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2008-10-08 Home Front Economy
AIG execs hold $440K post-bailout retreat
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Posted by Cromert 2008-10-08 00:00|| || Front Page|| [11130 views ]  Top

#1 Oh, hooray! They found one example where they could make executive pay a public issue (thanks to the loan). Which does nothing to reduce the idiocy and irrelevance and degrading envy of the focus on executive compensation. If you don't like a company's executive pay, don't buy their stock or products, or don't work for them. Free country and all that. And spare us the illiterate bolshevik crap and bigotry.

Posted by Verlaine 2008-10-08 00:11||   2008-10-08 00:11|| Front Page Top

#2 word
Posted by Abu do you love 2008-10-08 01:04||   2008-10-08 01:04|| Front Page Top

#3 Financial glossary:
CEO –Chief Embezzlement Officer.
CFO– Corporate Fraud Officer.
BULL MARKET — A random market movement causing an investor to temporarily mistake himself for a financial genius.
VALUE INVESTING — The art of buying low and selling lower.
GROWTH INVESTING - The art of buying high and selling lower.
P/E RATIO — The percentage of investors wetting their pants as the market declines.
BROKER — What my broker has made me.
STANDARD & POOR — Your life in a nutshell.
STOCK ANALYST — Idiot who just downgraded your stock.
STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
MARKET CORRECTION — What happens the day after you buy a stock.
CASH FLOW — The movement your money makes as it disappears down the toilet.
YAHOO — What you yell after selling it to some poor sucker for $240 per share.
WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR — Former investor who’s now institutionalized.
PROFIT — An archaic word no longer in use.
Posted by Anguper Hupomosing9418 2008-10-08 01:25||   2008-10-08 01:25|| Front Page Top

#4 The people with Rich Derangement Syndrom will eat up stories like this and think it's actually part of the credit problem and that it 'needs fixing'
Posted by Mike N. 2008-10-08 01:51||   2008-10-08 01:51|| Front Page Top

#5 You can just feel the "SAVE THE COMPANY/HELP THE INVESTORS-CUSTOMERS" loyalty and ethics, can't ye???
Posted by JosephMendiola 2008-10-08 03:02||   2008-10-08 03:02|| Front Page Top

#6 The deal gave the government an 80 percent stake in AIG, the right to remove senior management

I hope this retreat was senior management's farewell party.

If you don't like a company's executive pay, don't buy their stock

I was essentially forced to buy their stock, and I don't like the poor management judgement this expenditure demonstrates, so as an owner I wish to show my displeasure by firing them.
(And that claim of poor judgement holds even though this event was probably scheduled and contracted before TSHTF.)
Posted by Glenmore 2008-10-08 08:00||   2008-10-08 08:00|| Front Page Top

#7 So much for the propaganda that senior executives are worth the piles of money shoveled to them.
Posted by ed 2008-10-08 08:13||   2008-10-08 08:13|| Front Page Top

#8 I think you guys are missing the point. They cried and sobbed and convinced the govt that they needed a bailout so they wouldn't go down the shitpipe, but hey have almost half a million to spend on a spa retreat that has nothing to do with generating revenue or mitigating this so-called crisis? I think what the author may be getting at is that they misrepresented the degree of difficulty they were if they have money for this sort of stuff.
The bailout money wasn't really for spa retreats, was it?
Posted by bigjim-ky 2008-10-08 08:58||   2008-10-08 08:58|| Front Page Top

#9 I think Glenmore is right too, anyone who has a mutual fund or an Index fund has basically bought into stocks like this without much redress. Any employee under the AIG umbrella, and that's a lot of people, had no choice but to take their profit sharing and 401k in AIG stock. So, it isn't that easy to divest from AIG. I have yet to break it down in my funds, but I'm assuming it will be under 5%, their written policy on max holdings. But AIG employees just watched their retirements go down the crapper.
Posted by bigjim-ky 2008-10-08 09:04||   2008-10-08 09:04|| Front Page Top

#10 That's my objection ed. These guys think they're smart and 'entitled', the same personal disease that afflicts so many others [particularly on everyone else's dime]. However, the evidence is that they're not. They're demonstration of ego says a lot about them and their approach to the 'problem'. It's an issue of efficiency and results not envy. $440k in psych counseling and transition training bills would have been far more appropriate.
Posted by Procopius2k 2008-10-08 09:05||   2008-10-08 09:05|| Front Page Top

#11 "more than $200,000 for rooms -- some costing as much at $1,000 a night"
Let's be fair here. There had to be more than just the top executives attending this meeting if the room tab hit more than 200 times the highest room rate. So this thing was not an impulse -- it was a long-planned meeting for a bunch of people and it was no doubt largely contracted in advance of the bailout.

Here's the big story in this article:
"On Monday, the committee heard testimony that Lehman Brothers doled out more than $20 million in bonuses to top executives just four days before the investment giant declared bankruptcy"
Posted by Darrell 2008-10-08 09:30||   2008-10-08 09:30|| Front Page Top

#12 From a different article.


AIG execs' retreat after bailout angers lawmakers
By ANDREW TAYLOR, Associated Press Writer Tue Oct 7, 11:15 PM ET
WASHINGTON - Days after it got a federal bailout, American International Group Inc. spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company's meltdown.

AIG sent its executives to the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85 billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.
The retreat didn't include anyone from the financial products division that nearly drove AIG under, but lawmakers still were enraged over thousands of dollars spent on outing for executives of AIG's main U.S. life insurance subsidiary.

This was a top producers conference paid for well in advance.
Posted by Beavis 2008-10-08 09:31||   2008-10-08 09:31|| Front Page Top

#13 More

The St. Regis conference included recognition for vital independent agents who distribute AIG American General’s products - insurance for individuals and businesses. AIG American General - a subsidiary of parent AIG - is in much, much better financial shape than AIG itself. ”It’s one of our viable businesses,” said AIG spokesman Joseph Norton. “They’re fully capitalized. They’re fine. It wasn’t a corporate kind of thing.”


Posted by Beavis 2008-10-08 09:41||   2008-10-08 09:41|| Front Page Top

#14 Oh yeah, did they come across any congresscritters still investigating the safety of cruise ships? To hell with all of them.

Wife saw an AIG commercial couple days ago, said she 'bout threw the controller at the TV. Yes, some in our family have been bum fiddled.
Posted by swksvolFF 2008-10-08 09:42||   2008-10-08 09:42|| Front Page Top

#15 The Regis also offers these two outstanding packages. I would recommend the Last Hurrah for the AIG crowd as well as many in Congress, but NOT for a preggies celebration.

Pamper Your Pooch Package
The package consists of an overnight stay in a Resort view guestroom, a personalized welcome letter to the pet, the exclusive St. Regis doggy bed, pet amenities including “Sniffany & Co.”, “Bark Jacobs”, “Dog Perignon”, or “Jimmy Chew” toys, personalized silver food and water bowls, an array of treats, biscuits, and bones, along with an issue of Hollywood Dog! Pricing for this package begins at $545 per night. (two-night minimum required)

Last Hurrah Package
Enjoy a stay in a luxuriously appointed guest room, while you can indulge with a 60-minute couple’s massage - for her a Pregnancy massage and for him a Therapeutic massage, and a special take home amenity from Spa Gaucin. The package also includes a DVD selection of baby movies including “She’s Having a Baby,” “Nine Months” and “Baby Boom,” available through concierge. Also enjoy a special “cravings” menu which includes items such as Fried Chicken and French Fries, PB&J, Macaroni & Cheese, Angus Beef Burger, Warm Chocolate Cake and Ice Cream Sundae. The Last Hurrah package is available starting at $735 per night, excluding tax and gratuity, and is based on availability. For more information or to make reservations, please contact the resort at (949) 234-3200.
Posted by Besoeker 2008-10-08 09:53||   2008-10-08 09:53|| Front Page Top

#16 Like I said.

Firing bad management or those who misspend company money, or whatever, is fine with me and everybody, I'd guess.

But if it's really public business what private companies do with their money, because people work for them or have 401Ks or invest in mutual funds holding their stock, then I guess there IS nothing that isn't public business. Congress better staff up, lots of work coming their way.

And that's aside from the fact that this apparently was something for people not involved in the issues that brought down the huge company, and even for associated outsiders. Geez - some actual reporting from a wire service. Stop the presses (er, or something)!

I didn't follow the drama, but for those more informed, can AIG's fatal involvement in mortgage-related activities have anything to do with the departure of the former CEO or the actions of former NY AG Spitzer?

Posted by Verlaine 2008-10-08 11:17||   2008-10-08 11:17|| Front Page Top

#17 Verlaine no. That was a personal vendetta that Spitzer had against Hank Greenberg AIG's old CEO.

Posted by Beavis 2008-10-08 11:26||   2008-10-08 11:26|| Front Page Top

#18 It seems like if one branch of your business is fully capitalized and making money, you don't need a bailout. Why don't the bail themselves out if they can afford to do shit like this? Planned or not, no matter the branch, it was almost half a million for a golf weekend. I don't know if you guys pay taxes in the US, but this seems a pretty poor use for them.
Posted by bigjim-ky 2008-10-08 11:54||   2008-10-08 11:54|| Front Page Top

#19  This discussion has been an interesting mix of issues.
(1) A corporation is not a "private" company, but an entity chartered by the government (often the state of Delaware). Its liability is limited -- the directors & stockholders are generally not on the hook for debts the corporation doesn't pay, or for damage the corporation might inflict on "the general welfare". Corporations have eternal life, and can accumulate assets & power in ways "real" human beings cannot. I suspect the original idea (centuries ago) was to create institutions like colleges and hospitals that were given special legal privileges in return for the benefits the community at large received. Over the centuries laws and court decisions have given corporations rights and privileges similar (or better than) to those of individuals, with little if any input from most of the flesh and blood people affected. Whether the benefits we the people have been receiving from many corporations (like AIG) are balanced by the harm the corp's have caused is currently open to public discussion.
(2) The administration of 401Ks tend to be as opaque as possible for the beneficiaries. Often the options for investing are unnecessarily narrow. Few have the opportunity to sell all stocks & go into cash equivalents, for example. It is interesting that 401K investors seem to pay attention to these issues only when the stock market is going down.
(3) Gross overcompensation of corporate executives suggests the corporation is being run by corporate insiders for the benefit of corporate insiders, rather than for the benefit of the stockholders. If corporate dividends paid to stockholders were comparable to corporate compensation for executives, this would not be an issue.
Posted by Anguper Hupomosing9418 2008-10-08 12:20||   2008-10-08 12:20|| Front Page Top

#20 AIG's stock has gone from $70.13 a share to $3.50 a share in 52 weeks. Seems to me that shareholders have much more of a legitimate claim on that $440,000 than the company's executives do. That's not illiterate bolshevik crap, its plundering your investors and pampering the pirates.
Posted by bigjim-ky 2008-10-08 12:23||   2008-10-08 12:23|| Front Page Top

#21 OK, I'll ask the really important question: What, exactly, is $23,380 worth of spa treatments for AIG employees? Because I'm thinking high dollar sportin' ladies. But I must be off the mark on that, right? Somebody tell me I'm off the mark on that.
Posted by Ebbang Uluque6305 2008-10-08 14:35||   2008-10-08 14:35|| Front Page Top

#22 Yes, you are.  This is a spa resort - sports and other legitimate massage is a standard goodie offered at such places.


BTW, this sort of bash is the usual way to reward top sales people in a wide variety of organizations.   If it isn't part of the official revenue contract the independent insurance agents get, it's certainly what they would all expect.  Stop rewarding top agents from outside the firm and AIG stops selling policies at a sufficent rate to keep the rest of the corporate less under water ....

But in any case, as others have noted, the arrangements for this event were certainly made prior to the US Govt loan. Chances are most of the expenses were already incurred and could not be recovered by cancelling it.
Posted by lotp 2008-10-08 14:46||   2008-10-08 14:46|| Front Page Top

#23 
That said the appearances suck.
Posted by lotp 2008-10-08 19:17||   2008-10-08 19:17|| Front Page Top

#24 Someone explain to me how a bank CEO can say "We're fine. We're fine. We're fine. ... oops, we're screwed!"

What happened to the internal accountants, ERP systems, auditors, etc. The buck stops at the CEO (or is supposed to since SOX).

Where are the congressional hearings, the indictments, the perp walks. This does not pass the smell test.
Posted by DMFD 2008-10-08 20:38||   2008-10-08 20:38|| Front Page Top

#25 No need for hearings if nobody did anything illegal. I would remind you that it's not illegal to lose money and it's not illegal to project confidence in order to prevent cusotmers from fleeing in a panic.
Posted by Mike N. 2008-10-08 22:13||   2008-10-08 22:13|| Front Page Top

#26 I'd remind you that one of the key provisions of Sorbannes Oxley (SOX) is that CEO's are responsible for the accuracy of corporate financial statements. You don't wake up one morning and suddenly 'discover' billions of dollars in dodgy loans. Fraud is illegal. Covering up material financial data from regulators and shareholders is illegal. Someone needs to go to jail.
Posted by DMFD 2008-10-08 22:30||   2008-10-08 22:30|| Front Page Top

#27 "Someone needs to go to jail."

I agree.

Let's start with Barney Frank and Chris Dodd, then move on to Charles Rangel.
Posted by Barbara Skolaut">Barbara Skolaut  2008-10-08 23:03|| http://ariellestjohndesigns.com/]">[http://ariellestjohndesigns.com/]  2008-10-08 23:03|| Front Page Top

#28 Don't forget Frank Raines.
Posted by DMFD 2008-10-08 23:08||   2008-10-08 23:08|| Front Page Top

23:57 Betty
23:35 Procopius2k
23:30 SteveS
23:26 Old Patriot
23:21 Frank G
23:08 JosephMendiola
23:08 DMFD
23:03 Barbara Skolaut
22:54 JosephMendiola
22:47 DMFD
22:47 JosephMendiola
22:40 DMFD
22:39 DMFD
22:39 The Sanity Inspector
22:37 The Left
22:31 Frank G
22:30 DMFD
22:20 logi_cal
22:18 Sninesh Prince of the Hatfields5789
22:18 Bobby Fischer.
22:17 Tyranysaurus Snart3464
22:14 Mike N.
22:13 Mike N.
22:12 Grunter









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