AIG Paying Millions in Bonuses Despite Receiving Federal Bailout

[Amerigo Vespucci]

Source: The Washington Post

Despite receiving $170 billion in federal aid and recording a staggering loss for the last quarter, insurance giant American International Group is doling out tens of million of dollars in bonuses this week to senior employees.

While AIG agreed to pay the bonuses months before the government's rescue of the company began, the matter still is a source of anger for government officials. In a phone call on Wednesday, Treasury Secretary Timothy F. Geithner told AIG Chairman and chief executive Edward M. Liddy that the payments were unacceptable and needed to be renegotiated, according to an administration source.

The company has since agreed to change the terms of some of these payments. But in a letter to Geithner, Liddy wrote that the bonuses could not be cancelled altogether because the firm would risk a lawsuit for breaching employment contracts. Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees who are needed to turn the company around.

"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of the American taxpayers -- if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. treasury," Liddy wrote.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031401394.html?hpid=topnews

[w4rma]

1. Quit playing games with these con-artists and just nationalize them. (nt)

[Elidor]

2. "The best and brightest talent???" They're fucking crooks and incompetents!

Fire them all and tell them they can look for their fucking bonuses at the nearest unemployment office. Fucking fuckity-fucks!

[stillcool]

12. that's why they're the best..

and the brightest! Talented crooks require a lot of hush money.

[ChairmanAgnostic]

3. 10,000,000 unemployed. WHERE ELSE WOULD THEY GO?

I mean, they did so well at AIG, I am sure that their talents would be considered golden.

[depakid]

6. Federal prison

[ChairmanAgnostic]

21. If I could vote on a "best comment", it would be this.

[Solly Mack]

4. Oooh...so it's in our best interests to pay out those bonuses

LMAO


AIG is just looking out for us, the American people.

I feel so..so..so...covered....in bullshit.

[AndyA]

5. Heads up to AIG regarding your "best and brightest talent"

If these are the same people who have been in charge, they aren't worth a shit. FIRE THEM. They have run AIG into the ground, it has lost money, and is being supported by the American taxpayers now.

Go out and find a few capable people who have something other than their own best interests and bonuses in mind, and you might find things will turn around. If you keep the same "talent" in place, chances are you'll eventually fail as a company.

[babylonsister]

7. Treasury objects to AIG bonus payments

http://www.reuters.com/article/newsOne/idUSTRE52D1ZR20090314

Treasury objects to AIG bonus payments
Sat Mar 14, 2009 6:27pm EDT

AIG plans to disclose CDS counterparties: source
6:27pm EDT


WASHINGTON (Reuters) - Embattled insurer American International Group agreed to revamp its bonus structure on Saturday after Treasury Secretary Timothy Geithner objected to its plans to pay out substantial sums for 2008, Obama administration officials and the company's chairman said.

AIG, which has received three government bailouts totaling $180 billion, will sharply cut remaining salaries for 2009 for top executives of its AIG Financial Products unit and will work with Treasury to realign 2008 bonuses to reflect the company's restructuring and repayment goals, AIG Chairman Edward Liddy said in a letter to Geithner.

AIG Financial Products was the unit that made bad bets on toxic mortgages that led to the company's near collapse.

Liddy said the firm was legally obligated to make already-committed 2008 employee-retention payments, the value of which were set last year before problems arose at the Financial Products unit.

"Some of these payments are coming due on March 15, and, quite frankly, AIG's hands are tied," Liddy said, adding that he found the arrangements "distasteful."

But he said he would work with Geithner to resolve the issue.

An Obama administration official said it was unacceptable for Wall Street firms receiving government assistance to pay million-dollar bonuses, but concluded that the retention payments were legally binding.

The Treasury will continue to negotiate with AIG to bring these payments down and seek to recoup the funds through mechanism outside of these contracts.

(Reporting by Glenn Somerville; Writing by David Lawder; Editing by Philip Barbara)

[Amerigo Vespucci]

10. AIG's hands are NOT "tied"...

...it's just easier if we agree with their chairman and go "OK, you're right, write the checks."

How the hell do we balance daily stories about new "tent cities" popping up all over the country at the same time as ongoing multi-million dollar bonuses to failed companies at taxpayer expense?

"The Treasury will continue to negotiate with AIG to bring these payments down"...

...sorry. Not good enough.

[babylonsister]

11. I'm hoping this is just an opening salvo from Treasury myself. I agree,

that's one lame excuse from AIG.

[aviationpm]

46. Nobody cared about employment contracts for airline workers...

And I guarantee they made a lot less money. AIG should file for bankruptcy and renegotiate the contracts with all of these bonuses if they don't want to be sued... just like so many other companies had to do.

[wellst0nev0ter]

17. Uh Oh! Here Comes A Sternly Worded Letter!

Seriously, I just can't get angry at this because I'm just tired of it all. Fuck it, it's not like it's the first time they've held bonfires with my tax money anyways.

[Mari333]

8. muuuuu uuuutherfuckers!...........nt

[LiberalPersona]

9. Big surprise... not /nt

[Baby Snooks]

13. The crooks get richer....

The crooks get richer and that seems to be the bottom line of the "stimulus" of both the Bush and the Obama administration.

Quite a few who have dealt with AIG know how they conduct business and also know no attorney will take them on. I doubt Congress will either.

[CLANG]

14. Earth to Edward M. Liddy

GO FUCK YOURSELF!

[Downwinder]

15. Finally figured out (I'm a bit slow) why they can't bailout the mortgagees.

If the mortgages are paid off the Wall Street gamblers won't be able to collect on their derivatives and AIG won't need a treasury bailout.

[yurbud]

16. AIG should be attracting flies like a dead possum in the road

[nightrain]

18. LOL

"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of the American taxpayers -- if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. treasury," Liddy wrote.

LOL! Their best and brightest drove it right into the ground and made horrible decisions. I think those folks should be tossed out on their ear, and certainly not paid ANY bonus! Gees! Bonuses are for work well done, no? Or is that what they had in mind anyhow. Jerks!

[OwnedByFerrets]

19. Words cannot express the anger and disgust I feel for

these MOTHERFUCKERS:mad: :mad: :mad:

[mbperrin]

20. Taxpayers own 80% of this hulk. Treasury needs to get lawyers in court

to throw company into bankruptcy (should be easy to show), voiding all obligations to anyone except as court ordered.

If union manufacturing workers can lose the pensions they paid in over a lifetime, and if union air traffic controllers can be fired en masse, then these fuckers can be fired without paying them a dime!

Keeping them on is like hiring the arsonist to fight the fire he lit!

PFD! (Pretty Fucking Dumb!)

[Frank Booth]

22. If AIG and the rest aren't careful, Guillotine manufacturers may see a big uptick in orders soon.

[aquart]

23. I want them seized. Preferably by the neck.

[progressoid]

24. Not DESPITE of the bailout, but BECAUSE of the bailout.

[bertman]

25. So AIG's employment contracts with these clowns said that they would get bonuses

no matter how poorly the company did--even if they fucked up and the company tanked??!!

WTF, over.

[Kablooie]

26. THE BEST AND THE BRIGHTEST TALENT AT AIG ARE INCOMPETANT DIRT SLIMEBALLS!

Who the hell to they think they are!???
Someone has to make these jerks PAY!!!

If anyone would like to express their opinion,
I think this is his home address and phone number.

Edward Liddy
CEO AIG

110 Prospect St
Summit, NJ 07901-2472
[phone]

[Suji to Seoul]

27. Insurance giant AIG to pay $165 million in bonuses

Source: AP via Yahoo News

WASHINGTON – American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

Read more: http://news.yahoo.com/s/ap/20090315/ap_on_bi_ge/aig_bonuses

---

Are you fucking kidding me?

[cali]

28. What is there to say?

Unfuckingbelievable.

[NJCher]

29. this makes me sick

How dare they?

Cher

[w4rma]

30. That company should be bankrupt and gone, not giving out bonuses. (nt)

[Angleae]

31. But who would insure congressional pensions?

:sarcasm:

[and-justice-for-all]

32. Can we at least get a thank you from these fuckwads!! nt

[JTFrog]

33. I want a list. With home addresses.

And a rusty pitchfork.

:mad:

Seriously tho, who the fuck do they think they are? We need to protest outside their homes or stick them in jail where they belong.

[EFerrari]

34. Usually, someone buys me dinner first.

[Suji to Seoul]

35. And you get a cigarette afterwards. However, we didn't get screwed

We got raped!

And for all the rape survivors, I'm sorry. Economically, we got raped!

[Vinca]

36. Now this really pisses me off.

It was bad enough when they handed out bonuses for failure with THEIR money.

[Bhaisahab]

37. Blatant and brazen.

February 29, 2008:
A.I.G. Reports Record Quarterly Loss of $5.29 Billion
The American International Group posted its biggest quarterly loss ever on Thursday, missing Wall Street expectations, after being hurt by a write-down of securities exposed to bad mortgage investments.

The company, the world’s largest insurer by assets, posted a $5.29 billion loss, the largest since it was founded 89 years ago.
MORE: http://www.nytimes.com/2008/02/29/business/29insure.html

March 2, 2009
AIG Quarterly Loss Is $61.7 Billion: Biggest Loss In US Corporate History
CHARLOTTE, N.C. — American International Group Inc., once the world's largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.
MORE: http://www.huffingtonpost.com/2009/03/02/aig-quarterly-loss-is-617_n_171001.html

A year of record losses, and those responsible get what --- 100 mil bonuses! In-fuckin-credible! :wtf:

[Harmonika]

38. So this is how it works?

We keep handing them financial bailouts, and the bankers just pocket the money and create nothing for it?
Then we give them yet more money, they distribute the wealth among their friends, then come BACK
for another bailout?

Do we keep doing this, trusting that they will do what they promised to do with the money, until we
finally create a class of people so filthy rich and entitled that they honor no rules or laws?

Yes; by all means --- Let's keep giving out all that bailout money HOPING they finally do what's right...

[chimpymustgo]

44. Yes, this is how it works. They loot our 401K's - in return, we pay for their private jets.

[ovidsen]

39. Only in America....

Could a group of (mostly), middle aged (or older) fat, balding white guys who think they are entitled to just about anything get to be rewarded rith rides on corpoate private jets on the company dime to places like Hilton Head or Pebble Beach for rounds of golf and surf and turf dinners (with copious quantities of bubbly, martinis and girls) for running a company into the ground?

I wonder how big their annual bonuses would be and how extravagant the junkets described above would be if AIG hadn't been given a 152 BILLION dollar credit lifeline by the federal government because it was "too big to fail"?

[MannyGoldstein]

40. They've Earned This Money. Every Penny.

With awesome skill they have convinced the former and present Republican heads of the Treasury Department to fork over the cash. This is their due.

I'm so tired of the Middle Class whining - if you don't like the government spending your money, go back to the USSR.

On a serious note (yes, the above is :sarcasm:), check out the comments at http://community.nytimes.com/article/comments/2009/03/15/business/15AIG.html. Looks like people get it.

[Hugin]

45. I can hardly wait to see this same 'Pay-for-performance' merit pay system at work in Education!

:bounce:

[GoesTo11]

41. Close it down. Now.

Without government cash, they would have been out of business already. They would not have any ability to pay out bonuses. So they should have some respect for the government and the taxpayers who are bailing them out. They spit back in our faces. Close the damn company.

[dcindian]

42. bonuses are good and need to be in place in order to turn this sector around.

High bonuses reward good business men and discourage bad ones from ruining the whole system. I think they should triple the bonuses then AIG will be three times a good.

[Cass]

43. What a joke. The "best and brightest" drove AIG into ruin.

Why should people who screwed up on a such a colossal level even think they deserve a bonus? And, who do they think they are to expect taxpayers to fund them? These people are completely out of touch with reality.

The thing that really bothers me in this bail-out situation is it is impossible for any company to remain solvent when it has such outrageous overhead costs with hundreds of millions of dollars paid into bonuses and salaries for top tier management. The companies are doomed to failure from the outset with that kind of overhead.

[SlowDownFast]

47. $450 million in bonuses.

AIG plans bonuses to financial-products employees
Payments go to staff at unit that sent insurer to brink of collapse


By MarketWatch
Last update: 1:07 p.m. EDT March 15, 2009
WASHINGTON (MarketWatch) -- American International Group is set to pay $450 million of bonuses to employees of the unit that was largely responsible for the New York insurer's near collapse last fall.

The decision to pay bonuses elicited howls of protest in Washington, which has prevented the failure of AIG by providing the insurer with more than $173 billion in aid. The federal government now owns 80% of AIG

Larry Summers, one of President Barack Obama's top economic advisers, called the payments "outrageous," and a key House lawmaker, Barney Frank, D.-Mass., told Fox News that the government should examine whether the bonuses are "legally recoverable."
Another Democrat, Rep. Elijah Cummings, D.-Md., renewed his call for AIG Chief Executive Edward Liddy to resign.

Liddy, in a letter to Treasury Secretary Timothy Geithner dated Saturday, said AIG had committed to paying the bonuses to employees of the financial-products unit and that they were "binding obligations" the company cannot legally rescind. The first payments are due March 15.

"I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them," wrote Liddy, citing the recommendation from the insurer's legal counsel.
The payments to 400 employees of the financial-services unit -- some of whom no longer work at the insurer -- were promised last year before the federal government bailout. Bonuses range from as little as $1,000 to as much as $6.5 million.

more:
http://www.marketwatch.com/news/story/aig-pay-450-mln-bonuses/story.aspx?guid={D69E1883-8A00-4F59-9DED-E701E15D9A59}&siteid=yahoomy

How much more of this are we gonna take?

[eppur_se_muova]

48. AIG to cut future bonus payments

Source: BBC

Troubled US insurance giant AIG says it has agreed to demands from the Obama administration to restructure its bonus payments to staff.

Bonuses for top executives are to be sharply cut in 2009, AIG's Chairman Edward Liddy wrote in a letter to US Treasury Secretary Timothy Geithner.
***
Mr Liddy and six other executives have agreed to decline bonuses, the Associated Press news agency said.

AIG would do its best to cut bonuses by at least 30% in 2009, Mr Liddy wrote to Mr Geithner.


Read more: http://news.bbc.co.uk/2/hi/business/7944416.stm

[ChairmanAgnostic]

49. 30% less theft is still theft. Period

Today's robber barons all reside on Wall.

[jmowreader]

50. How about cut OUT the bonus payments

at least until the company pays back its bailout?

[bbinacan]

56. Unfortunately

AIG has a contractual and legal obligation to pay those bonuses.

[WorseBeforeBetter]

59. Why not just hand over the keys to the Treasury?

"Bonuses agreed to in 2008 would be paid because they are legally binding." Even if the company is to the point of near-collapse? I *ain't* buying any of this and say let the lawyers at each other. Then again, who would pay AIG's legal fees? Nationalize the whole damn company (none of this 79.9% crap) and boot all the "talent" who caused the collapse.

[dflprincess]

72. I wish my employer would agree to pay me a bonus

no matter how the company is doing or what my performance is.

[WorseBeforeBetter]

78. You and me both.

This whole thing makes me ill. Including Summers saying in the same breath that it's "outrageous but we can't do anything about it."

[gristy]

63. What bonuses? The 2008 bonuses? Future bonuses?

The thrust of this article and the outrage on this thread is tied to future bonus payments.

Am I to believe that AIG entered into contracts with its employees (including managers) that are not "employment at will" contracts?

[bbinacan]

68. I used to work for Morgan Stanley

and earned a small bonus based on my work in 2004. It's called executive compensation and I was an associate vice president. AVPs are a dime a dozen at investment firms, so I was far from being the private jet hopping sort. My bonus is 133 shares of MS stock with a grant price of $43/share. I vest in July and MS is at $25.43/share. No matter what happens to MS, I earned this and expect to get it.

[Evergreen Emerald]

71. wait a minute. That argument will (and has not) flown when it comes

to union workers. The argument is for them to renegotiate their contracts. The same could be saif for AIG.

It is a load of crap. I say--stop all payments to AIG. Let them fail.

[mbperrin]

80. So the UAW had no contracts with the automakers when the

government insisted they take layoffs, pay cuts, lose their medical and pensions as a condition for loans for their employers?

How'd that work?

[GinaMaria]

87. AIG has contractual and legal obligations here, not the taxpayers

We didn't have anything to do with these contracts. AIG can take out a loan, liquidate assets or get taken to court for not paying. None of this is our problem.

[lsewpershad]

57. Exactly.

Bonuses should be for excellent work performance. Can these clowns claim that they have done excellent work when their companies have failed???

[depakid]

60. What's "should" and what's actually "in" the contracts are likely 2 different matters

Not particularly a fan of the "new" economic team- but in some cases I recognize that they're over a barrel. Not to say this and other utter crap can't be dealt with. Just that it's not as simple as some of us would like it to be.

[barbtries]

51. what i don't get

is why aren't their bonuses tied to performance??? they don't deserve a fricking penny in bonuses, they deserve to lose their jobs.

[Igel]

79. Because "bonus" has a few different meanings.

In this case, the bonus pool is determined by contract, and was drawn up before Lehmann Brothers and the Macs had their problems. The problems may have been (marginally) predictable, but the contract is based upon actual numbers at the time, not projections.

Been there, done that. I was part of a board that had to pay a bonus we didn't want to pay; similarly, a year later I was part of a board that couldn't pay the bonus we *wanted* to pay. Life sucks.

Declare bankruptcy; get the contracts voided, and *all* the contracts are dinged. "We" didn't want that. Have a bail-out in order to protect some contracts, and you protect all the contracts.

Picking and choosing isn't an option, simply because we still like to think--don't we?--that the Obama administration is one involving rule of law and not rule by men.

[Vinca]

52. I'm still trying to find out why people who cause a business to fail

get bonuses. It's amazing you can apparently know nothing, fuck up badly and still get piles of cash.

[Jefferson23]

73. That is not a coincidence, but a plan. Risk was rewarded regardless

of what it produced. What I want to know is, has the Obama administration begun to reverse the Clinton-Rubin repeal of the Glass-Steagall Act ?

[jemma]

93. UR correct Jefferson23

But call the "plan" a "conspiracy" and people freak out and point fingers and scream "conspiracy theorist!."

People are more afraid of conspiracy theorists than they are of conspiracies.

[WorseBeforeBetter]

53. "do its best"?

OK, I am laughing out loud at that one. CUT OFF THE FUCKING SPIGOT until this pay/bonus robbery is straightened out. And BUST UP THE FUCKING COMPANY to smaller, more manageable units. Or better yet, nationalize the whole damn thing and boot EVERYONE -- start with new "talent."

[MikeNearMcChord]

54. How about RICO charges or hell, confiscate the assets!!!

But I guess if you are rich and White, you can do whatever the Fuck you can do!:mad: :mad: :grr: :grr: :nuke: :nuke:

[tomm2thumbs]

55. Shutting the gate after the horses have bolted

Maybe the administration should let them all go without bonuses and let'em sue. It'll boost the economy, giving lawyers some work, and in the meantime, those idiots can chew on some cardboard and sit around the house while their assets fade into dust. I'd be glad to put bailout money into fighting lawsuits from those crooks - at least we have a fighting chance of getting our money back.

[KeepItReal]

69. yeah! make the greedy bastages sue the govt for their bonuses!

I wanna see them justify their bonus in court.

[joeybee12]

58. And we're supposed to believe them...why? n/t

[gristy]

61. 30%????????????????

:wtf: How is this possible? This company is costing us untold billions. This company is bankrupt, and they are telling us now what we (REMEMBER WE OWN THIS DAMN PIECE OF SHIT COMPANY NOW) will be paying for bonuses in the future?

I can't tell you how angry this is making me.

[WorseBeforeBetter]

62. We own up to 79.9% of this POS company.

I'm really tired of phucking around with this. Go for 100% and break it up into smaller, more manageable units.

[pinniped]

64. Who the hell's gonna do anything about it if those AIG fuckers didn't agree?

I guess next time someone's gonna have to beg them to take more BS bailout money.

Please, take 50 more billion that we just printed up for you guys.

[lfl251455]

65. What were they going to pay the bonuses with

BEFORE they got the bailout money? Were they worried about being sued for breach of contract if they went broke?

[Rashel]

67. $170 billion in taxpayer money, $165 billion in bonuses. I guess that was their crisis.

Not enough money for bonuses.

[Imperialism Inc.]

70. 160 million for bonuses. Still outrageous but accuracy is important.

[Rashel]

75. Doh! Sorry!

[zalinda]

66. Why not tell them that they get the bonus payments

if the IRS gets the social security numbers of everyone who receives the bonus. I think it would be a fair trade.

zalinda

[moonbatmax]

74. And Then...

...can we tax them at 110%?

PLEEEEEEEZE???

[earcandle]

76. so let us cancel our insurances and default on our credit cards and declare our selves debt free!

why not? If the baron robbers can do this to us, why can't we do something back?

[closeupready]

77. Oh, no. Joe Biden helped the banks take care of that, almost as though they all knew what was comin

See Bankruptcy Reform Act of 2005.

[closeupready]

81. Wow, I love this thread. I thought I was alone in how I felt.

I see I was wrong. Good.

[Bake]

82. Guess what. Taxpayer money comes with strings attached.

If AIG doesn't like it, they don't have to take the money. Simple as that.

Bake

[Tiberius]

83. Ugh

We should've let them fail. I don't buy this idea of "systemic risk" at all. If one company can put the entire system at risk, maybe it's not a very good system is it?

Let them go bankrupt and we wouldn't be having this discussion.

[VermeerLives]

84. Maybe the AIG Employees should just walk out

I wonder what would happen if the AIG FP employees simply walk away from their desks on Monday night never to return....

Should anyone get bonuses on the job? What about our 401Ks? Do we really deserve that contribution from the company?

[GinaMaria]

88. taxpayers are not contractually or legally obligated to pay out

AIG's contracts.

[mbperrin]

90. PLEASE tell me they will walk away!

Maybe if enough rats and fleas leave, we won't have to burn the ship!

That would be GREAT NEWS if it happened!

[VermeerLives]

85. AIG Bonuses

fta: "We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses -- which are now being operated principally on behalf of the American taxpayers -- if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. treasury," Liddy wrote.

I have to agree with the above statement. Furthermore I wonder if anyone has thought through the consequences of taking away the bonuses, mainly that the Government won't get any tax revenue from them. If you get a bonus, you pay taxes, no matter no small or large the bonus.

[mbperrin]

86. Well, let's see. We can pay all of the bonuses and recoup 15% or

we can keep them and recoup 100%.

It's taxpayer money! Without it, there would be no AIG.

Look, the fall of the sovereign nation USSR didn't end the world. Neither would one company failure.

[GinaMaria]

89. They've paid big bonuses and have attracted and retained parasites.

No Taxpayer is obligated to pay AIG's contracted bonuses. AIG can take out a loan, liquidate assets or be taken to court. The same options each of us would have if we signed a contract to pay someone. What would you do as an individual here? Go to AIG and demand that they pay for something you contracted for? Ha! This isn't rocket science. We didn't sign the contracts, we don't have to pay them.

[SahaleArm]

91. You're hilarious spend a $1 to get 30 cents.

You must be some sort of financial genius; are you a corporate officer at AIG?

[VermeerLives]

92. No -- why do you ask??