AIG gets taxpayer bailout...BONUS?

[joycenalex]

and is paying bonus...why? any bonus i get is paid to performance and meeting financial goals by my hospital...how in the world is AIG, which has lost millions is paying bonus? if those people were any good at their jobs, their company wouldn't be in this mess....and if the "talent' that created their mess wants to leave for another financial services company...who is hiring today and why do they think their skill set is gonna be wanted elsewhere? .................................................. .......................................David Cho
Washington Post Staff Writer
Saturday, March 14, 2009; 5:25 PM

Despite receiving $170 billion in federal aid and recording a staggering loss for the last quarter, insurance giant American International Group is doling out tens of million of dollars in bonuses this week to senior employees.

While AIG agreed to pay the bonuses months before the government's rescue of the company began, the matter still is a source of anger for government officials. In a phone call on Wednesday, Treasury Secretary Timothy F. Geithner told AIG Chairman and chief executive Edward M. Liddy that the payments were unacceptable and needed to be renegotiated, according to an administration source.

The company has since agreed to change the terms of some of these payments. But in a letter to Geithner, Liddy wrote that the bonuses could not be cancelled altogether because the firm would risk a lawsuit for breaching employment contracts. Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees who are needed to turn the company around
AIG has agreed to restructure the $9.6 million in bonuses it would have paid to the firm's top 50 officers. AIG's top seven executives, including Liddy, have already agreed to forgo this payment altogether. The next 43 highest ranking officers would still receive half of their bonuses now. A quarter would be dispersed on July 15 and the rest on Sept. 15, but these last two payments would be contingent on whether the company makes progress on its restructuring plan.

Other bonus payments to thousands of employees, which total in the hundreds of millions of dollars, are still on AIG has agreed to restructure the $9.6 million in bonuses it would have paid to the firm's top 50 officers. AIG's top seven executives, including Liddy, have already agreed to forgo this payment altogether. The next 43 highest ranking officers would still receive half of their bonuses now. A quarter would be dispersed on July 15 and the rest on Sept. 15, but these last two payments would be contingent on whether the company makes progress on its restructuring plan.

Other bonus payments to thousands of employees, which total in the hundreds of millions of dollars, are still on track to be paid out.
unreal, just massively unreal

[pomtzu]

Now don't you feel better now that you know where your tax dollars are going???

[joycenalex]

a thought...when you are the owner of something, you take care of and maintain it to make you money...if the bonus were paid out in AIG common stock, NOT CASH, that would make the bonus recipients owners; if they company recovers from their (near criminal) behavior by their honest and hard work, they repay the US treasury first and they make money, then do they deserve a paycheck. the idea that these same yutzs are the best and the brightest, would make a maggot gag.

[momoffuzzyfaces]

If I ran the government, AIGs bailout check would get "lost in the mail"!!!

[RICHARD]

OctoKids or AIG AHs that live way over their means?

[Catty1]

http://ca.news.yahoo.com/s/reuters/0...cial_aig_obama

Obama expresses outrage over AIG bonus payments

53 minutes ago

WASHINGTON (Reuters) - President Barack Obama expressed outrage on Monday over hefty bonus payments awarded to employees of insurer AIG and said he directed his treasury secretary to take all legal measures to block them.

Insurance giant AIG received some $173 billion in government bailout money and is now paying $165 million in employee bonuses.

"This is a corporation that finds itself in financial distress due to recklessness and greed," Obama said of AIG.

"Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," he said in remarks at the White House. "How do they justify this outrage to the taxpayers who are keeping the company afloat?"

Obama said he had asked Treasury Secretary Timothy Geithner to use the leverage the government had to pursue "every legal avenue" to push back against the bonus payments.

"I know he's working to resolve this matter with the new CEO, Edward Liddy, who came on board after the contracts that led to these bonuses were agreed to last year," Obama said.

The president said the bonus situation underscored the need for overall financial regulator reform and said the government needed "some form of resolution mechanism in dealing with troubled financial institutions, so we have greater authority to protect the American taxpayer and our financial system in cases such as this. We will work with Congress to that end."

(Reporting by Jeff Mason and David Alexander, editing by Jackie Frank)

[momoffuzzyfaces]

I personally think AIG is trying to pull a fast one. The insurance co I used to work for gave us bonuses too, but only at then end of the year and based on the profits. If we didn't have any profits that year, no one got a bonus.

AIG supposidly has contracts to pay these big bonuses or they may be sued. Give me a break!!! If they go bankrupt, they wouldn't have the money for the bonuses!!! What would they do then?

They say AIG is too big to fail. Well, if they keep cutting employee saleries by 30% but still giving the hot shots, who made the mess in the first place, big bonuses sooner or later, there will only be a company of worthless hot shots and no workers. So, then the co will fail any way. This is why monopolies are discouraged!!!

I'm glad we have a president who is outraged by this!!! If they can't stop the money going to AIG, I'd be sure and let AIG know, that's the end of it. When it's gone, they are on their own to sink or swim.

[cassiesmom]

Officials fear the collapse of AIG "would cripple financial markets ... around the world" -- more crippled than they already are? I'm confused. I don't think I like my tax dollars going to a company that's worth $0.45 per share. Is any company too big to fail?

source: online Saint Petersburg Times (3/3/09)

AIG too big to fail
In Print: Tuesday, March 3, 2009


WASHINGTON — A new definition of desperate times: Even as the government threw a stunning new $30 billion lifeline to American International Group on Monday, the beleaguered insurance giant confirmed it had lost more than twice that much, $62 billion, in a single three-month period.

And many more billions of federal dollars are almost sure to be shoveled into the company for a simple reason: Officials fear its collapse would cripple financial markets in this country and around the world.

The source of trouble for AIG, which has 74 million customers worldwide and operations in more than 130 countries, is its business insuring mortgage-backed securities and other debt against default. That business imploded once the credit crisis struck with force.

The government has now made four separate efforts to save the company, totaling more than $170 billion.

AIG is so big and sprawling, so intertwined with institutions around the globe, that its downfall could set off a vicious chain reaction. Upheaval on such a global scale would plunge the U.S. economy deeper into recession, drive up unemployment and stifle hopes for an economic rebound any time soon.

"Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high," the Treasury Department and the Federal Reserve said in a joint statement Monday.

Turning AIG into a smaller, more viable company, "will take time and possibly further government support," the Treasury and the Fed acknowledged.

Mark Williams, a professor of finance and economics at Boston University and a former Federal Reserve bank examiner, said he thinks at least $200 billion more will have to be extended to AIG.

"AIG is holding the U.S. government hostage at gunpoint," Williams said. "The government can't cut its losses because it is too far into AIG. It has no choice but to keep on pumping money into the company."

Said Terry Connelly, dean of Golden Gate University's Ageno School of Business in San Francisco: "If AIG fails, the taxpayer wearing his or her other hats — the worker, the student loan payer, the car buyer, the homeowner — will suffer even more."

Under the new deal, the government revamped its rescue package, saying it will give AIG an additional $30 billion money on an "as needed" basis. AIG's bailout now totals about $173 billion.

Lawmakers have expressed skepticism over the rescue strategies of the new Obama administration and doubting investors have cut the company's share price to 45 cents.

[moosmom]

According to news reports, Obama is furious and is going to try and stop it. Another buy out?? What a bunch of bull!!

It boils down to pure, unadulterated GREED!!!

It's about time we had a president with brass ones AND a backbone. Hail Obama!!

[moosmom]

To be honest with you, I'm sick and tired of hearing about the economy and it's demise. I think I'll go stick my head in the sand for a while.

[sasvermont]

I didn't have high hopes or good feelings about this AIG bailout to begin with, let alone now. Since I am not an expert on financial matters, I hardly know the answers to their problems. That's why they pay the executives the big bucks, yes?

I do know that when a company performs poorly, bonuses are not a good move. I don't know about where you work, but where I have always worked, we knew on a monthly basis, where the company stood. I think it is called accounting, yes? No money, no bonuses or Christmas parties.

Contracts are broken all the time and hey, if they don't have the money, then how would they have paid the bonuses then.... but with the bailout, then its OK? I don't get that part. I know that when you pool your money, including loans and pay off bad debts, it may leave you with enough (for the moment) to pay salaries and bonuses. They should be made to defer all bonuses until the loan and debts are paid back to the government and not a second sooner.

Hell, what would happen with the company you work for? I bet, bonuses would be set aside until the company was again viable. Duh. It is not rocket science, is it?

Stowe, Vermont, a ski area not TOO far from where I live, has a huge, I mean really huge, construction (development) in near completion, and OWNED by AIG. There were talks in place about selling the project, but who would buy it? And with what? I have driven in the area, looked at the golf course etc. etc. and boy, they must have a ton of money tied up in the project. I don't want to see the place go down in flames, but maybe AIG should sell it, and soon. There must be a Warren Buffet out there somewhere, with millions to spare.

I did see the article written by David Cho and it made me sick. I believe he is with the NYT.

I think Obama et al may need to take a nasty step with AIG before they (AIG)GET IT. AIG is making fools of all of us. I wouldn't be surprised if the public begins to seek out the employees, any of them, to make them feel guilty about the company and how it operates.

If I thought there was a way to boycott AIG, I would. I also have no desire to hurt the folks who work there and have nothing to do with these bonuses.

I am so pi$$ed off right now. I truly hope someone comes up with a way to avoid this misuse of funds to pay bonuses. One person I heard, Barney Frank, I do believe, suggested that the bonuses go forward and then fire them so that they have no job! Hmmmmmmmm. An interesting alternative.
I suggest that they defer the bonuses until the company is profitable.

[sparks19]

this is outrageous and obama better put a stop to it.

I wonder how many other companies that the government has given all this bail out money to are doing the same sort of thing.

The fact that they NEEDED to be bailed out shows they don't know how or care to manage their money responsibly...so WHY are we giving them more to bail them out of a mess they created themselves. lets give them MORE money so they can p!ss THAT down the drain too.

Now whenever the next bail out check is written for the next company I hope people remember this.

[moosmom]

AMEN Sparks19 and SasVermont!!!

[momoffuzzyfaces]

You know, AIG may think it's too big to fail but it seems to be determined to anyway no matter what. Anyone with the sense of a two year old would know you can't keep paying bonuses with money you don't have in the first place. What would they do if they had not received any bailout money?

This is just disgraceful!!!

Maybe the government should audit the books of any company who claims to need a bailout and see if they really need one of just need new management. Heck there are plenty of good honest people out there who could do a better job of running some of those companies than the over paid, stuffed shirts who are getting fat on other people's money.

[carole]

I saw Obama being interviewed this morning regarding this, he was so furious, he was all choked up with anger and said as much.

Gosh my hubbys life insurance is with AIG, i wonder if i should change, they keep re-assuring us it is ok down under, but who really knows eh?

yes i have heard that we don't want to let this company go under either, would be devastating, but to read this makes my blood boil too.

Donna i am with you, everyday i feel depressed and scared just hearing all the bad news about the economy, it is all you see on the news and things like how safe is your job? etc etc, i am sick of it too,we all know it is not good, but why concentrate on the bad stuff all the time, let us hear the good news stories for once,yep i want to be an ostrich too right now.