The AIG bonuses furor: the class issues

[dcsmart]

According to the Wall Street Journal, AIG International is paying out $450 million in bonuses to executives at its London-based subsidiary AIG Financial Products, which was primarily responsible for the company's staggering $99.3 billion loss in 2008.

The bonuses are on top of $121.5 million in "incentive pay" for 2008 going to 6,400 of AIG's employees and another $600 million in "retention pay" going to another 4,000 of them, for a grand total of over $1 billion.

The New York Times reported that seven AIG executives would receive bonuses worth $3 million or more each, while the Washington Post related that $165 million was being divvied up between 400 employees—an average of $412,500 each, or roughly ten times the annual gross pay of an average worker.
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Treasury Secretary Timothy Geithner is reported to have called the government-installed chairman of AIG, Edward Liddy, telling him that the bonuses were "unacceptable" and demanding that they at least be pared down. Given that in its first $85 billion bailout of the company last September the government took over an 80 percent share of the firm, one might have thought that Geithner's request would have carried some weight.


Liddy, a former board member of Goldman Sachs—the investment house believed to have received a large portion of the bailout money after it was "laundered" through AIG's insurance contracts—fired back an extraordinary letter telling the government to get lost.

"Quite frankly, AIG's hands are tied," he wrote, claiming that the bonuses were "binding obligations"—part of the executives' employment contracts—and interfering with them could provoke lawsuits. Moreover, he argued that they were fully warranted, despite the massive losses for which those receiving them were responsible. Without doling out a billion in additional compensation, he claimed, AIG would be at risk of losing "the best and the brightest to lead and staff the AIG businesses." Employees would leave if "their compensation is subject to continued and arbitrary adjustment by the US Treasury," he said.

"The best and the brightest?" The executives in AIG's financial division ran an unregulated credit-default swap operation that was just as much a scam as Bernie Madoff's fund, and far more destructive.

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FULL ARTICLE
http://www.wsws.org/articles/2009/mar2009/pers-m16.shtml

[liberal N proud]

1. Hands are tied my ass! GM, Ford and Chrysler are all breaking

all breaking contracts w/ unions.

Why is it OK for companies to break contract with unions when these fuckers are BOUND?

:nuke:

[dcsmart]

4. Exactly, the counter argument

unions take concessions on their contracts, executives can also. but it is all about class, the working class losing out to the capitalist executive class....

[Larkspur]

2. Why the AIG bonuses are politically explosive for Obama and the Dems

from TPM

SNIP

What's really driving this forward -- and what makes it such a dangerous moment for the White House -- is the jarring image of the administration's impotence.

Secretary Geithner found out about the bonuses. He told AIG CEO Edward Liddy it wouldn't fly. And Liddy, in a curiously imperial letter, tells Geithner that much as he is pained by the situation -- to blow it out his ass. Which he apparently proceeded to do.

SNIP

Few exchanges have so captured the disconnect that makes this situation so politically explosive. We're collectively taking our country's future in our hands, spending vast sums of money to keep these companies from suffering the consequences of their own folly and (in many cases) criminality. And in return we're receiving cavalier dictates about pay-outs and bonuses from executives who by any reasonable measure work for us -- dictates we promptly accede to. There's a beggars can't be choosers problem there. And the disconnect is so mighty that it fuels the impression that the whole enterprise is not what it seems, not what we've been told, that in addition to picking up the tab we're being played for fools.

SNIP

Now we know why FDR nationalized the banks. It was so he could fire the sorry ass CEO's who broke them. Geithner is a Wall Street whore and his actions/lack of actions speak volumes about who he really serves -- Wall Street. Geithner should resign if AIG pays out these bonuses.

[Bluenorthwest]

3. Theives are the best and the brightest

only teachers need to show sucess to prove 'merit'. The crooks are 'talent' that must be retained, even when they fail. The company is stealing from the taxpayers to reward failure. And the administration shrugs it off, while demaning investigations and testing of teachers to distract from the lack of accountability for the theives.

[Democrats_win]

6. Yep. The 'merit' thing shows that hypocrisy is alive and well.

Clearly the AIG people don't merit any type of bonus let alone their base pay.

It's not just teachers stuck in the right wing's 'merit' nonsense. For 30 years conservatives working for their bosses on Fraud Street have tried to push this idea to keep employees in fear and corporate profits high.

Most employees are familiar with the consequences of this: the annual performance review. Yet here we have these AIG people who are part of the system that demanded that employees be subjected to a 'merit' system, benefiting off of a system that pays them just for being there. I can recall how the reich wing talks about union employees. Now we've come full circle: the banksters are the ones who are the dead weight in this country.

edit: spelling

[northernlights]

5. "best and brightest" my ass

the best and brightest recognized what was going on and either 1. spoke up and were fired, or
2. packed their stuff and left in disgust

What remains are the family and friends of the powers that be, milking off the scams. Effing fucking thieves.

As far as contracts go, what the fuck do you think the fucking back door draft was? What the fuck do you think "cramdowns" are? The the fuck do you think changing pension and retirement healthcare benefits after the fact is?

Fucking liars. I'm sure Mr. Geithner is outrage. Just like Mr. Summers. I mean, Larry just sounded sooooo sincere talking to George and Bob yesterday. my. fucking. ass.