AIG financial unit gets bonuses - Page 2 - Mercedes-Benz Forum

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post #11 of 55 (permalink) Old 03-17-2009, 12:22 PM
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Looks like Bear is attempting to calm the growing crowd of disapproving masses right here on this board...
I dislike the bonuses as much as anyone but I respect contract law and assume that, if the contract is valid, it is valid. Now if they were written during the period in which bailouts discussions were already on the table, let the investigations begin.

Because the previous Administration failed to cross its Ts and dot its Is there is no reason for this Administration to either break the law or try and retroactively change the law to compensate for that failure.

On the other hand, I assume the object lesson has been fully learned and future tranches will be fully conditioned to insure that the payment will be contingent on the company not paying bonuses until the company pays back the loans and shows profits.

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post #12 of 55 (permalink) Old 03-17-2009, 12:56 PM
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It's too fucking late. These assholes already took the money and left town, some with as much as $6.4M. Now if we can identify them, justice can only be done by paying a couple more thousand tax dollars per head and hire a hit man on all the scum bags.

AIG execs left after 'retention' bonuses, N.Y. official says - CNN.com

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post #13 of 55 (permalink) Old 03-17-2009, 02:56 PM
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It's too fucking late. These assholes already took the money and left town, some with as much as $6.4M. Now if we can identify them, justice can only be done by paying a couple more thousand tax dollars per head and hire a hit man on all the scum bags.

AIG execs left after 'retention' bonuses, N.Y. official says - CNN.com
These outraged Dems, just like Elau, are acting hysterically and irrationally.

The retention bonuses were devised and disclosed, both the amounts and the payment schedule, in January, 2008, pre bailout.

Despite the proposals by Schumer and Dodd to tax the bonuses to zilch value, Dodd himself inserted into parts of the stimulus bill that limited comp to $500,000 that the limits would not include prior negotiated bonuses.

With such a high amount of screaming about this and such a low probability of prevailing to recover the payments, one has to ask what the attention of the public is being diverted from--next year's budget deficit of $1.7 trillion? the Bamster's slipping poll numbers 53%? the lack of a bank bailout plan? You can pick it.

Think of another unintended consequence: Bloomberg announced that only 40,000 wealthy folks pay the majority of income taxes to NYC. If they disappear, the city is toast. One giant welfare state is all that's left with no one to pay the bills.

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post #14 of 55 (permalink) Old 03-17-2009, 06:01 PM
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These outraged Dems, just like Elau, are acting hysterically and irrationally.

The retention bonuses were devised and disclosed, both the amounts and the payment schedule, in January, 2008, pre bailout.

Despite the proposals by Schumer and Dodd to tax the bonuses to zilch value, Dodd himself inserted into parts of the stimulus bill that limited comp to $500,000 that the limits would not include prior negotiated bonuses.

With such a high amount of screaming about this and such a low probability of prevailing to recover the payments, one has to ask what the attention of the public is being diverted from--next year's budget deficit of $1.7 trillion? the Bamster's slipping poll numbers 53%? the lack of a bank bailout plan? You can pick it.

Think of another unintended consequence: Bloomberg announced that only 40,000 wealthy folks pay the majority of income taxes to NYC. If they disappear, the city is toast. One giant welfare state is all that's left with no one to pay the bills.
There was a previous thread on this back in November. Bloomberg has been making drastic cuts to the budget and it is getting worse.

http://www.benzworld.org/forums/off-...ml#post3144185

As for what all the screaming and posturing is about? Soundbites for the next election cycle. This is pure juice. No diversions. Obama has already announced the next year's deficit himself, we already knew it would suck. The bank bailout plan, while unpopular is working to spec [though the spec, drawn up by ben and hank is pretty shady]. We have not had another major failure since the first trance.

So put this one down to showboating.

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post #15 of 55 (permalink) Old 03-17-2009, 07:57 PM
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Retention agreements are typically just that, additional compensation for staying the agreed upon period. No performance objectives, but the assumption is that prior performance merited retention. There's usually an escape clause for the company, but it involves paying someone to go.

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post #16 of 55 (permalink) Old 03-17-2009, 09:08 PM
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These outraged Dems, just like Elau, are acting hysterically and irrationally.

The retention bonuses were devised and disclosed, both the amounts and the payment schedule, in January, 2008, pre bailout.

Despite the proposals by Schumer and Dodd to tax the bonuses to zilch value, Dodd himself inserted into parts of the stimulus bill that limited comp to $500,000 that the limits would not include prior negotiated bonuses.

With such a high amount of screaming about this and such a low probability of prevailing to recover the payments, one has to ask what the attention of the public is being diverted from--next year's budget deficit of $1.7 trillion? the Bamster's slipping poll numbers 53%? the lack of a bank bailout plan? You can pick it.

Think of another unintended consequence: Bloomberg announced that only 40,000 wealthy folks pay the majority of income taxes to NYC. If they disappear, the city is toast. One giant welfare state is all that's left with no one to pay the bills.
Asscrack1, are you saying it is OK for them to lied about the bonus for retention purposes? Every one who received bonus already left the firm. I find your thinking is the exact cause this country in the shape that we are in. This is not about politics just in case you have not notice.

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post #17 of 55 (permalink) Old 03-18-2009, 08:08 PM
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Regarding these bonus contracts and the concept of retention or performance. Has anyone seen a boilerplate released that would shed some light on exactly what they were paying for, and for what periods?

If retention, and the period was 2008, the recipients might have fulfilled their requirements. On the other hand that flies in the face of the "we want to retain the "best and brightest"". I am guessing either NYAG or someone will finally publish one before this is over so folks can have answers.

Apparently Wall Street is not too upset about it. AIG is up 418% in the last EIGHT trading days.

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post #18 of 55 (permalink) Old 03-18-2009, 08:12 PM
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We were pretty much counting on you to find it.

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post #19 of 55 (permalink) Old 03-18-2009, 08:31 PM
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We were pretty much counting on you to find it.
Apparently I have been to busy posting and going to the ER and stuff.

I will get right on it...well, tomorrow.

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post #20 of 55 (permalink) Old 03-18-2009, 08:46 PM
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Can't seem to find the contracts yet but found this article very interesting on a couple of levels.



AIG chairman inherits retention bonus mess
By JIM KUHNHENN Associated Press Writer


Mar 18th, 2009 | WASHINGTON -- Edward M. Liddy, chairman and CEO of American International Group Inc. since last fall, has become the reluctant defender of princely employee bonuses that members of Congress -- and much of the American public -- find indefensible.

AIG, the giant insurance company that has received $170 billion in government assistance, is paying more than $200 million in bonuses to keep employees from fleeing its troubled financial products division. On Wednesday, Liddy was to pull up a chair at a congressional witness table and take the heat.

The retention payments -- ranging from $1,000 to nearly $6.5 million -- were not his idea. Liddy himself is not getting a bonus. The deals were cut early last year, long before then-Treasury Secretary Henry Paulson asked Liddy to take over the company.

"I do not like these arrangements and find it distasteful and difficult to recommend to you that we must proceed with them," Liddy wrote to the current treasury secretary, Timothy Geithner, over the weekend.

But the payments went out. Congress is in a lather and wants the money back. And Liddy, who had been scheduled to testify about AIG before the bonus story took root, is a timely target.

The clamor over compensation overshadowed AIG's weekend disclosure that it used more than $90 billion in federal aid to pay out to foreign and domestic banks, including some that had multibillion-dollar U.S. government bailouts of their own. AIG is the single largest recipient of government assistance -- a company whose financial transactions were so intricate and intertwined that it was considered simply too big to fail.

In an essay published Wednesday in The Washington Post, Liddy wrote: "The company's overall structure is too complex, too unwieldy and too opaque for its component businesses to be well managed as one entity. So the strategy we continue to pursue ... is to isolate the value in the company's component parts, capture that value to pay back money owed to the government, and allow AIG's healthy insurance companies to continue to prosper for the benefit of policyholders and taxpayers."

Lawmakers already were troubled by the idea of an institution that could single-handedly topple the financial system. Now, Liddy will appear before a House Financial Services subcommittee just as lawmakers from both parties are casting his company as the symbol of excess and abuse of taxpayer dollars.

Meanwhile, Rep. Barney Frank, chairman of the Financial Services panel, said he hopes Congress can rewrite a Depression-era law the Federal Reserve used to plow $85 billion into AIG, without conditions and without the need for congressional approval.

"The federal government is a major owner of this company. We're the owners, not just the regulators," Frank, D-Mass., said Wednesday on CBS's "The Early Show."

"It is my hope that before much further, we will amend that statute," he said. Frank said the mere existence of the 1932 statute enabling the Fed to make the direct payment rendered a no-strings bailout as "a fait accompli."

Rep. Carolyn Maloney, a New York Democrat who is on Frank's committee, said that "Congress is going to recoup this money."

Maloney said this will happen one way or another, "whether it's through taxes, through a contract change. They say you can't change a contract. We change contracts all the time."

Maloney said on NBC's "Today" show that "we're looking at a number of proposals."

Congress and the Obama administration on Tuesday appeared to race each other to find ways to strip bonus recipients of their money. The Democratic chairman of the Senate Finance Committee, Max Baucus of Montana, and the panel's top Republican, Charles Grassley of Iowa, immediately proposed legislation that would require companies and individuals to pay a 35 percent tax on all retention awards and on all other bonuses over $50,000. Others suggested even higher tax rates.

"If you don't return it on your own, we will do it for you," said Sen. Charles Schumer, D-N.Y.

Geithner said he was working with the Justice Department to find ways to recover some of the payments. He cited a provision in the recent economic stimulus law that gave him authority to review compensation to the most highly paid employees of companies that already have received federal assistance.

Explaining the sudden burst of official outrage, the White House for the first time on Tuesday night said Geithner learned of the impending bonus payments a week ago Tuesday; he told the White House about them last Thursday, and senior aides informed President Barack Obama later that day.

As talk of Geithner's possible resignation swirled around Washington, White House officials were obliged to say that he still retained the president's full confidence.

Overall, AIG has paid $220 million in retention awards to its financial products employees; it distributed $55 million in December and $165 million had to be paid by Friday. Documents provided by AIG to the Treasury Department said the awards ranged from $1,000 to nearly $6.5 million. Seven employees were to receive more than $3 million. New York Attorney General Andrew Cuomo said AIG last week paid bonuses of $1 million or more to 73 employees, including 11 who no longer work there.

But even as the White House continued to label the payments outrageous, Geithner noted that Liddy, the former CEO of Allstate Corp., took the helm of AIG at the government's request.

"He inherited a difficult situation, including these ... retention contracts, which were entered prior to his or the government's involvement in AIG," Geithner wrote in a letter to congressional leaders Tuesday.

In his own letter to Geithner on Saturday, Liddy wrote that if it had been up to him, he would have designed the retention payments differently and at lower levels. But, he said, his hands were tied.

"Honoring contractual commitments is at the heart of what we do in the insurance business," he said.

AIG chairman inherits retention bonus mess - Salon.com

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