NYT publishes mind-numbing rationalization for AIG bonuses; readers rebel

[BeyondGeography]

The Case for Paying Out Bonuses at A.I.G.

Do we really have to foot the bill for those bonuses at the American International Group?

It sure does sting. A staggering $165 million — for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of A.I.G.

It doesn’t seem fair.

So here is a sobering thought: Maybe we have to swallow hard and pay up, partly for our own good. I can hear the howls already, so let me explain.

...If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right.

As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts.

...Let them leave, you say. Where would they go, given the troubles in the financial industry? But the fact is, the real moneymakers in finance always have a place to go. You can bet that someone would scoop up the talent from A.I.G. and, quite possibly, put it to work — against taxpayers’ interests.

“The word on the street is that A.I.G. employees are being heavily recruited,” Ms. Meyer says.


Etc., etc.

http://www.nytimes.com/2009/03/17/business/17sorkin.html?_r=1&hp

Of course, readers are having none of it. Of the more than 300 (and counting) comments thus far, virtually none are supportive.

Which is putting it mildly.

A sampling:

This argument would make more sense if the government wasn't forcing automakers to abrogate their contracts with their workers and pensioners. Would the columnist have us believe that those contracts that will be modified or cast away were any less legally binding than those at AIG? Balderdash...it's rewarding poor performance at the expense of the taxpayer.

You have disgraced yourself. What have you said that hasn't been said? If anyone wants to hire these guys who ruined the world economy and collapsed their own firms, they are welcome to them. Yeah, they're real rainmakers. And do you think new people can't be hired to unwind the transactions with $165 million dollars?

This column is so unconvincing as to be laughable. Two miscreants create a contract stipulating large sums to be paid to whoever tries to blow up a bridge. The government comes and in stops them from blowing up the bridge, but then because of the sanctity of contracts has to pay the miscreants for trying? Give me a break. If something isn't done quickly this issue will never go away, it will probably outshine the stimulus package as THE legacy of Obama's first 100 days. And similar travesties will surface throughout his administration.

Wow, I guess you can make an argument for just about any self-serving interest there is, but what a bunch of nonsense!

So, the main reason aside from breach of contract concerns is these people "trading against" AIG's books once they leave the company? Is there something stopping them from using that very same bonus money to do the same thing? Is that not insider trading, if they are using their knowledge from being "inside" of AIG?

So we need to worry about future crimes to the extent that we let present ones go unpunished?

And about the breach of contract thing, what kind of contract pays out on a complete sham of a failure? Massive losses over the last 5 quarters and you get a bonus-- only in New York!

Yes, you make your point. BUT something is fundamentally wrong with a company that signs contracts guaranteeing bonuses regardless of profit or loss. And, why should anyone trust any solution these super smart folks come up with?

Etc., etc.

http://community.nytimes.com/article/comments/2009/03/17/business/17sorkin.html

[Vinnie From Indy]

1. Times like these really do unmask the idiots among us

The bonuses are unjustifiable and Americans know it.

[Xipe Totec]

2. Idiot is the kindest thing you can say about the author

Sell out would be my characterization.

[Beacool]

3. The government was fully aware of these bonuses.

AIG put all their cards on the table last fall. They not only knew about these bonuses, but it was their own attorneys who told AIG that they had no choice but to pay them.

So, politicians acting outraged about it as if they didn't know what was going on is disingenuous. It's the same old thing: they are covering their asses to protect themselves against people's anger.

Meantime, AIG had to add extra security to their buildings because their employees are getting death threats and an asshole senator even suggested that they should go the Japanese way and commit suicide.

What's next, torches and pitchfork?

:crazy:

[ProSense]

7. No they didn't.

They just released information on the $165 billion.

AIG executives are liars and they previously sent their spokesman to Daily Kos tell more lies.

[Beacool]

9. I wouldn't take anything at KOS too seriously.

Read this:

"Attorneys working for the Fed had been examining the matter for months and determined that the retention payments couldn't be touched because AIG would face costly lawsuits and be subject to penalties from states and foreign governments. Administration officials said over the weekend that they agreed with that assessment.

AIG disclosed its retention-payment program more than a year ago, and the amount of the bonuses -- more than $400 million for Financial Products alone -- had been widely reported. But as the payments were coming due in recent days, the White House began to express its indignation.

------------------

The payment plan had been no secret.

Beginning in the first quarter of 2008, AIG disclosed the plan to offer retention awards at Financial Products. The unit had already begun to hemorrhage money, a problem that would later grow exponentially. The unit's executives, fearing they might lose valuable employees in the tumultuous months to come, successfully negotiated more than $400 million for their workers, to be paid this month and again next year.

At the Federal Reserve Bank of New York, which has directly overseen AIG since its federal takeover in September, officials have studied the possibility of rescinding or delaying the bonuses. They even brought in outside lawyers for advice. The conclusion: If the bonuses weren't paid, the AIG staffers would be able to sue the company and probably would win, not just what they were owed but also punitive damages that would make the ultimate cost perhaps two to three times as high as the bonuses themselves."

http://www.washingtonpost.com/wp-dyn/content/article/20...

[ProSense]

10. Lies by the companies spokesman is not a joke.

It doesn't matter what they claimed they disclosed.

During the negotiations late last year, they mentioned bonuses and agreed on what was going to be distributed. This is BS.

In fact, Senator Snowe is speaking at a Finance Committee hearing on C-Span and she pointed out the bonus legislation that was stripped from the recently passed package was to prevent this very thing, and should have been signed into law.

[Beacool]

11. It is not a lie.

I don't know what went on in other firms, but I do know what went on at AIG since the takeover. The Fed were fully aware of these bonuses and it was THEIR attorneys who told Liddy that they had no choice but to pay the bonuses. Furthermore, Liddy was not elected by the Board of Directors, he was appointed by the government.

It was only a small division of AIG who caused the problems that almost took down the entire company. Sullivan and the top people who knew what the London office was doing are the ones responsible for this mess. Not the vast majority of AIG employees who are just doing their jobs and trying to make a living like the rest of the country.

[ProSense]

12. They neogtiated based on the $121 million, not the additional $165 million.

This is BS. People are talking about AIG as if they are operating in business as usual mode. They are on the verge of bankruptcy. They can withhold the bonuses. They can comply with all the government's request. These excuses about what they are obligated to do are BS, they are 80% owned by the government.

[Beacool]

13. Well, then talk to the government attorneys.

They are the ones who gave the go ahead to pay these bonuses.

:shrug:

[girl gone mad]

19. torches and pitchforks?

we can only hope.

[ellacott]

4. the author was on the Today show this morning

He tried to defend his article. He got a lot of push back from Meridith.

[blueworld]

5. This kid is total fool

I saw this idiot on "Morning Joe" - it figures. His mother is probably wearing a bag over her head as we speak.

AIG has never lost any employees to their competition before? Maybe we'd all be better off if some of these jerks WERE off screwing up other companies instead of all huddled in one behemoth!

The criminals who created, sold & maintained these derivative horrors are the only ones who can decode them now? Then AIG should have dragged them into court under subpoena, and not been blackmailed into retention bonuses. They're lying & we all know it.

When the rest of us lost our jobs to Bangalore, we had to train our replacements first - let these buffoons pass on their decoder rings. While the rest of us are accepting pay cuts, salary cuts, hour cuts, benefit cuts etc. just to keep a bloody job, let these fat, crooked, inept criminals forfeit their freakin' bonuses & VOLUNTEER to stay fix the mess they created - for their obscene salaries alone!

I swear this has made me angrier than almost anything else I've ever seen in corporate America & I'm retirement age (now a joke rather than a descriptive term).

[madmom]

6. Auto-workers contracts...are they just as binding? Where they not able to renegotiate them? This

is grasping at straws, trying to make it seem reasonable to do this, IT"S NOT!

[Egnever]

15. renegotiating is different

that doesn't take away benefits already earned it changes benefits going forward. AIG is doing the same thing. But its way more fun to just be pissed off.

[madmom]

23. Renegotiating does take away benefits already earned! I hate to

disagree here but I've been in a family of auto workers for a LONG time and they have lost plenty. Health care, vacation days, wages, not to mention pensions for retirees. They gave up raises to get these things and still are loosing them. Then when it's all said and done the Xe's will get bonuses for getting it done.If workers don't loose anything why do the companies want to renegotiate?

[depakid]

8. Just when The Washington Post had taken a commanding lead in the race to the bottom

The NY Times rallies.

[ShortnFiery]

17. Yes there's nothing liberal any more about either the NYT or the WP. Centrist at best.

:thumbsdown:

[depakid]

18. I'd just as soon honesty

and fair editing.

[Blue_Tires]

14. k+r

[ShortnFiery]

16. Pseudo-journalistic whores working directly for the power elite.

Fuck them! :grr: :thumbsdown:

[nichomachus]

20. Typical straw man

The government is not "abrogating contracts right and left."

All we want to do is readjust ridiculous compensation packages for failed employees of a failed company that had to be bailed out with taxpayer money.

If other corporations keep their noses clean, conduct business aboveboard, honestly, and competently, they have nothing to worry about.

[nichomachus]

21. The Times has stopped taking comments on this story

Looks like they like reader feedback -- but not too much.

[formercia]

22. Why can't they collect unemployment benefits like the rest of us serfs?

Why are these people so special? Do we have a new God class on this Earth?

[Number23]

24. Hell of a read! But this is the Snip of the Century:

"Here is the second, perhaps more sobering thought: A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it." :crazy:

"...So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company." :crazy: :crazy:

Oh. My. God. That man absolutely MUST be on the AIG payroll in some way. This whole article is COMPLETELY insane.