AIG and Those Bonuses - Time for a lawsuit?

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Permalink Reply by Charles on March 18, 2009 at 12:07pm

I feel like rioting. Yes right away. No, lest the recipients are murdered or robbed.

I was wondering where a small fraction of the 200 BILLION went.

Meanwhile a teacher in LAUSD has 52 kids in one classroom. The kids share textbooks & alternate homework nights because there aren't enough of them.

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Permalink Reply by Margaret on March 18, 2009 at 3:47pm

One congressman had a pretty clever idea of taxing bonuses that exceeded $10,000 by 100%, which would put the money right back in the governments pocket..until it's given to some other failing company.

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Permalink Reply by Eugene on March 18, 2009 at 5:09pm

interesting question since the employees have a contractual right to the compensation. Liddy's argument was essentially that the money was needed to assure that the employees wouldn't jump ship. After all, someone needs to handle the billions of dollars in the books.

Congress really went after Liddy today and sought out to embarrass him on national TV. They did it primarily because their constituents want the heads of senior officials at AIG.

I heard that the bonus money was like 1/8th of 1 percent of the stimulus money they got. The employees should be allowed to keep the money per their agreement. AIG will give the money back though. It's in their best interest.

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Permalink Reply by Eugene on March 18, 2009 at 10:11pm

i see your point. i would be interested to see the actual contract that both parties previously agreed to. I believe if a person/company make a promise, they should keep it. I'm don't think AIG management or the government did a good job to prevent this, that's for sure.

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Permalink Reply by Will on March 18, 2009 at 10:40pm

It sickens me to the core that the same people that broke the world are getting bonuses for it. One division at AIG created a $440 billion+ hole in AIG from basically insuring banks and investors that people wouldn't default on their mortgages... credit default swaps on collateralized debt obligations. That is half a trillion dollars that basically disappeared.

But, when it comes to the question of whether the bonuses still get paid... I don't know. Some of the bonuses shouldn't be thought of as bonuses in the traditional terms that we all think about them. They're more like commissions that you contract for versus something nice that your boss does for you at Christmas time out of the goodness of his heart. The "bonuses" are written into their employment contracts. Contractually, AIG is obligated to pay them.

Admittedly, some of the bonuses are so-called "retention bonuses:" bonuses that are paid to keep the brightest people working at AIG. This is good for us because we taxpayers now own 80% of AIG. I think we'd like the best employees to stay with us.

At the same time, I'm glad that a lot of the people receiving bonuses have decided to return them. Ultimately, they get paid tons of money. The economy is going to get better again eventually and they're going to be paid a ton more money. It would just be bad form for them to get paid for breaking the world.

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Permalink Reply by sAm on March 19, 2009 at 12:04am

I know they were contractually obligated to pay the bonuses and under normal circumstances those should be paid. But these are not normal times and AIG is not a normal company. Taxpayers are paying these bonuses. Our hard earned money is going to pay people that ran AIG into the ground. Retention? If anything these guys don't need to be retained. Somewhere up the ladder, someone has to be held accountable. Those are the people that are getting million dollar bonuses.

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Permalink Reply by Will on March 19, 2009 at 12:45am

The small division of AIG that was engaged in the credit default swaps created all the problems at AIG. For the most part, their insurance arm does great. I don't think the people that did a good job should be penalized. I don't know. I think AIG and the market as a whole should be better regulated, but I still think that we need to keep the people that actually did a good job over there at AIG. We own AIG now. We should try to keep the people that are going to give us the best return on our investment, shouldn't we?

I agree that it's a bitter pill to swallow, but I want the people that are responsibly running AIG to be in there to make sure we get our money back.

Btw: AIG's cheif exec is taking $1 salary this year.

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Permalink Reply by Will on March 20, 2009 at 12:24pm

Okay. So I found out that people that got the bonuses are the people working in AIGFP, the Financial Products division. Yes, they are the same ones that broke the world by selling the CDSs on the CDOs. Fuck them.

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Permalink Reply by Hoai Thu on March 20, 2009 at 1:13am

People who received bonuses from the bailout money should have to pay it all back. They helped create this mess and do not deserve any bonus for doing that! That's very unreasonable... absurd is more like it. It's like you're getting rewarded for creating a mess. It does not make sense. Not only should they pay it all back, they should be reprimanded for their actions that lead to this mess.

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