Outrage grows over millions in AIG bonuses

“For them to simply sit there and blame it on the previous administration or claim contract—we all know that contracts are valid in this country, but they need to be looked at,” McConnell said. “Did they enter into these contracts knowing full well that, as a practical matter, the taxpayers of the United States were going to be reimbursing their employees? Particularly employees who got them into this mess in the first place? I think it’s an outrage.”

The time to do that was when the bail out was pushed through Congress last fall. It should have been extended with conditions. If the assumption was that these guys would follow the example of Lee Iaccoca, who ran Chrysler when it was bailed out back in the 1980s and accepted a salary of USD 1 while the company's restructuring was being underwritten by the taxpayers, well that was a misjudgment.

relax people. this is more media hype than anything.

AIG has contractual agreement with those who are receiving bonuses. If you were one of those who had a contract, I am sure you would make sure you get it too.

AIG has contractual agreement with those who are receiving bonuses. If you were one of those who had a contract, I am sure you would make sure you get it too.

Isn't that the source of the problem. They have sold us all down the river so they can get their fat cat bonuses. The whole system lacks any credible accountability on the behalf of those who were in it for their own personal gratification. I think we can safely say that everyone requires insurance, however I think a revolt by the general public is coming closer by the day. To have your taxes raised in order to bail out these conglomerates, and then watch as they throw champagne at each other in the way of bonuses is just taking the biscuit.

It's the American way: welfare for the rich and "free markets" for the poor.

If a company in trouble are contractually bound to pay bonuses to executives to the tune of 165 million, then it is not a bonus. Its a salary.

If it were a bonus then they could reduce the amount drastically. Or, if the bonuses are mathematically tied to profits, then they lied about being in trouble.

What you do with leeches is burn them off with a lighter.

Earlier this month, in reference to lawmakers request for a list of AIG's counterparties, U.S. Rep. Carolyn Maloney, D-New York, told CNNMoney it was critical to determine whether AIG's collapse would have resulted in a market catastrophe.

"We were told AIG posed systemic risk to our economy," she said. "How do we know if that's true if we don't know where the money went?""

This is the problem. Don't provide bailouts at all. Let the companies fail. Believe me, we can handle it much more than what is being reported.

AIG has contractual agreement with those who are receiving bonuses. If you were one of those who had a contract, I am sure you would make sure you get it too.

Is there also something in the contract that says the government has to bail out AIG? If AIG feels it must respect the contract and give bonuses, then maybe the government should just let AIG fail. Let them fail.

What you do with leeches is burn them off with a lighter.

Hmmm, now there's an interesting option.

Is there also something in the contract that says the government has to bail out AIG?" Its the idea that its failure would cause chaos. I say let it. We are stronger than we are led to believe. I personally think we could whether a financial failure if that was what really was going to happen. Notice how Citi all of a sudden found that they have money?

Insurance is sold by fear, fear gets people elected and it helps people get rich!

It's the American way: welfare for the rich and "free markets" for the poor." Ok, so every rich person is getting bailed out? What is rich to you? I would never agree giving an large company any kind of bail out, but I would also not give in into those who can't handle their own finances either, nor do I like just giving welfare to able bodied men and women who go out and work, even for minimum wage. As least large companies give something back in return.

They shouldn't get bonuses , they should be sentenced to life in prison with hard labour. They are scum.

how can you get a bonus when your company needs aid to survive????? That defies belief!!! How did they earn it! To hell with them!

Skip: "We were told AIG posed systemic risk to our economy," she said. "How do we know if that's true if we don't know where the money went?""

I know its not your question, and that you only presented it. But I don't follow it. The two parts: AIG collapsing being a risk and the knowledge of where the money went are not directly related. Not in my mind anyway.

I could see how knowing what debts AIG paid off with the bailout money being helpful to determining that, but its not the only or best criteria in my opinion.

The real questions are: Would an AIG bankruptcy have crippled the economy? And: Was a bailout necessary for AIG to avoid bankruptcy? If the answers are both yes, and the governmental idiots thought they were, and AIG did not go bankrupt, the question of where the money went does not seem to be worth asking. They should have known the answers to both before giving up the money with no strings.

However, in my somewhat uniformed opinion, I never really thought the bailouts were necessary for the economy or for so many companies. Bankruptcy always seemed to work just fine to me. It smelled like a scam to me from the beginning, not sure if it was GWB and pals or the Democratically led Congress or a collusion of both.

But how am I supposed to know if these companies are really on the brink? How am I supposed to know if those companies going down are really going to trigger a meltdown?

All I can tell you for sure is that the American people are some of the most deep down chicken hearted people on the planet. They seem to be constantly guided by fear of this or worry of that. Play a fear card and they will buy, pay, attack, over-legislate, or crackdown on anything or anyone, except guns, because they need those to keep their chicken hearts beating. Unlike so many of countrymen, I expect I will live a long life, because I don't panic so easy. My heart is doing just fine and seems to be of normal human size.

Strange Normal workers bonuses relate to a job well done, But a CEO can run a company down to the grond and still receives his bonus, i am in the wrong line of work.

You see, AIG was at the root of the entire financial crisis. It was the one that came up with the credit default swaps, and part of its opperating proceedure was to take on a massive amount of risk (which they believed negligable at the time, due to the myth that real-estate values never go down, only up). Banks bought their "risk free" financial product assuming that AIG would be able to cover any losses from loan defaults. The problem was especially bad in Europe, where the banks have much lower cash reserves and were massively over leveraged.

To put it consicely, if AIG goes down it takes all of Europe with it, and the world economy follows. So say the financial heirophants.

This is an outrage indeed. Bonuses and stock options are given to managers who perform. Not to those who ruin a company. The company facing lawsuits by who? The incompetent clique who didn't do their jobs, represented by vulture lawyers who smell fat bonuses too? Something wrong with the equation. It's the latter two groups that need to be sued. Honoring contracts? The first ones who did not honor contracts were those responsible for the downfall of the company. They did not do their jobs.

If they insist on taking a bonus, pay it in credit default swaps!

To put it consicely, if AIG goes down it takes all of Europe with it, and the world economy follows" That can be true, but in this day and age, I think letting these big fail would actually benefit the masses as long as we can whether it for a few years.

likethis: damn good post. We don't normally agree on things, but your post was well worth the time to read it on my tiny little cell phone screen "All I can tell you for sure is that the American people are some of the most deep down chicken hearted people on the planet. They seem to be constantly guided by fear of this or worry of that. Play a fear card and they will buy, pay, attack, over-legislate, or crackdown on anything or anyone, except guns, because they need those to keep their chicken hearts beating. Unlike so many of countrymen, I expect I will live a long life, because I don't panic so easy. My heart is doing just fine and seems to be of normal human size." Love That!

I agree that the CEOs are legally, not morally or rightfully, but legally, entititled to their bonuses. But...as I stated earlier, I think they should be presented their bonuses at a public forum, attended by the workers and beneficiaries of AIG, right after the aforementioned people had the opportunity to air their grievences to the CEOs faces. Then...the bonuses should be paid in pennies.

Taka

Let's have some more talk about how limiting C level compensation puts companies at a disadvantage in hiring the best and brightest. Yeah right, we should all be outraged and should have been outraged before the crash at the growing sproed between middle management and rank and file employees and the C level people.

Was reading about how Rep Barney Frank is one of those criticizing this. Considering he is one of the primary reasons for the housing crash, I find that ironic in the extreme.

I don't believe that it's ethically right to include bonures in an employment contract, where even in failure of the company, you're entiltle to such bonuses especially when your company has fallen into a point where the company is below water.

Any company that does that says, screw you investors, no matter what you will be giving to failures. This is a great example of how they became failures.

I'm not invested or insured by AIG. But if I was, at the most opportune time I'd be leaving and taking my business/money somewhere else. < :-)

which they believed negligable at the time, due to the myth that real-estate values never go down, only up...

People keep saying that "we need to give out the bounses so that we keep the best employees around to help get AIG (or any other recipient) out of trouble.

I submit that anybody who has been watching the Japanese economy since 1985 and on should have understood that property values can (and will) go down.

So as far as I am concerned let the supposed geniuses loose their bonuses. If they don't like it they can find new jobs. Probably with the SEC or congress.

This would be hilarious if it came from the Onion, but it is from the NYT business section.

"A.I.G. had set up a special bonus pool for the financial products unit early in 2008, before the company’s near collapse, when problems stemming from the mortgage crisis were becoming clear and there were concerns that some of the best-informed derivatives specialists might leave. It locked in a total amount, $450 million, for the financial products unit and prepared to pay it in a series of installments, to encourage people to stay."

In other words, it is a retention bonus, not a performance bonus. They had to stay around because they were the only people who knew how they had screwed up, and so the only people possibly capable of unscrewing things up. They couldn't unscrew things of course, however they did stick around and now want their bonuses, because they have a contract. Good work if you can get it!