Has it yet been explained why retention bonuses were pain to AIG employees who were not retained?

[BuyingThyme]

If so, what was the explanation given?

[EFerrari]

1. I haven't heard it. They're replaying Liddy's Folly on CSPAN1

again right now.

[BuyingThyme]

3. Thanks. Maybe I'll look again. I lost interest last time.

[EFerrari]

5. It's more interesting this time around because some of the code

has been broken. Also some funny moments like, "Mr. Liddy, is that humdreds of millions or billions?" . .

[lamp_shade]

2. "Hush money" has been suggested.

[BuyingThyme]

4. Yes, that's certainly a possibility, isn't it.

[stillcool]

6. When a company is closing..

they retain workers to close down their section, or whatever. Since they know they will be out of work, they are offered a bonus to stay on. The problem isn't the bonus, it's the astronomical figure of those bonuses. It's like running the corporation into the ground all over again..which seems like a pretty popular way of making a good buck.

[originalpckelly]

9. Why not make the bonuses dependent upon actual retention instead of just handing out money?

[stillcool]

15. The only time..prior to this..

that I have heard the term 'retention bonus' was when Circuit City..or one of those electronic stores was going out of business. Stores here were shutting down around Christmas time, and employees were offered 'retention bonuses' to stay on and close down the store. The stores closed and not only did the workers not get their 'retention bonus' they didn't get their pay check either. It made the news in a big way, which is the only reason I remember the term. But what do I know? AIG etal., have used and abused bonuses as a regular part of compensation for a long time.

[annabanana]

19. That's what I took away from the hearings with Libby last week.

(It seemed as though some of the commissioners didn't get that)

[originalpckelly]

7. That's the right question to ask.

Either, it's incompetence on the part of the contract creators for not putting a clause making the retention bonus dependent somehow on the actual retention of an employee, or it was done on purpose. And if it was done on purpose, why? Why would they be paying these guys off? It couldn't have anything to do with the fact that where there's losses there's the potential for criminal fraud?

If you issue insurance to someone pledging to pay them when a certain conditions are met, those assertions turn out to be untrue, and the full payment promised is not given when the conditions are met, then it is plain fraud.

[dem629]

8. Probably the same bullshit excuse given to us by politicians from BOTH parties.

When the initial bonuses were revealed.

This is a fucking scam and we're being had by both parties, the elite rich and powerful.

[originalpckelly]

10. I know, both side received tons of money from AIG last year.

http://www.opensecrets.org/orgs/toprecips.php?id=D000000123

Even Kerry received money in 2004:
http://www.opensecrets.org/orgs/toprecips.php?id=D000000123&type=P&sort=A&cycle=2004

They want us to think they're still working for us, but they take all this money? I don't think so, it's clearly a bunch of bullshit.

[TahitiNut]

13. Was that money FROM AIG or FROM the employees of AIG???

The distinction is often ignored. :shrug: There's a difference between an employee making a campaign contribution and the company doing so. The latter is, in most cases, illegal.

[originalpckelly]

16. It's employees, but high up ones. They're executives mostly...

most normal people can't give thousands of dollars to a politician.

How easily we forget that a company is just a group of people, even if you forbid a company from donating money, the people in the company will donate instead.

In 1990 both parties received together $157,000 in donations from AIG's employees.
1992: $216,000
1994: $260,000
1996: $298,000
1998: $387,000
2000: $480,000
2002: $563,000
2004: $581,000
2006: $505,000
2008: $597,000

Bold years are Presidential elections.

[TahitiNut]

11. A retention bonus is like a 'balloon payment' in compensation.

It's to ensure that the employee is 'retained' at least to the point that the bonus is PAID, and not beyond. (It's incredible how MISinformed folks are regarding this fiasco.)

If the employee signs a contract in 2007 that says that some percentage of their total 2008 compensation will be paid in December if and only if they're still employed, THAT'S a "retention bonus." This is relatively common on Wall Street. This is WHY there are "Christmas" bonuses. These firms have gotten accustomed to doing business in a cannibalistic way. The amount of in-breeding is enormous ... people going from one firm to another and taking "business" with them. Thus, the compensation habits are back-end loaded ... garnering SOME predictability that account managers and rainmakers will be around for some predictable amount of time.

[KittyWampus]

12. Liddy actually explained the "retention" referred to tasks at hand an not a specific date.

[TankLV]

14. It's because they are just CALLING it "retention" bonuses...the word has no meaning or basis...

They are just "bonuses" - without ANY connection to a purpose other than how much the recipient could game out of the system. Period.

That these CRIMINALS have taken to calling them "retention" bonuses is like ALL the various excuses proffered by bush* on why we attacked and invaded Iraq that changed every time their current excuse proved FALSE...

These assholes KNEW their companies were failing and heading for bankruptcy, so they STOLE all that wasn't fastened to the building they worked in. But they had to come up with an explaination as to why these assholes were ALLOWED to steal coroporate funds with impunity. It's part of their in-grained believe that they are ENTITLED to such wealth.

[FLyellowdog]

17. What would have happened if the bonuses weren't given

and those executives had left AIG last year before their "projects, units, whatever" were completed? :shrug:

[leftofthedial]

18. those on Wall Street are criminals and liars.