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| Your Tax Dollars at Work: More Bonuses at AIG |
| 2008-12-14 |
| I guess I shouldn't complain. Obviously, the abrogation of the terms of the loan mean nothing; I should have known that this was the first of the American International Group Inc., the insurer under fire for paying 168 executives not to quit after a government takeover, is giving retention awards to at least 2,000 more employees, according to a person familiar with the matter. The "retention bonus" equals as much as a year's salary and recipients were ordered to keep the payment secret, said the person, who declined to be named because the plan was labeled confidential. Awards were offered to as much as 10 percent of staff at businesses that are for sale, including plane-leasing and insurance units in the U.S. and overseas, the person said. "If it has the money to give these disguised bonuses to thousands of its employees, then I think it is time for Mr. Liddy to write a check to the federal government repaying the money it took," said Representative Elijah Cummings, a Maryland Democrat, in a statement yesterday. Maybe you shouldn't have written the check funding this insanity to begin with. |
| Posted by:badanov |
| #12 they should shoot all the top level employees for being so stupid |
| Posted by: sinse 2008-12-14 17:28 |
| #11 Ok I'm kidding, AIG was the Enron of the insurance industry. I have to disagree. From a reputational standpoint, AIG is the Goldman Sachs of the insurance industry - it is the gold standard. AIG people will have no problem getting new jobs - these aren't UAW high school dropouts we're talking about here. And - for argument's sake - if they were going to have difficulty getting new jobs, don't you think they would get out today and get a head start, instead of waiting for AIG's carcass to grow cold? These are A-type personalities used to working 11 hours a day and coming in a couple of weekends a month. Besides, think about the quality of people you're going to be able to hire to replace them - AIG is essentially the walking dead. All that remains to be done is settle the remaining claims and counter-claims before the rotting carcass is tossed in the lime pit. And those claims and counter-claims are for big money. Better to lose hundreds of millions on claims and counter-claims because the replacement workers are either too ignorant, too lazy or too stupid to figure out how to defend Uncle Sam's interests, just so we can say we stuck it to the people who worked for AIG? I don't think so. |
| Posted by: Zhang Fei 2008-12-14 16:26 |
| #10 I'm actually sympathetic to the retention bonuses. AIG, like Bear Stearns, is not so much being bailed out, as it is being wound down and liquidated. This means that everyone on board today faces termination in the future. It is always easier to find a job when you have one than it is to do so after you're terminated. With or without retention bonuses, every one of the people still at AIG is probably sweating his or her decision to stick around. Not having that bonus makes the decision easier - jump ship today, and have a better chance of being able to make your mortgage payments tomorrow, given that working at AIG is not only a dead end, it's a brick wall. Why pay bonuses to retain AIG personnel? Because they have specialized company-specific knowledge. The financial world isn't like auto assembly. A lot of esoteric knowledge is passed on from one colleague to another - it changes so much from month to month that writing it all down would require double the work force. And a lot of this knowledge is specific to given clients and situations. If the existing people leave, it might take 5 or 6 people to untangle all the complications now being covered by one person. And all the complications might not even come out - things that could result in millions of dollars worth each of uncollected funds or unchallenged claims from counter-parties. This is all very penny-wise and pound-foolish. If they don't pay the bonuses, existing workers will leave to get head-starts in other companies or industries, and the final bailout tab will be much higher. I was heavily against the bailout from the beginning. But now that the bailout money has been committed, let's do it properly instead of being penny-wise and pound-foolish. Staff salaries are minuscule compared to the amounts that will be fought over both in and out of court. The existing staff are key to preventing the new owners (i.e. the taxpayer) from being royally screwed by company's counter-parties. |
| Posted by: Zhang Fei 2008-12-14 16:10 |
| #9 Quit? Where the hell are they going to go? |
| Posted by: bigjim-ky 2008-12-14 15:22 |
| #8 I'm sure all those who aren't eligible for AIG bonuses are now shopping their resumes. No doubt rominently featuring AIG 2008 in the employment history section. |
| Posted by: ed 2008-12-14 15:01 |
| #7 Retention bonuses indeed. Other companies must be clamoring to get a hold of these blue chip execs. Ok I'm kidding, AIG was the Enron of the insurance industry. The orderly dissolving of AIG by others "poaching their talent" would be a good thing -- by getting a lemon off the public books to make room for the other basket cases we have to bailout.. |
| Posted by: regular joe 2008-12-14 14:55 |
| #6 I believe there's an excess of middle and upper executive talent available today after numerous collapses Seems to me they are efectively unhirable after running their previous busines agrond, no-one will hire Known Failed Execuitives. (Ask any pevious ENRON exec.) |
| Posted by: Rednek Jim 2008-12-14 14:54 |
| #5 AIG shouldn't have ANY bonuses. What are they gonna do, quit? They've managed to run their bizniss into the ground and performance counts. |
| Posted by: Frank G 2008-12-14 14:38 |
| #4 But Steve, that's the whole point. Public funds shouldn't be used for private purposes, and private actors should be making their decisions based on their own market calculations. The article says the targeted employees are at the business divisions being sold to pay back the "loan". That's about AIG's business future, not about survival and playing their supposedly vital role in the financial house of cards just partly collapsed. One wonders how much potential wealth and innovation have been and are about to be squandered with these dumb interventions. I don't buy Krauthammer's exaggerated stuff about the door to true disaster being opened up by the last disastrous moves of the current administration, but there's little doubt the new folks will manage to inflict major damage on wealth-creation, freedom, and prosperity. And with half the public seemingly unable to get enough of this, due to envy and ignorance, it's incredibly bleak for anyone with a clue and principles. |
| Posted by: Verlaine 2008-12-14 12:49 |
| #3 We need to bring back Madam Defarge |
| Posted by: 3dc 2008-12-14 11:52 |
| #2 I believe there's an excess of middle and upper executive talent available today after numerous collapses. That means the real 'bonus' is keeping the job you have by your good performance, not expect 'extras' when actually there are people who are becoming more and more hungry enough to ask for your job at a lower pay rate. |
| Posted by: Procopius2k 2008-12-14 11:07 |
| #1 I'm sympathetic to a degree. Good people who know the system and can make a company work are hard to find and harder to keep. If these are the mid-level folks, then a years salary isn't so big (even in Neu Yalk). |
| Posted by: Steve White 2008-12-14 11:00 |