Guest fountainhall Posted March 19, 2009 Share Posted March 19, 2009 Like most people, I was outraged to learn about the $160 million or so paid out to AIG executives in bonuses. Yet, I watched some of Edward Liddy's testimony to Congress on CNBC last night and came away feeling (i) he had made a very reasonable case for those bonuses being paid and (ii) he had not tried to hide these bonuses from anyone. To remind everyone, Liddy is a retired, highly respected former Chairman of a major Insurance Company. He agreed to come of retirement at the request of the Bush administration to try and sort out the mess at AIG. His total remuneration for 2008 and 2009 will be $1 per year. As he pointed out, so complex are the financial instruments in the toxic asset division at AIG, the one responsible for well over a trillion dollars of potential losses, that the executives who created them are urgently needed to help unravel them. The bonuses are not performance bonuses per se. Rather they are retention bonuses to persuade these same executives to stay on at the firm, resolve the problems - and thereby effectively work themselves out of jobs. Bringing in new people without knowledge of the background puts at risk the entire wind-down process. Consequently it also puts at risk not only the $80 billion already given to the company by taxpayers, but also the company's ability to fight off bankruptcy - and thus the government's whole strategy of bailing the company out. Clearly mistakes in the handling of this issue were made at many levels, especially in media relations. And how some of these executives were able to take bonuses and then resign, I do not know. But most of the blame has to go to the previous Board and Chief Executive for approving ridiculous contracts and allowing the company to get into such a disastrous situation - not on those trying to solve it. Quote Link to comment Share on other sites More sharing options...
Guest lvdkeyes Posted March 19, 2009 Share Posted March 19, 2009 I can't help but wonder if this is just more smoke and mirrors. Quote Link to comment Share on other sites More sharing options...
Guest laurence Posted March 19, 2009 Share Posted March 19, 2009 A very thoughtful post fountainhall. I do mean to be serious. I have been reading similar commentary in the NYTimes. Quote Link to comment Share on other sites More sharing options...
Guest Astrrro Posted March 19, 2009 Share Posted March 19, 2009 Charley Rangel, Ways and Means chairman, is now pushing a bill that will tax bonuses of guys making over 250K at companies that got TARP funds at 90%. Quote Link to comment Share on other sites More sharing options...
Guest MonkeySee Posted March 25, 2009 Share Posted March 25, 2009 Charley Rangel, Ways and Means chairman, is now pushing a bill that will tax bonuses of guys making over 250K at companies that got TARP funds at 90%. CRAZY Quote Link to comment Share on other sites More sharing options...
Bob Posted March 25, 2009 Share Posted March 25, 2009 I don't see it as crazy at all. Taxpayers' money ought not to be used to reward the idiots that let their companies fail in the first place. People were warning of these derivatives 7-8 years ago and, in my view, these execs ought to have been smart enough to plan for a possible downturn in the value of real estate. It's tough enough choking down the concept of saving their companies and their jobs - but the concept of them using government money to reward themselves for fucking up is way beyond what I believe is fair. The officers and directors of these companies are legal fiduciaries to the shareholders (owners) with respect to the quality of the assets they are purchasing. As a legal fiduciary, they were required to use not just "ordinary care" but "utmost care" in safeguarding those assets. They ought to all be sued as they clearly breached that standard. Quote Link to comment Share on other sites More sharing options...
Guest fountainhall Posted March 25, 2009 Share Posted March 25, 2009 I am less interested in clawing back those AIG bonuses than I am in governments nailing those ultimately responsible for having gambled on highly complex and leveraged financial instruments and failed. They have brought the world's entire financial system to its knees. They should should be charged, tried and thrown in jail. Madoff will probably spend the rest of his life behind bars - and rightly so. But the Chairmen, Directors and Presidents of AIG, Citigroup, Royal Bank of Scotland and other bailed out companies are all free and enjoying their luxury lifestyle. Yet what they have done to shareholders, savers, pensioners and governments defies description. Let's direct our anger at these jerks, sue the pants of them and then throw them in jail for a very long time. Quote Link to comment Share on other sites More sharing options...
Guest lvdkeyes Posted March 25, 2009 Share Posted March 25, 2009 I saw Obama on Jay Leno the other night and he said that what the AIG execs did is not illegal, albeit immoral and unethical. The only thing the government can do to get back at them for what they did is to tax them on the bonuses. There are arguments against doing this, but I am all for it. Quote Link to comment Share on other sites More sharing options...
Gaybutton Posted March 25, 2009 Share Posted March 25, 2009 Something is really wrong when many are struggling just to make ends meet and then they see their tax dollars, dollars that were supposed to rescue the industry, go directly into the pockets of executives who were enormously wealthy in the first place. Liddy may have made his case, but I work for my money. My money is for me. It sure as hell isn't for those people. If it wasn't for the lying, cheating, price gouging, cover-ups, wasteful and unnecessary spending, and lord-knows-what else, our taxes would probably be able to be cut at least in half. To paraphrase John Houseman, let them make their money the old fashioned way; by earning it. Quote Link to comment Share on other sites More sharing options...
Bob Posted March 25, 2009 Share Posted March 25, 2009 Besides the debacles of the last year, American business has gotten totally out of whack the last decade or two. We pay allegedly bright people millions of dollars to run companies and, when things are going bad (meaning they fucked up), they're then paid millions of dollars to go away. If the average citizen didn't do his job, he gets fired and told to get the hell out. These execs, far too often, are handed millions of dollars and never skip a beat. And they've got everybody believing that this is just "normal" conduct of business. In Japan (where the concept of responsibility still occasionally lives), they'd simply give them knives..... Quote Link to comment Share on other sites More sharing options...
Gaybutton Posted March 26, 2009 Share Posted March 26, 2009 We pay allegedly bright people millions of dollars to run companies and, when things are going bad (meaning they fucked up), they're then paid millions of dollars to go away. I don't know. They get millions to come and millions to go. That seems pretty bright to me. Quote Link to comment Share on other sites More sharing options...
Guest laurence Posted April 4, 2009 Share Posted April 4, 2009 Here is a link to an article in the NY Times which gives a different perspective on bonuses. Very good reading. Dear AIG, I quit! Written by the Executive Vice President, AIG http://www.nytimes.com/2009/03/25/opinion/...Quit&st=cse Quote Link to comment Share on other sites More sharing options...
