(03-16-2009 09:21 PM)gsloth Wrote:  If the bonuses are being paid to those on the trading side of the firm, then my gut tells me yes. Those guys did a horrible job with risk management and other elements of running a sane business. If it's on the insurance side of things, then I'm not sure. The money there is technically protected by reserves, and there shouldn't be that much hanky-panky on that side of things. But I've got to wonder why they were taking the risks that they were taking and took the losses that they did, unless they really had a larger unregulated side of the business than is obvious to an outsider. I am curious, too.

(03-16-2009 10:43 PM)WMD Owl Wrote:  

(03-16-2009 09:21 PM)gsloth Wrote:  If the bonuses are being paid to those on the trading side of the firm, then my gut tells me yes. Those guys did a horrible job with risk management and other elements of running a sane business. If it's on the insurance side of things, then I'm not sure. The money there is technically protected by reserves, and there shouldn't be that much hanky-panky on that side of things. But I've got to wonder why they were taking the risks that they were taking and took the losses that they did, unless they really had a larger unregulated side of the business than is obvious to an outsider. I am curious, too.

AIG is turning into another ENRON.

ENRON had legit, profitable elements as well as the Scams. Put AIG into receivership or let the US Government finally buy them out (they already own 75%).. then they can do an accounting and "follow the money"...

Some people need to go to the Federal Pen over this.

Who knows, maybe the "bonus payments" are really an advance to cover the retainer to hire a White Collar Criminal Attorney? Or Hush Money?

Quote:- The top recipient received more than $6.4 million;
- The top seven bonus recipients received more than $4 million each;
- The top ten bonus recipients received a combined $42 million;
- 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
- 73 individuals received bonuses of $1 million or more; and
- Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million

Quote:We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.

Quote:In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

Quote:Grassley: That AIG Suicide Thing? Didn't Really Mean It.

It took only one day for Sen. Chuck Grassley (D-Iowa) to back away from comments he made yesterday saying AIG executives should "resign or go commit suicide."

“What I’m expressing here obviously is not that I want people to commit suicide. That’s not my notion,” Grassley said today. “But I do feel very strongly that we have not had statements of apology, statements of remorse, statements of contrition on the part of chief executives of manufacturing companies or banks or financial services or insurance companies that are asking for bailouts.”

So Grassley still wants an apology from AIG for nearly bringing down the global financial system and awarding $165 million in bonuses, some of which went to executives in its Financial Products division that nearly did the deed.

But he's charitably backed off the harakari.

(03-17-2009 01:34 PM)erice Wrote:  The details continue to trickle out...

Here is a note from Andrew Cuomo summarizing what they've found regarding the bonuses via the subpoena that NY issued to AIG yesterday. Some highlights:

Quote:- The top recipient received more than $6.4 million;
- The top seven bonus recipients received more than $4 million each;
- The top ten bonus recipients received a combined $42 million;
- 22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
- 73 individuals received bonuses of $1 million or more; and
- Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million

Cuomo's closing is really interesting:

Quote:We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.

ETA: Seems Congress is getting clever with its attempts to get this money back (full article here):

Quote:In the House, Reps. Steve Israel, D-N.Y., and Tim Ryan, D-Ohio, introduced a bill that would that would tax at 100 percent bonuses above $100,000 paid by companies that have received federal bailout money.

"We will use any means necessary," said Ryan. "It boggles my mind how these executives can be so unaware of what the American people are going through."

(03-17-2009 04:40 PM)Rick Gerlach Wrote:  Regarding gsloth's comment. That may be fine if your bonus is tied to a definitive goal or target (sales, etc). As noted above some firms use it differently. You have two staff members, one working above and beyond and the other on cruise control, . . . .if the difference is the bonus one might get, I don't see that withholding it is fair. I also don't see pulling a senior or high mid-level employees bonus if the end result is that they are effectively working for less per hour than people that work for them, doing less complicated work.

(03-17-2009 07:32 PM)gsloth Wrote:  

(03-17-2009 04:40 PM)Rick Gerlach Wrote:  Regarding gsloth's comment. That may be fine if your bonus is tied to a definitive goal or target (sales, etc). As noted above some firms use it differently. You have two staff members, one working above and beyond and the other on cruise control, . . . .if the difference is the bonus one might get, I don't see that withholding it is fair. I also don't see pulling a senior or high mid-level employees bonus if the end result is that they are effectively working for less per hour than people that work for them, doing less complicated work.

I will say this, and maybe it was just the nature of being a software company - but everyone is on the front lines, facing the customer. (OK, almost everyone.) Even the development managers had a role in selling our software, listening to customers needs and working with the internal product management teams, architects, sales guys, and us consultants. It was a team job. And I'm not sure it's that much different in a financial company, though the terms may be different.

And honestly, unlike your firm, our guys were all salaried. (Well, I'm not sure about our off-shore development teams, but that's another sensitive topic of conversation entirely.) So you can guarantee that the managers were making more in salary than the rest of us in salary (and I knew enough, as I was on the cusp of the management tier as things went south, and continued to help with appraisals and other stuff as things tightened up). And actually, their bonuses were even larger and tied even more tightly not just with company results but their own internal growth targets (or other metrics).

I figured that's what the bonuses used to be. But when you game it with a guarantee of nothing less than last year, that is all that it is - a game. You've eliminated much of the risk and perceived incentive to do better, which I thought was the capitalistic way. After all, if it's going to crater and no amount of effort on your part is going to get you back to your targets, what's the incentive to work harder to get out from under things? I have actually witnessed this happen at multiple companies (as a contractor). I guess that's what sad about this.

Yes, at my company back then, morale sucked, from the lost bonuses, tumbling stock price, and shrinking workforce. But we survived (grumbling along the way) in part because what we were left with were the best of the best (not trying to be immodest, but that's often what happens) and because we were actually grateful to still have a job.

I don't know. I cannot muster the sympathy for anyone in this case, even those who got a $1,000 bonus. Because I've seen folks play by the rules and figure out a way to live with lost performance bonuses that they were kind of counting on, not game the system so that folks can continue to rake in whatever they thought they were worth. Just sick.

(03-22-2009 01:35 PM)OptimisticOwl Wrote:  AIG has been the top story on all the news channels all week, but nobody here has anything to say. I wonder why?

I also wonder if all this uproar would have happened if the payments had been called "deferred compensation" instead of bonuses. I think this designation is closer to the true nature of the payments. Nowhere have I seen anything that indicated they were performance bonuses, but most of the indignation is based on them them being paid for doing a bad job.

Now we have the House passing a punitive taxation bill aimed specifically at these people. i will let others argue about whether or not this is Constitutional. I will just say it is wrong. It also appears that even though an attempt was made to write it narrowly, it is still broad enough to catch some people who aren't the targets. (Hm - targets, is that the word we want?)

I will say this - I have been taxed, audited, investigated, eminent-domained, targeted, and drafted by various agencies of the US, but this action by the house makes me afraid of my government for the first time.
When a small group is targeted by the Congress for punishment, for not being moral or ethical in the eyes of the lawmakers, who is next?

In any case, they were going to get 35% (39.6%?) of the bonuses anyway - so this precedent is being set over about 90mm?

Today, I heard a couple of lawmakers advocate that AIG threaten the recipients with the loss of their jobs if they don't return the money. Hm, give us your money or something bad will happen to you - is that extortion? Do we really have US lawmakers urging AIG executives to commit crimes? In any case, it doesn't make sense - if they were the no-talent idiots who caused the problems, fire them anyway - if they are the talented guys who are supposed to help unravel the problems, why would we want to fire them?

Much uproar over not only the "bonuses", but payments to counterpartners, including Goldman and foreign banks. (A) wasn't the bailout to enable AIG to meet their obligations? Aren't those payments obligations? (B) Where did they expect the money to go? Was anyone watching?

Interesting to see Dems blaming Dems.

I don't advocate getting rid of Geithner. Nobody better (and there are some) would be nominated by Obama AND accept, I think. I do advocate the Administration filling all those undersecretary slots immediately - no wonder he is overwhelmed, trying to do the jobs of 18 people.

Speaking of appointments, i heard that 30 of 267 appointments so far have been lobbyists. FYI.

(03-22-2009 09:30 PM)Rick Gerlach Wrote:  

(03-22-2009 01:35 PM)OptimisticOwl Wrote:  AIG has been the top story on all the news channels all week, but nobody here has anything to say. I wonder why?

I also wonder if all this uproar would have happened if the payments had been called "deferred compensation" instead of bonuses. I think this designation is closer to the true nature of the payments. Nowhere have I seen anything that indicated they were performance bonuses, but most of the indignation is based on them them being paid for doing a bad job.

Now we have the House passing a punitive taxation bill aimed specifically at these people. i will let others argue about whether or not this is Constitutional. I will just say it is wrong. It also appears that even though an attempt was made to write it narrowly, it is still broad enough to catch some people who aren't the targets. (Hm - targets, is that the word we want?)

I will say this - I have been taxed, audited, investigated, eminent-domained, targeted, and drafted by various agencies of the US, but this action by the house makes me afraid of my government for the first time.
When a small group is targeted by the Congress for punishment, for not being moral or ethical in the eyes of the lawmakers, who is next?

In any case, they were going to get 35% (39.6%?) of the bonuses anyway - so this precedent is being set over about 90mm?

Today, I heard a couple of lawmakers advocate that AIG threaten the recipients with the loss of their jobs if they don't return the money. Hm, give us your money or something bad will happen to you - is that extortion? Do we really have US lawmakers urging AIG executives to commit crimes? In any case, it doesn't make sense - if they were the no-talent idiots who caused the problems, fire them anyway - if they are the talented guys who are supposed to help unravel the problems, why would we want to fire them?

Much uproar over not only the "bonuses", but payments to counterpartners, including Goldman and foreign banks. (A) wasn't the bailout to enable AIG to meet their obligations? Aren't those payments obligations? (B) Where did they expect the money to go? Was anyone watching?

Interesting to see Dems blaming Dems.

I don't advocate getting rid of Geithner. Nobody better (and there are some) would be nominated by Obama AND accept, I think. I do advocate the Administration filling all those undersecretary slots immediately - no wonder he is overwhelmed, trying to do the jobs of 18 people.

Speaking of appointments, i heard that 30 of 267 appointments so far have been lobbyists. FYI.

I would like to see the self-righteous in Congress volunteer to return every dollar contributed by AIG's PAC to their re-election campaigns within the last 18 months. Both presidential candidates, Obama much more so than McCain, received large amounts of money from the AIG PAC.

Further, I'd like to see politicians return any money given by individuals EMPLOYED by AIG who are now receiving these bonuses everyone is in an uproar over.

I get aggravated when I see self-righteous Congressman act high and mighty castigating the current AIG CEO who is receiving a $1 salary and is not the one who instituted the current bonus program.

He was hired in from another insurance firm to sort throught the mess, and he is actually TRYING to do things to salvage the situation. Congress, on the other hand, is trying to look good to the public, reacting to public opinion and generally more interested in those two issues than really trying to understand or resolve AIG's problems.

It's hard to imagine someone who can make the people who helped create our financial crisis look good (clarification - by comparison), but Congress is exceptional in that regard.

The former were greedy and careless.

Congress, on the other hand, has never met an angry mob they weren't willing to join and try to lead, particularly if the votes they needed reside in that mob.

So while I would like to see the bonuses returned as a measure of good will, I'd equally like to see politicians return all of the 'free' money they've received, specifically when it's come from companies that we're now bailing out, AND when it comes from executives of companies we're now bailing out.

(03-22-2009 09:30 PM)Rick Gerlach Wrote:  I get aggravated when I see self-righteous Congressman act high and mighty castigating the current AIG CEO who is receiving a $1 salary and is not the one who instituted the current bonus program.
...
Congress, on the other hand, has never met an angry mob they weren't willing to join and try to lead, particularly if the votes they needed reside in that mob.

(03-23-2009 09:42 AM)texd Wrote:  Yes, some of the bonuses are obscene, but some of them are probably pretty reasonable. On top of that, as has been pointed out, these were deferred compensation arrangements negotiated at least six months ago. In that sense, they're no different than if these payments had been divided up and included in the AIG employee's monthly checks, except for having had the added benefit of actually keeping these people around through December 31, 2008. Would there be this much uproar if these people had been receiving these payments all along to a escrow accounts in their name, which would have either reverted to AIG if they departed prior to 12/31 or opened up to the employee if they stuck around?