have to pay for it!
It goes to show a dollar is what they are worth. This guy is a “Quant,” or number cruncher who was overpaid for years. He thinks he earned that money, but he didnt. He did nothing to actually create wealth.
That is why the company failed, he is just lucky he doesn’t have to pay back all the millions he has taken from AIG from crunching BS numbers.
If a child did his job woulda crayon, would AIG be any worse off right now?
Joe, you are under the impression that because he could play with a computer that he “earned” all those millions.
Why do you feel bad for him? While he worked there, his company went under. Thats too bad, now they dont have the money to pay him, so what? He thinks that the company going under had nothing to do with him, but in fact its the same company that handed him all that wealth that he now enjoys.
His manager is the only one who screwed him because he talked him into working for free, which is really all he is worth anyway.
Think about it, this guy was given so much money that he can live in a multi million dollar house on an income of $1.
I am so tired of hearing about AIG and the bad things they did with their money. Yes it was ill advised to dish out bonuses – yes they made a mess of their operation – but what I can’t understand is why isn’t there more disclosure in the media about other businesses, banking, insurance and investment agencies that are taking tax dollars and using them for their own financial gain? Perfect example:
CRC Insurance Services Inc., an insurance subsidiary of NC regional bank BB&T Corp., acquired Tapco Underwriters Inc (a wholesale insurance agency) as well as Cananwill Premium Funding.
BB&T was one of more than 100 banks that recently received funds as part of the government’s $700 billion TARP investment program. The program, administered by the Treasury Department, calls for it to provide fresh capital to banks amid the credit crisis in an effort to spur lending.
BB&T received $3.13 billion as part of the program.
Of that, they spent “undisclosed millions” to essentially add another feather in their cap instead of making those monies available to borrowers.
Talk about “MEDIA MALPRACTICE” Maybe someone should take a page out of Santa’s book – Start a LIST and knocking on a few more doors to find out what these people are using OUR bail out money for…
AIG isn’t the only company that is hiding behind closed doors – They’re just the media scape goat
In the one I read, the writer said he worked for a year for $1. However, he also said that at the time he agreed to do this, he was given a contractual guarantee that he would be paid $1 million at the end of that year.
I can’t speak for you but I would take that deal in a heartbeat. How much do you make that you think a person works for $1 million per year only out of a sense of duty to his company and country. Who cares if it’s back end loaded?
The letter is self serving. This person is not a victim, he just wants to pretend he is.
riiiiiight…they got these bonuses to stay on and finish their jobs rather than run when the company was failing….NEWSFLASH!!! A “handful” did run, and more will follow..they should all run off the nearest bridge.
I wonder if the NY Times paid him for his letter? This guy is not a victim. He knew, just like the rest of them, exactly what was going on and also did nothing to stop it. I don’t feel sorry for him at all.
Giethner and Dodd knew all about it when they were writing the original bailout back in March of last year. Then again, Dodd was busy counting all the money AIG was giving him, so maybe he didn’t have time to read the whole bailout bill.
MM and Jan seem to be the best two informed here on this matter and I believe they are mostly right in their opinions. While this is no small amount of money it’s 1/10 of 1% of the funds given to AIG for the bail out and much of that money is a loan with a 2 yr term and an interest rate of LIBOR + 800 basis points. These bonuses were the same the employees received the prior year and AIG had a $450 million pool set up for them in early 2008 well before any government money. The folderal over this is nothing more that a bunch of political hacks who use sound bites to rally John Q Public into a mob action for no good cause other than their own political ambitions and to cover their own screw-ups. They are good at what they do though, they turned this into an emotional issue knowing full well people rarely let facts effect their emotions.
I don’t expect to get all the names – just leak the one in the top ten who didn’t return his bonus!
There was nothing illegal about the incentives…moral is perhaps another argument.
Releasing any names would be political blackmail!
While the bonuses appear to be legal, congress should have closed the gap on the loop hole allowing it PRIOR to giving them a dime!
Aren’t bonuses tied directly to the overall success of a company and the success of the individual employee who receives it. Who gives out bonuses for failure! Give the money back to the American people!!
Please go back and read before making comments. For the 1,000,000 time it was not a PERFORMANCE bonus it was an INCENTIVE bonus. Not that this hasn’t been addressed everyday for the past three weeks.
They were given a bonus to stay and finish their jobs rather than run when the company was failing.
Correct?
Sure, retention or incentive it has been both ways for the past three weeks. The president referred to it as incentive (to not leave) congress is calling it retention…..six of one half a dozen of the other
As long as we stop calling it perfomance
Retention or Performance…who cares!! It wasn’t AIG’s money to give. It is the American people’s money! AIG employees contracts regarding any kind of bonus should be null and void when the company does not have the money to continue without a bailout.
Giving back the “retention” bonus is not so bad when you get to keep your job. Ask all of the unemployed people. Now if you want to give them an incentive, set them up with a future “performance” bonus.
The government does need to look before it leaps. I did notice that those not giving back are from outside the US.
So Jen, who was the idiot that decided that it was a really good idea to pay over $160 million in bonuses to retain the same people who had already lost the company untold tens of billions of dollars?
What does it take to get fired over there?
I am not arguing that the amount of the bonuses were out of line, nor am I arguing that the idiots that received them were probably not worth it. I am merely stating the facts, it was not linked to performance as RM asked (again for the 1,000,000 time) it was not because they did a good, bad or mediocre job. It was to keep them from leaving while they shut down the unit that toppled the company. To keep the conversation intelligent we may as well act like we at least kind of know what we are shouting about on these posts.
I HEARD YESTERDAY THAT THE BONUS AMOUNT WAS $50 MILLION MORE THAN THE $165 MILLIONM REPORTED!!!!!! SO, ADD MORE NAMES TO THE LIST AND LET’S GET THAT $$$$ BACK!!!!
Jen:
Fair enough. I wish you well in your endeavor but I feel compelled to admit that I’m not overly optimistic.
Neither am I…but still trying to fight the good fight. I hold out hope that mob mentality will not always win *sigh
The additional $50M that is being referred to were already paid in 2008 (approved by the Fed/Treas/Gov’t). The politicans are always last to the dance. This does not appear to be new information. These were disclosed in the company’s 10K and to the SEC. Do they even read anything? Oh, why am I even asking…forget they did not read the bill that was signed!
Sadly we do not who at AIg got the bonuses. The company continues to earn money on personal & commercial lines and make money at it.
The finacial division which sold the CDS’s caused the problem. Sadly most of the gov’t loans went to pay for those instruments which were in fact a vacuum that sucked the life right out of the company.
If we truely want to punish those whoe began selling those & really activly pushed for more you have to go to England which is where they did originate. Here just look to M. Greenberg. It was under his direction that these instruments were heavly invested in.
It was also M. Greenberg who was at the helm when the finacials were played with and those lovely deals with Mr Buffet’s company for the hoax of reinsurance was perpatrated.
If we really need someone to vent our anger at it should not those people working at AIG in the divisions making money that hopefully will pay us all back. We need to look at the former CEO who allowed this to happen.
Does anyone wonder why he was voted out of his job? ? ? Too bad it came too late to avoid the problems that they are now facing.
The truth is hard to shallow but this is it.
Jen – I commend you for trying to set people straight.
I am not a supported if AIG, they are a direct competitor of mine and I believe the organization as a whole should be held accountable for its mistakes.
However, I find it alarming that there is this mob mentality out to hang AIG for its actions but not for our elected officials. They are the ones that allowed this to happen. Dodd (and many others) were fully aware of theses bonuses and actually drafted language (though not implemented) in the original bail out terms to ALLOW THE BONSUS. Yell at your elected officials. Go picket their houses. They are setting the rules; AIG is just playing by them.
Just offer a reward..-it could be as little as , say $100,000 or maybe as much as $1mil, and someone will rat-out those 5 creeps.
And won’t it be sweet if the recipient of the reward was one of the 15..who stepped up to the plate and did the right thing
Yeah, sweet !
I find it disgusting that people are talking about rewards to “get” those people who are legally entitled to the money. Why is it wrong to enforce an employment contract? It might have been a stupid decision to write contracts with these bonuses but not one person has suggested the bonuses in any way were gained illegally. I am just amazed that some many have voluntarily given up these large bonuses and can only assume it was done so as to not make yourself radioactive to other employers. It will be interesting to see if the IRS tries to tax the people who gave the $ back as,strictly speaking, the bonus is income even if they voluntarily give it back.
While I completely agree with most of your comment, I do have one question.
How stupid does someone have to be to hire a person who lost their prior employer untold tens of billions of dollars?
Which also makes me wonder why a retention bonus was ever necessary. A year ago, did the Detroit Lions have to pay Matt Millen a retention bonus to keep him from signing with a different team?
Jen, your dealing with the same clown posse that blogs here everyday….oh by the way AIG is still here. The media has decided AIG should be the scapegoat for the entire economic crisis….the idiot mullets need to put a face on the crisis and they will call it AIG.One more point, the people that received the bonus money were not the slugs that brought down the company….Cassano is long gone.
Look up the definition of a blog. This is a comment section at the end of an article, not a blog.
Why aren’t these bastards coughing up their bonus money? They’re employed by the same company and were significantly involved in this fiasco. Let’s bet they’ll hold true to form and keep the money which is about 60% of all the bonuses paid. It is an “International” company. We shouldn’t forget that.
This is what I mean, you are not even reading the persons comments. Just going through everything and trying to find a mistake. Not even a mistake that matters…spelling, definitions. We all know what a blog is that wasnt Wazzup’s point.
Mike, are you familiar with the forest and the trees…I will look up blog while you look up fact.
Jen, you are right. These were retention bonuses.
However, when their performance has dang near bankrupted our country many of us can’t understand why they were retained. You are saying the situation could have been worse if they would have left? Myself and a few million others can’t imagine how.
Legal, yes. Moral, I don’t think so. Wise to accept those bonuses? Nope. If I was in the same boat and heard all the hoopla going on over this I would not want any part of it no matter how large.
UW lets take a diff tack.
Lets say this was an nuclear power plant assembly biz. ANd lets say they were shutting down…but still had some product to deliver.
Does the company want unskilled persons assembling the product? Or new staff that would first have to be trained for a time before being turned loose?
No…you would want your best…so you would take steps to guarantee those persons most able were there until the end.
Back to the real situation…rememeber the analagy above. These dirivities were so complicated that in order to close them out correctly it was necessary to have the persons who assembled them on hand to “take them apart”. This is why the retention incentives were done.
Now as for them being the ones who undid the company…truth be known I bet that they were just cogs in the wheel “doing their jobs” (and getting well paid for it) and not the originator of the program. Remember that some of these deals go back 7+ years from what I recall reading.
Again…illegal? No! Immoral on the part of the individuals…well that is up to each persons own standards. Immoral on the part of AIG…again…hard to make a comment without having been in the room when the discussions were had. These persons saw their jobs going away and were asked something to the effect “What will it take for you to stay to the end?”
They looked at the economy and state of the industry. Likely thought (I know I would) … hrm it is a pretty tough job market out there right now…and it is only going to get worse. I best ask for a few years salary to hold me over until I can find a position that will afford me the standard of living I am accustomed to.
Personally am I upset? No…cause again it is a drop in the bucket when I view the total picture.
Am I in the same payscale as those individuals…god I wish!
Here’s two names that people need to know: Barney Frank and Christopher Dodd!
Yeah, I’m known for making stupid comments here, but this one is pretty serious. Check this out if you haven’t already seen it:
http://www.nytimes.com/2009/03/25/opinion/25desantis.html?_r=2
Yea, that guy gets what he deserves. He was overpaid and worked for a failed company. Did his manager screw him over? Yea. Is that my problem? No.
If he can afford to live and work in Connecticut for $1 and still live well, he must have taken a lot of money over the years from AIG.
But it was all BS, and he really added nothing, so now he gets nothing, because the company failed.
Dont let the doorknob hit you, if youre so great, then work some place else that can afford to pay you, because us taxpayers cannot do it anymore.
Wow, that is a powerful letter. I think everyone needs to read it.
Interesting letter. From what I gather…seems these people have been working last several months with no day to day pay, just the retention incentive payment at the end.
“Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid.”
That statement alone says it all…I wonder why Libbey did not tell the Senators/Reps about this when he was sitting before them!
These persons had a contract that in effect said “for $X.xx to be paid at end of contract you will unwind this division” and these persons lived up to their end of the deal…but AIG was “forced” into backing out after a good deal of the contracted work had been done. IN truth..seems that AIG is getting a good deal. They got the work they needed and did not have to pay for it!
It goes to show a dollar is what they are worth. This guy is a “Quant,” or number cruncher who was overpaid for years. He thinks he earned that money, but he didnt. He did nothing to actually create wealth.
That is why the company failed, he is just lucky he doesn’t have to pay back all the millions he has taken from AIG from crunching BS numbers.
If a child did his job woulda crayon, would AIG be any worse off right now?
did we read the same letter?
Joe, you are under the impression that because he could play with a computer that he “earned” all those millions.
Why do you feel bad for him? While he worked there, his company went under. Thats too bad, now they dont have the money to pay him, so what? He thinks that the company going under had nothing to do with him, but in fact its the same company that handed him all that wealth that he now enjoys.
His manager is the only one who screwed him because he talked him into working for free, which is really all he is worth anyway.
Think about it, this guy was given so much money that he can live in a multi million dollar house on an income of $1.
I dont feel bad for him.
IN MY PAPER STORY ABOUT SORRY KIDS, FIELD TRIPS MAY BE CANCELED. AND THAN WE HAVE AIG. GET MY PONIT.$165 million in executive pay at …
Check out this…this on hits it right on the head! click the link below…then look for the comment by Jon Bennett – 2nd one down.
http://www.usnews.com/blogs/the-inside-job/2009/03/25/jake-desantis-a-defense-of-aig-bonuses/comments/2
I am so tired of hearing about AIG and the bad things they did with their money. Yes it was ill advised to dish out bonuses – yes they made a mess of their operation – but what I can’t understand is why isn’t there more disclosure in the media about other businesses, banking, insurance and investment agencies that are taking tax dollars and using them for their own financial gain? Perfect example:
CRC Insurance Services Inc., an insurance subsidiary of NC regional bank BB&T Corp., acquired Tapco Underwriters Inc (a wholesale insurance agency) as well as Cananwill Premium Funding.
BB&T was one of more than 100 banks that recently received funds as part of the government’s $700 billion TARP investment program. The program, administered by the Treasury Department, calls for it to provide fresh capital to banks amid the credit crisis in an effort to spur lending.
BB&T received $3.13 billion as part of the program.
Of that, they spent “undisclosed millions” to essentially add another feather in their cap instead of making those monies available to borrowers.
Talk about “MEDIA MALPRACTICE” Maybe someone should take a page out of Santa’s book – Start a LIST and knocking on a few more doors to find out what these people are using OUR bail out money for…
AIG isn’t the only company that is hiding behind closed doors – They’re just the media scape goat
Joe Mama:
What letter did you read?
In the one I read, the writer said he worked for a year for $1. However, he also said that at the time he agreed to do this, he was given a contractual guarantee that he would be paid $1 million at the end of that year.
I can’t speak for you but I would take that deal in a heartbeat. How much do you make that you think a person works for $1 million per year only out of a sense of duty to his company and country. Who cares if it’s back end loaded?
The letter is self serving. This person is not a victim, he just wants to pretend he is.
riiiiiight…they got these bonuses to stay on and finish their jobs rather than run when the company was failing….NEWSFLASH!!! A “handful” did run, and more will follow..they should all run off the nearest bridge.
I wonder if the NY Times paid him for his letter? This guy is not a victim. He knew, just like the rest of them, exactly what was going on and also did nothing to stop it. I don’t feel sorry for him at all.
Giethner and Dodd knew all about it when they were writing the original bailout back in March of last year. Then again, Dodd was busy counting all the money AIG was giving him, so maybe he didn’t have time to read the whole bailout bill.