AIG and those bonuses

[Will B]

Let me sum this up...

1. AIG loses lots of money
2. AIG gets huge bail out sum
3. AIG pays bonuses
4. The Gov't is shocked. SHOCKED and OUTRAGED, I tell you
5. Gov't puts AIG in the hot seat and grills their CEO
6. Gov't demands that money is returned, or they will tax the snot out of it
7. AIG CEO won't give up names
8. Discovery of a legal loophole discovered.

Did I say that the Govt was shocked and outraged.

9. Sen. Chris Dodd confesses "to adding language to a spending cap in the stimulus bill last month that specifically excluded executive bonuses included in contracts signed before the bill's passage. Said said the argument put forward by Treasury was that a "flood of lawsuits" would come forward if the change was not made."
10. Dodd fingers Geithner as being the one who requested the change.
11. Democratic infighting begins with reps pointing figers at each other

So, now we have a bunch of politicians mad at AIG for doing what they were entitled to do by provisions placed in the bill by the Obama administration.
Two questions. Are they feigning anger to cover their asses because they passed a bill without knowing what was really in it, or are they feigning anger to deflect attention away from an adminstration that seems to be in a little more over their head everyday?

You just can't make this stuff up!

I'm not making any morality statements here regarding whether or not the execs should have taken the money. That should be a whole other thread.

Oh...and tonight on Leno, Obama made a Special Olympic joke.
I'm guessing his beloved teleprompters were not in use...

 

[Beach Runner]

I'm sorry, but as the wife of someone whose husband's compensation has been highly dependent upon bonuses, the 90% tax on bonuses is pure socialism. A bonus is an incentive to perform (a.k.a. make one's employer more profitable). If the government takes 90% of it, what is the incentive? At one point today, they were talking about applying this tax to all major companies. The last I checked, it had been decided that it would only apply to bonuses of executives of companies receiving stimulus money. That is not so outrageous, but still it doesn't make sense to me. If a corporation needs bailout money, none its executives deserve a bonus (see definition of bonus above).

 

[30ashopper]

I'm sorry, but as the wife of someone whose husband's compensation has been highly dependent upon bonuses, the 90% tax on bonuses is pure socialism. A bonus is an incentive to perform (a.k.a. make one's employer more profitable). If the government takes 90% of it, what is the incentive? At one point today, they were talking about applying this tax to all major companies. The last I checked, it had been decided that it would only apply to bonuses of executives of companies receiving stimulus money. That is not so outrageous, but still it doesn't make sense to me. If a corporation needs bailout money, none its executives deserve a bonus (see definition of bonus above).

Great Depressions for Dummies, Version 2.0

Chapter six: How to scare the bajeezus out of big business so they crawl into a hole and never come out

Check!

Chapter seven...

 

[Lynnie]

90% tax - remind you of anyone in particular? Bonus is always taxed at a higher rate than regular compensation, but this is no way to solve this issue.

Federal Reserve knew of the bonuses. The CEO that our government placed there for $1/yr. knew of the bonuses......I smell a rat! If I had been Liddy, I would have questioned Congress on exactly what they knew as well as which members haven't paid their taxes. This doesn't make it right, but the anger? Is it feigned? Good question, SC.

If we let free markets take over and keep the government out of this, there are carriers who will pick up the policies/assets of AIG.

 

[Miss Kitty]

Did I read somehwere that Liddy had sent the list of bonus receivers to Cuomo?

Man, when Liddy read some of those threats written to the bonus receivers to the committee, I did this...:shock:. The American people are so po'ed.

 

[Smiling JOe]

Loved listening to Obama on Jay Leno last night, say that the bonuses were written into the contracts last year, as though he had nothing to do with urging Congress to act quickly passing the mega-bill which essentially approved paying the bonuses.

Here is an idea which I haven't heard: Instead of taxing the people who were smart enough to write themselves a bonus (by the way, didn't Congress recently give themselves another pay increase -- performance based, I'm sure) an outrageous amount of 90%, how about we tax the baturds in both houses of Congress, along with the President, since they were dumb enough to pass the law approving the funds going to the people with legitimate, even if unjustified, contracts?

 

[Bob]

http://www.nytimes.com/2009/03/20/nyregion/20siege.html?_r=1&hpThe A.I.G. executive who was nicknamed ?Jackpot Jimmy? by a New York tabloid walked up the driveway toward his bay-windowed house in Fairfield, Conn., on Thursday afternoon. "How do I feel?? said the executive, James Haas, repeating the question he had just been asked. ?I feel horrible. This has been a complete invasion of privacy."


Mr. Haas walked on, his pink shirt a burst of color on a slate-gray afternoon. The words came haltingly. "You have to understand,? he said, ?there are kids involved, there have been death threats. ..." His voice trailed off. It looked as if he was fighting back tears.

"I didn?t have anything to do with those credit problems,? said Mr. Haas, 47. ?I told Mr. Liddy? ? Edward M. Liddy, the chief executive of A.I.G., the insurance giant ? ?I would rescind my retention contract.?

He ended the conversation with a request: ?Leave my neighbors alone.?

 

[Beach Runner]

I have tenure. That's a contract. But in case of financial exigency, a tenured professor can be fired. I would think that a contract for a bonus would carry less weight than tenure. Actually we signed our contracts with an increase built in. That will be rescinded, according to what we've heard in the past week. So why can't AIG rescind the bonuses for their executives? That's a crock.

 

[Smiling JOe]

AIG effed up when they fired former CEO, Hank Greenberg, who didn't allow any employee in AIG, himself included, to have a contract.

 

[GoodWitch58]

has anyone else heard this (I will see if I can find it to post)...on NPR Wednesday afternoon, a lawyer was discussing the AIG bonus and said that they were not performance bonuses; but, rather, they were rentention bonuses, paid to keep people from leaving the company during a "down" time.

I have not heard this anywhere else, although I have heard them referred to as "rentention bonus". It may be a small point at this stage of the game, but the outrage members of Congress are displaying about "bonuses for poor performance" seems a bit misplaced, if, in fact, AIG was paying these people to stay with a sinking ship with the hope that they would be the ones to right the ship eventually.....that is a bit different from paying them "for a job well done"

the entire fiasco is disturbing.