It’s not their money, but they get to spend it. Why not indulge?
http://www.youtube.com/watch?v=-MQp-5lZToE |
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Written By:
Augustus
URL:
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DC plans often involve a contractual obligation. It might not be as simple as telling the employees to bug off until later.
Besides, what, exactly, did you think you were paying for when the gubmint agreed to this in the first place? I know that this blog was pretty uniformly against it, but if the funds aren’t in place to pay various obligations and operating expenses, what are they there to pay for?
With that being said, executive bonuses for the boneheads that put AIG in this position clearly should be scrapped where possible. |
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Written By:
Phil Smith
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I think they get the point where it isn’t their money, so might as well hand it out as they are able...
/spit |
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Written By:
Scott Jacobs
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I know that this blog was pretty uniformly against it, but if the funds aren’t in place to pay various obligations and operating expenses, what are they there to pay for? Phil, it’s called "deferred compensation" and it is deferred against their own earnings.
What has AIG earned lately? Uh, nada.
Sounds to me, then, that such compensation remains "deferred" until they do.
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Written By:
McQ
URL:
http://www.QandO.net
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WTF?
Most Americans are wondering why we don’t take back what they have already been paid, but to pay them deferred compensation for the biggest single financial f*ck-up in corporate history is nuts.
I can’t imagine why they think they need to hold on to these people, it’s not like they are going to have stellar resume’s.
Last Position: AIG Securitized Mortgage Insurance Specialist
Responsibilities: My responsibilities including insuring securitized mortgage instruments which included mortgages the terms of which precluded any possibility of repayment on portions of the instruments which my company is now responsible for, creating a cash liability borne by American taxpayers to the tune of $150 billion. The called Enron executives "the smartest guys in the room" and they only vaporized billions in employee and investor dollars, so I must be a genius!
Yeah, I’m going to hire THAT guy!?!?
We can’t send them to prison (probably), we can’t take back pay away from them, but we can damn sure shut the spigot off now.
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Written By:
CaptinSarcastic
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saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant. And if not they’ll go where?
The Obama admin. is full up on financial execs tied to troubled institutions already |
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Written By:
shark
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I missed the part where it was an early payout. But they don’t have a choice about paying scheduled claims, any more than they could refuse to pay salary. |
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Written By:
Phil Smith
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The silver lining here is a rock-solid case against future bail-outs. AIG has acted like a bunch of douchebags, and so have become the example of why you don’t do this sort of thing. |
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Written By:
Ronnie Gipper
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Where does AIG think these people are going to go? Just walk away from their high paying jobs to the unemployment line?
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Written By:
OdysseusInRTP
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On the contrary, these employees have done invaluable service to AIG. They’ve pulled off a deal that few others were able to. Certainly not the crew at Lehman Brothers. I mean, just how often do you find an investor who is willing to sink $152 billion into your company with almost no strings attached? |
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Written By:
kishnevi
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http://kishnevi.wordpress.com/
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Bwahahahahaha, I want to know EXACTLY where all these super stars are going to go since they did such a sterling job recently.
I suppose if they don’t get what they want at AIG they’ll jump to some OTHER company the government is bailing out, is THAT how it will work?
So, we can now confirm we have major disconnect from economic reality in the government, and in the ’club’ these executives belong to.
And they were worried the Republicans were big on corporate welfare....
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Written By:
looker
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I think we need to be careful about just which AIG employees we are talking about. There are a large number of them who work for subsidiaries and deal with different markets and services that have nothing to do with the mortgage securities mess.
Yes, appropriate belt tightening is in order even for those subsidiaries, but they still need to provide reasonably competitive compensation or risk losing top performers in what are still profitable areas. Wrecking the still viable parts of AIG is not going to do anyone, including taxpayers, any good. |
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Written By:
Dave E.
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http://fishfearme.blogs.com
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And when the company I work for goes down, who’s going to bail us out, we’re not big enough for lobbyists, we didn’t insure crappy investments that are worth billions of dollars (thereby making it a government problem).
If the employees want to move, they should move. If they’re that good they won’t have a problem somewhere else. Meanwhile we’re supposed to accept AIG’s opinion on the value of these people, which right now I find rather suspect.
Your company makes crappy decisions, you suffer.
That’s the way business works.
I don’t give a rat’s @ss on fire if part of their company did okay, and part did bad. If the bad outweighed the good that’s their problem, how the hell did it become an American Taxpayer problem.
Why am I bothering to ask....Wrecking the still viable parts of AIG is not going to do anyone, including taxpayers, any good. we’ve already bought into the mindset this is an American Taxpayer problem. |
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Written By:
looker
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Looker-I understand your anger, but rightly or wrongly the ship has sailed. AIG is now a taxpayer problem whether we like it or not. The only way we get our money back now is through the profits or sale of those parts of AIG that are still viable. Burning those down in a fit of pique makes absolutely no sense. If a division of AIG, retirement planning just as an example, is profitable, and the profits or the proceeds from the sale of that division goes toward paying back the government loans, why would we wreck that division by making the best talent flee? Talent that had no culpability in the current mess. I don’t see the logic. |
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Written By:
Dave E.
URL:
http://fishfearme.blogs.com
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If a division of AIG, retirement planning just as an example, is profitable, and the profits or the proceeds from the sale of that division goes toward paying back the government loans, why would we wreck that division by making the best talent flee? If a division is profitable then let those who are in that division get their deferred compensation from those profits. For the rest of AIG, the compensation remains deferred until there is profit.
It’s not difficult to understand. The funds allocated under the bailout are not there to pay deferred compensation to those who don’t deserve it and haven’t yet produced the profit to pay it. And for those who do, it should come from the profit they’ve generated by their work. |
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Written By:
McQ
URL:
http://www.QandO.net
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Deferred compensation is usually part of an employment contract. If they don’t pay it out they’ll get sued.
The reason such a thing exists is...
...wait for it...
.... a tax shelter.
Nobody pays taxes on pay until you actually get paid.
Let’s say Joe makes $250,000 a year. But he doesn’t need that much and with azzhats like Obama looking to tax the crap out of him he takes a deferred compensation package. So he signs a contract saying he’ll get $150,000 a year now and $100,000 later. He only pays taxes now on the $150,000. He only pays taxes on the $100,000 later, when he actually gets paid. Well, for some people, that later is now and AIG owes them. If they don’t pay them they’ll be in breach of contract and get sued for it.
Don’t blame AIG for this one. Blame the tax code. Blame the politicians in Washington who look at $250,000 a year as rich and not paying their fair share. |
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Written By:
tkc
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Deferred compensation is usually part of an employment contract. If they don’t pay it out they’ll get sued. Sounds like a personal (or personnel) problem to me.
Bailout money isn’t for compensation. That’s what company funds are for.
I think the point made earlier is the salient one, when you hand out billions and billions with very few strings, you can count on it being abused. |
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Written By:
McQ
URL:
http://www.QandO.net
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Most Americans are wondering why we don’t take back what they have already been paid, but to pay them deferred compensation for the biggest single financial f*ck-up in corporate history is nuts. Time to ask your guy since they contributed money and advisors to his campaign.
You voted for him so stop complaining.
And as for jail time, Obama’s admin will see to it that none of these guys sees a single indictment. |
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Written By:
capt joe
URL:
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Sounds like a personal (or personnel) problem to me.
Bailout money isn’t for compensation. That’s what company funds are for.
I think the point made earlier is the salient one, when you hand out billions and billions with very few strings, you can count on it being abused. What you are getting at, and something we may agree on, is that the bailout was a bad idea.
AIG has contracts it must abide by. The reality is that they can’t. In the normal world, this is a case for bankruptcy. Normally, in a bankruptcy, a company is given some protection from their creditors, in this case, the holders of deferred compensation contracts. Instead, we have a bailout, and then complain that the old contracts, the old way of doing things, will take the day.
I’m sorry, but that complaint absurd. If you want to reward bad behavior then don’t complain about who gets the grift. I sincerely think you’re against the bailout but this is not a case to make your complaint with. The deferred compensation contacts are between AIG and their employees that took them. Thanks to government intervention, me and you will end up holding the bag. The problem is not the bag. The problem is who it was given to. |
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Written By:
tkc
URL:
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"Deferred compensation is usually part of an employment contract."
How many of these people have contracts? I have a hard time believing there are enough contracted employees to justify $503 million. |
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Written By:
timactual
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AIG has contracts it must abide by. Not as I see it - the rules changed the day they accepted taxpayer money to bail them out. There alternative was bankruptcy and those contracts wouldn’t have been worth warm spit at that time, would they?
So, no, you can’t suddenly go all legal when the game has changed. You can’t suddenly claim "we have to do this with your money, we don’t have a choice".
Yes. There is a choice - and I just laid it out. Either take the money and use it as it was intended (which isn’t to pay deferred compensation) or walk away from the money and suffer through the result (bankruptcy) in which deferred compensation won’t be paid either. |
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Written By:
McQ
URL:
http://www.QandO.net
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I used to be a small business owner. I do not understand how or why anyone that is not in a feesable market to make money would want to keep borrowing it. I also do not understand how some of these CEO’s keep getting these ungodly bonuses with their companies asking for more. Where did I go wrong? |
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Written By:
rockman
URL:
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Much as I hate to say this, a lot of the troubles started with the labor unions in this country. I don’t begrudge them to be in place to protect workers against unsafe working conditions and things like that. But the problem is far more complex than that.
We’ve been building to this time of reckoning for decades, going back as far back as the 1960’s. Labor unions began to flex their power, demanding ever larger wage increases, with the government standing behind the unions by making it difficult, if not impossible, to hire replacement workers for strikers.
When you bring the wages of essentially unskilled workers way up, that, in turn, fuels the expectations of those who ARE skilled and those wages go up by the same amount—and then that continues to the executive level—and on and on.
I can’t believe the ignorance of some labor unions (UAW being a prime example) that claim that their percentage of "labor cost" is small. Each part that goes into a vehicle has labor attached to it, which is compensated. Every step of the way to the completed vehicle, there is this "value added" by labor.
We need to take time to rethink our philosophies which base our compensation on longevity rather than actual value. If you’ve got people at a janitorial level in some factories making 30K+ per year, well, something’s wrong. If we continue on this road, what incentive does anyone have to improve their skills and be worth more to an employer? Let’s think about where we are headed!
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Written By:
Rudy Kemp
URL:
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