What's so wrong with the AIG bonuses?

[Sequoia]

Am I the only one on the planet who things the government has no business telling a company what and how to pay its employees?

The bonus program, I am told, was put in place as an employment agreement long before the financial market upset or the bailouts. As a former employer, I know that you are bound by law to uphold your employment agreements and their are stiff penalties if you don't.

With the congress now wanting to assess a 90% punishment tax on a select few citizens, (the AIG bonus recipients), aren't we back to the days of King George in England?? Isn't that why we broke away and formed a constitution to protect the citizens from the government?

If Congress can target AIG employees, who is next? Bill Gates because of how much money he already has? Larry Flynt because he make money off porn? Car wash owners because they .. according to the libs .. abuse their workers and exploit them?

America is changing. And it is not getting better. I wish the government would get the hell out of trying to run companies. I am a substantial shareholder in a company yet I can't dictate what bonuses are paid or not; why should the government have that power?

 

[rph9168]

I'd rather not start an argument here but the government owns 80% of AIG. That should give them at least some voice in decision's regarding bonuses. As far as employment contracts - I would like to see a challenge by someone working for a failing company getting a fat bonus. I was once told by a very astute and successful contract lawyer that there has never been a contract written that can't be broken. Seems to me that this might be a interesting test of that statement.

While I disagree with the bailout I also feel bonuses for employees at a company that is doing so badly seems like giving the Captain of the Titanic the Navigator of the Year Award. If the company is begging for government assistance they need to show their real owners - the taxpayers - that they will use that money wisely to eliminate the problem and repay the loan. Giving money out in the form of bonuses when the company is bleeding badly leads me to question the current leadership of AIG and doesn't bode well for their future.

As a side note I find it rather amusing that Chris Dodd on camera on CNN said he knew nothing of the clause added to the bailout that allowed the bonuses and two days later when it was proven that he was indeed the author he said his statement was misunderstood. Hard to argue that when that is exactly what he said on camera. BTW - AIG is headquartered in the state he represents and was a large contributor to his campaign. Coincidence? I think not.

 

[Jeff_L]

I am not a debate person, nor do I pretend to understand all politics. However, in my opinion, if a company received bailout money because they needed it to stay open, then no one in the company should be receiving bonuses. Bonuses are the financial reward for an organization doing well, achieving goals, etc.. I hardly believe that a company not able to sustain itself and needing money from the government is achieving its' goals.

The issue here is that the company received taxpayer money, which some of it went to the bonuses. Had they not received any taxpayer money, I wouldn't care who received bonuses and for how much.

If you ask for gov't money, you have to play by their rules.

 

[Sequoia]

Mob rule

Think of this from the employee's perspective.

You agree to take a job, you negotiate a salary and bonus plan, and you start working. You turn down other potential jobs because this one is the best-- working for AIG.

You hit your performance goals, and are waiting for the bonus to be paid. It is a legal contract between an employee and employer. The bonus gets paid and ... WHAM ... Congress is on your a$$ wanting a specific list of taxpayer names that they are out to get. Your name is on that list.

Congress gets the list, and begins drafting targeted legislation to go punish just a small number of individuals. Their "feeling" is that these people made more money than they should have, so Congress wants to take it away. My question is, who will be the next on the "feelings" list? Rush Limbaugh? Why not take away his fortune? After all, he's worse than an AIG employee, right?

The U.S. made an *investment* in AIG. They did not buy the company. As an investor you have certain rights-- such as seats on the board and directing policy. But you don't have the right to break past contracts.

United States citizens are protected from our Government by the Constitution. The Congress has no power to break a legally agreed to contract between two parties as long as it does not violate laws-- which in this case it doesn't. The idiots drafting this 90% tax are breaking their oath to uphold the Contitution of the United States of America.

Finally, would Warren Buffet invest his entire stake of money in a company and then demonize it in the media, sully its reputation, and probably make it even more difficult for it to recover and repay his investment? To see Congress throw this money recklessly and then attack the beneficiary is among the two most stupid things I have ever seen.

 

[MEP001]

If the people who should be receiving these bonuses are so hard up for money that they can't survive without it, let them apply for welfare. At least then the ones who need it can get support, the rest can sell their boats.

 

[soapy]

My thoughts are that if the AIG bonuses need to be given back because of the company being in the red shouldn't that same logic be applied to CONgress. If they operate each year without a balanced budget they should forfeit all of their pay also. If the budget is balanced they collect their pay and even a bonus. What say you?

 

[ted mcmeekin]

You may not like it but these employees had a contract, however dumb it may have been you simply cannot void it. By now you may know that Dodd and little Timy knew how this happened as they made it happen while they sat by silently and watched the CEO who came to help at zero pay get crucified. Dodd and little Timy are low lives that should be looking for work--Dodd and Queen Barney probably should be in jail

Ted

 

[Tom Thumb]

As Jeff said,
If you ask for Gov't money,You have to play by their rules.

Problem is :
They did not make any rules

This is the way I see it.

 

[vashick1]

The government is totally out of control. The only question is - What are we going to do about it?

 

[Sequoia]

M&A issues

I have significant experience with business mergers and acquisitions. My deals were in the millions of dollars; the gov't plays in the billions. More zeroes on their deals but the concepts are the same as with my deals.

The way to do this, correctly, was for the gov't to approach AIG about the bonuses before handing out any money-- making the money contingent on successful discussions about future bonuses.

They could have required AIG to approach each bonus-eligible employee and ask that the employee voluntarily surrender the right to the bonus. Something like: "without funding we may not exist which would vaporize your bonus, but sign here to surrender it and the reward is that we continue to exist and you get to keep your job and income."

The gov't didn't do this-- according to them, there was an emergency panic rush to shower money around lest bad things would occur. So, the gov't did not do the proper *due diligence* on a $180B deal, and now they whine about the results. Not to mention Dodd expressly putting the language in the bill to authorize the bonuses.

Again, it is not fair to punish and demonize the company and employees over the lack of the gov't doing proper due diligence and then "feeling" like some folks got overpaid. Yes, I am outraged at the showering of money; I am more outraged at Congress targeting individual citizens for retribution once the shower is over. Just wait to see where that leads if they get away with this one.

Finally, the bonuses represent only a fraction of 1% of the money *we* invested in AIG. Why isn't the focus on looking at the 99% of the money being used to see that it is being wisely invested to ensure success and a return on our investment? Why the focus on the .... politicially charged .... 1%?

 

[jfmoran]

The outrage over the AIG bonuses is bull-spit and a total smoke screen, the real outrage should be over the list below: All our government did was launder money thru AIG to these other institutions. This whole bailout scheme is a joke.



AIG Payouts
Below are the top 10 largest payouts, according to a report released Sunday by AIG.

Societe Generale: $4.1 billion
Deutsche Bank: $2.6 billion
Goldman Sachs: $2.5 billion
Merrill Lynch: $1.8 billion
Calyon: $1.1 billion
Barclays: $0.9 billion
UBS: $0.8 billion
DZ Bank: $0.7 billion
Wachovia: $0.7 billion
Rabobank: $0.5 billion

 

[Bubbles Galore]

To me it just shows the quick trigger finger of the political machine. They haphazardly react and then react to their ****-poor initial reaction. It's a vicious cycle.

*Sigh*

They hand AIG a blank check with no stipulations and then become irrate when they do whatever they want with it. I wish I could invest like that.

It just shows that the only thing the government is good at is spending OUR money. I would like to see some concessions from congress. There wasn't much talk last year when they all received their annual pay increases.

If they are going to get upset when a company rewards incompetence, they should look in their own backyard before they go head-hunting elsewhere.

 

[pitzerwm]

Just stand by, they are now talking about extending it to all businesses, not just the ones that took government money. Its just the start of the war on the classes. It will only get worse, mark my words. Remember Hitler was elected to office, he used the bad economy to get more and more power. It took 10 years for it to end.

 

[ted mcmeekin]

As you note, this is less than 1 % and totally driving Obama's and Congress's behavior. It was less than 2 weeks ago when Obama was rationalizing the 1 % pork earmarks in his stimulus and counciling everyone to focus on the 99%. So now he is on Leno ranting how stunned he was by these (less than 1 % ) bonuses. A big time hypocrit----hope we can survive. I feel better about 2012 everyday.

Ted

 

[Sequoia]

Mob rule

Bill is right-- it is spreading.

Just learned that Barney Frank is now targeting employee bonuses at Fannie Mae and Freddi Mac-- the entities who back most of the mortgages in the U.S. He has announced he is coming after them.

The folks within these organizations are fighting back-- arguing that what he will achieve is to drive out all of the best and brightest folks who can instead go work either in the European financial markets or take alternate jobs here in the U.S. without being targeted by the government.

The government is in the process of destroying and damaging the very companies that it just poured hundreds of billions of our dollars into. What sane or rational person would ever set out to tar and feather the company that they just poured the whole "nest egg" into?

Is this mob rule run amok? Is the focus and firestorm on the less-than-1% expenditure for bonuses designed to keep our eye off the ball regarding how the other 99% is being used?

 

[ted mcmeekin]

There is going to come a point when congress and the administration realize--boy did we f---up and want out but will not be able to figure out how. Be prepared for a blue ribbon business roundtable to tell these idiots what to do and watch them wash their hands and run.

Ted

 

[Jimmy Buffett]

As Jeff said,
If you ask for Gov't money,You have to play by their rules.

Problem is :
They did not make any rules

This is the way I see it.

Actually they made the rule that made what AIG did to get in so much trouble 100% legal. More regulation by those morons is NOT the answer.

 

[rph9168]

It kinda reminds me of the saying that when you are up to your ass in alligators you forget you were only trying to drain the swamp. By the time they get through this they will have screwed it up so badly no one will remember what they were originally wanted to do. These guys are real morons with very short memories of who caused this mess originally - themselves.

 

[pitzerwm]

Sounds like TV today is bringing out that Treasury knew about the bonuses and okayed them, and Dodd, bought off on them in advance too, now they are all running around screaming "Fire" to take the spotlight off of them. It is just a calculated plan on Obama's agenda to destroy capitalism and the Dems are following along like the piped piper. It will take 25 years to recover if we ever are able to. I hate to sound like Doug, with the Sky is falling, but I'd start preparing a Plan B.

 

[mac]

I like Soapys idea, but untill us peasants are at the gate with pitchforks and torches it probably won't happen.