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Archive for Sunday, March 15, 2009

Insurance giant paying out $165M in bonuses

March 15, 2009

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— American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.

AIG is contractually obligated to pay a total of about $165 million of previously awarded “retention pay” by today, but the troubled insurance giant has agreed to administration requests to restrain future payments.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.

Treasury Secretary Timothy Geithner has asked AIG to scale back future bonus payments where legally possible.

Comments

Richard Heckler 5 years, 9 months ago

Yes but they are asking for more tax dollar assistance???

Taxpayers might be money ahead if AIG would file bankruptcy or go out of business. Obviously taxpayers need to be rid of these big time mismanagers or are they bank robbers?

On PBS NOW two nights ago it was implied that financial institutions were taking on 30 times more than they could cover. Assuming I suppose that the taxpayers would be FORCED to bail them out.

Godot 5 years, 9 months ago

This is why they should have been allowed to go through bankruptcy rather than bailed out.

elfth 5 years, 9 months ago

After this financial crisis has settled, there should never be a private company allowed to become "to big to fail". This allows managers to take risks with other peoples money without the sobering threat of losing their own company and and income.

womanwarrior 5 years, 9 months ago

Why do losers get bonuses? I thought they were for people who were successful. What arrogance! Can those who always support these corporate, so-called successes, try and justify this? I think you'll probably suffer back problems trying to twist this into "they work hard, they deserve it". They work hard at ripping off people. Throw them in jail for stealing public money.

womanwarrior 5 years, 9 months ago

Does anyone belong to a tax payers group? Maybe they should file suit and freeze the assets of all these people. Actually the US government should do that, but if they haven't got the guts, a citizen's group should do it. Take these people to court. They took taxpayer's money, they work for us now.

camper 5 years, 9 months ago

"This is why they should have been allowed to go through bankruptcy rather than bailed out."

Godot, in past years I would have agreed with you. But recently I have seen a company go through bankruptcy and have seen the incredible amount of waste that occurs. The amount of money shelled out to lawyers during Chapter 11 is astronomical....the amount of money shelled out to creditors is minimal.

Bankruptcy should be available for individuals....but as far as business, I'm beginning to think that they should just liquidate and let someone else pick up the vacated spot.

jmadison 5 years, 9 months ago

Has the government accounted for the moneys already spent? Paulson kept a tight lip on who received the money from AIG, Citibank, and Bank of America. Geithner hasn't revealed any of the beneficiaries of the taxpayer's largesse. If Obama were serious about transparency in government the names of the recipients of the bailout would be made known.

KsTwister 5 years, 9 months ago

I will stand on my belief that the insurance industry is the largest accumulation of organized crime this country has. It is easy to hide the audit trail, they overcharge for what they provide and the guys at the top are doing great on taxpayer dollars. From healthcare to home insurance they get millions more then they give. I live for the day they freeze their assets and do some research.

notajayhawk 5 years, 9 months ago

My, I love the smell of class jealousy in the morning!

I wonder how many of you fine folk in your righteous indignation were the same ones screaming bloody murder when the state employees might have had to wait a little while for their paychecks - not have them taken away, reduced, or 'renegotiated,' just delayed. Countless people threw around such statements as 'They have to be paid for the work they already performed,' etc. Well, guess what - these bonuses were contracted a year ago, long before the government gave them one dime. (And, by the way, since part of the bailout included the U.S. government now owning 80% of AIG, these people are for all intent and purposes government employees now, too.)

Oh, right - 'But the company lost money.' Does that mean that every single employee was responsible? The U.S. Congress had an unbelievably low approval rating before the last election - yet most of them were re-elected. How come each individual member wasn't held responsible for the performance of the entire body, as you all seem to want to happen here? (And when is the last time that organization demonstrated any fiscal responsibility or economic acumen?)

And I hate to point this out, but all your b____ing and moaning, all the efforts of the administration and congress to limit compensation to these employees (btw, recent legislation aimed at curbing corporate bonuses in companies that received bailout money, pushed through by Democrat Chris Dodd, specifically excluded bonuses agreed to before February of this year), is the ultimate example of cutting off your noses to spite your collective face. Like it or not, we now own that company, and we've already flushed away $170B or so on it. If you don't offer compensation packages commensurate with what your competitors are offering, the only people you'll have left are the ones who can't get a job elsewhere - meaning there isn't a chance in heck we'll ever see a dime of that money back.

But hey, keep up the ranting, it's always good to see the ignorant and uninformed scream the loudest, even when they have no idea what they're screaming about.

just_another_bozo_on_this_bus 5 years, 9 months ago

"But hey, keep up the ranting, it's always good to see the ignorant and uninformed scream the loudest, even when they have no idea what they're screaming about."

We couldn't have described you better, nota.

Godot 5 years, 9 months ago

"Rep. Barney Frank, the chairman of the House Financial Services Committee, told Fox that bailout recipients should have to follow stricter compensation rules, and said Congress should look into whether the bonuses are "legally recoverable."

"We can't just violate legal obligations, I understand that," the Massachusetts Democrat said. "But I do want to find out at what point these legal obligations were incurred. Who said, and at what point, 'We're going to give these bonuses no matter what?' And I do think it's inappropriate for those people to stay in power at that company."

Frank said that if banks complain that the Obama administration has made things too tough, "They can give the money back. We made that easy."

http://www.cnn.com/2009/US/03/15/AIG.bonuses/

What a friggin' hypocrite Frank is. To use Obama's newly favored phrase, it is unnacceptable that Barney Frank continues to hold any power whatsoever in government considering the hand he had in making this mess. If he and Reid and Pelosi had not worked so hard to get the TARP/EESA passed, the Treasury would not have had the open checkbook to bail out AIG in the first place.

The statement about not breaking contracts is a joke, too. The mortgage cramdown bill sanctions the breaking of mortgage contracts.

If Frank really wanted to undo those AIG contracts, he could - he is just putting on a show, putting up some drama. http://www.cnn.com/2009/US/03/15/AIG.bonuses/

character 5 years, 9 months ago

On Recovery.gov there are performance, accountibility and transparency guidelines and expectations for all federal agencies receiving money so taxpayers are aware of how their money is being spent. Below is a summary of these guidelines:

• Funds are awarded and distributed in a prompt, fair, and reasonable manner; • The recipients and uses of all funds are transparent to the public, and the public benefits of these funds are reported clearly, accurately, and in a timely manner; • Funds are used for authorized purposes and instances of fraud, waste, error, and abuse are mitigated; • Projects funded under this Act avoid unnecessary delays and cost overruns; and • Program goals are achieved, including specific program outcomes and improved results on broader economic indicators.

Since AIG continues to need taxpayer money to survive then why do we expect any less from them. I would expect to see an article that lists all the executive and employee names who receive taxpayer bonuses, the amount of each bonus and what the outstanding performance was that details why they feel they deserve these bonuses at the taxpayer's expense. If they truely believe they deserve these bonuses then there should not be any issue with making this information public. What kind of business sense does a company have that will legally and contracturally provide bonuses in the millions without any stipulation for successful business practices and deliverables.

If the bonuses are what they've stated are retention bonuses then I say let them go find a job elsewhere. If it takes an additional bonus on top of their normal salary with the current status of our economy than I believe they will not be a benefit to any company because they still do not get it! Exactly what is it that we the taxpayers are bailing out ? My question to AIG is what programs or processes do you have in place for your company's future and success and can you deliver with the millions of dollars that you have benefited from taxpayers. One more questions...how would AIG of paid the bonuses that you state are legally bound if you did not receive any taxpayer dollars ?

mom_of_three 5 years, 9 months ago

If the bonuses are due because of commissions, etc, then they should be paid. If bonuses are a result of performance, then hopefully, it was on a case by case basis. According to the above noted article, the government wasn't sure who the bonuses were going to, and needed to verify.
Notajayhawk - stop trolling, and berating people...geez.

Flap Doodle 5 years, 9 months ago

$165 million? That's only a small fraction of the illegal campaign contributions that helped Barry buy his way into the White House.

Godot 5 years, 9 months ago

The taxpayers are not even bailing out AIG. We are simply keeping their doors open, the electricity and the executives in their mansions in the Hamptons so they can continue to cover up the massive fraud that they and other major financial institutions, not just in this nation, but also in Europe, perpetrated. They (Geithner, Summers, Frank, Pelosi, Reid, Obama, et al) are buying time, hoping that some magical formula (another fraud) will be devised so that the trillions of dollars of imaginary credit that was sliced and diced and sold and resold never catches up with them.

The problem is that math is math. You can't fool it. They are drowning in oceans of bad debt, and they are treading water as fast as they can.

staff04 5 years, 9 months ago

But I thought the rich made us all richer??? That's precisely what was being argued on this forum on 3/6...

Godot 5 years, 9 months ago

This is worse than corporate welfare, this is corruption and fraud, brought to you by Congress, the Executive, and Wallstreet.

beatrice 5 years, 9 months ago

snap, I see you are continuing your lies about President Obama and illegal campaign contributions. I'll ask once again -- Got proof? You have been making the same exact claim for months now, yet you have not a shred of evidence. The only thing you are proving is that you are becoming a babbling idiot over your hatred of Obama. You have nothing to offer but more neocon whining because you are a sore loser, just like your new best friend Marion. Honestly, your party crashed the planet -- time to shut the hell up and let others take over for a while.

Stupid conservatives.

Newell_Post 5 years, 9 months ago

If these "retention bonuses" are mandated by employment contracts, then I will bet those same contracts stipulate termination for cause (without bonus) in the event of willful misconduct or gross incompetence. As major shareholders of AIG, we should all press for enforcement of any and all such clauses. The mind-blowing stupidity of their investments is surely evidence of one or both.

If the government needs to rescue AIG and others to prevent a total economic collapse, then reluctantly OK. However, the bankERS and brokERS who made these preposterous deals need to lose their wealth, power, status, and IMHO personal freedom.

I was listening to an interesting debate recently involving both liberal and conservative economists. They agreed that neither Republicans nor Democrats want to go after the powerful individuals behind these frauds, because of the "support" they give to DC. Once again we see the destructive effect of massive amounts of money in the politics of both parties. Neither party will nationalize the bad banks (which all of the economists agreed was the right course of action) because their benefactors would lose their ability to fund future political campaigns.

"Political campaign contributions" = bribes. Always. 100% of the time. Both parties are equally guilty and corrupt.

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