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Admittedly, I have not paid much attention to this AIG stuff, however...

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 11:28 am on Mar 18, 2009
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weren't these bonuses, or at least a substantial amount of these bonuses, contractually obligated?

If the answer to that question is "yes," then why the hell is everyone making such a big deal out of this?


Replies to: Admittedly, I have not paid much attention to this AIG stuff, however...


Thread Level: 2

If they are contractually obligated, why is it called a bonus?

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 1:03 pm on Mar 18, 2009
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If it's a retention bonus, why are people receiving them who have already left the company?

If the company has fallen so hard under the executive leadership of these ethically-challenged money-grubbers that they are begging for tax-payer cash, why should they be retained?

It's not a bonus. It's nothing but a way for these folks to pay themselves off before losing their ass in what they KNEW would be happening - complete failure of the company that got greedy by making unethical (if not immoral) business deals.


Thread Level: 3

If someone has already answers this, I apologize.

Author: Trucker2 (1573 Posts - Original UHND Member)

Posted at 2:49 pm on Mar 18, 2009
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It's my understanding it's due to some IRS regulation[s], and is designed to lessen the tax impact.

Thread Level: 4

Yeah, cause the IRS taxes "bonuses" less than "lump sum payments". Thanks.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 2:54 pm on Mar 18, 2009
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Stick to fearmongering about Muslims.

I'm only here because my firewall blocks Valhamma.
Thread Level: 5

I knew just you'd appreciate my imput! ;^)

Author: Trucker2 (1573 Posts - Original UHND Member)

Posted at 3:02 pm on Mar 18, 2009
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(no message)

Thread Level: 6

Almost as much as I'd appreciate your "input"

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 3:33 pm on Mar 18, 2009
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(no message)

I'm only here because my firewall blocks Valhamma.
Thread Level: 7

Yup.

Author: Trucker2 (1573 Posts - Original UHND Member)

Posted at 4:50 pm on Mar 18, 2009
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I did a typo and didn't catch it.

Woe is me. :^(

:^) :^)


Thread Level: 3

They were necessary to unwind the instruments that got them into the mess.

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 1:51 pm on Mar 18, 2009
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I hate to say it, but it was needed.

Furthermore, AIG has already lost a TON of excellent talent due to this mess.

And NDFaninNJ is correct, generally any one-time payments are now called bonuses.


Thread Level: 3

Because that has become the terminology for any one-time lump sum payment.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 1:32 pm on Mar 18, 2009
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And as someone who spends all of my time working with bankrupt and struggling companies, I can tell you that the "they're the ones that got us here" argument is meaningless when you are staring at a bunch of people threatening to leave that (a) you need to fix or winddown the business and (b) you can't replace because talented people generally don't board sinking ships.

I've seen executives that would otherwise have been shitcanned get handsome payouts simply because they were irreplaceable. The reality is that sometimes the wrong guy has you over a barrel and you just need to do what he says. It sucks, but it's reality, something Washington, DC is not familiar with.


I'm only here because my firewall blocks Valhamma.
Thread Level: 4

I'm sorry, I don't think anyone is irreplaceable. Including entire corporations.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 1:55 pm on Mar 18, 2009
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The people who allowed for this payout should be held accountable - essentially everyone who signed off on this bill.

Thread Level: 5

Don't misinterpret what I'm saying. AIG should have been allowed to fail.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 2:04 pm on Mar 18, 2009
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Having decided against that, you have to live with the decision to not get the benefits of a bankruptcy (i.e. rejection of contracts). Bankruptcy is a great wealth preservation tool. Instead, we have spent $170 billion propping up a company that at its peak had a (stupidly high) market cap of $200 billion.

I'm only here because my firewall blocks Valhamma.
Thread Level: 5

That's all well and good we don't live in a utopia.

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 2:00 pm on Mar 18, 2009
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$165 million is dwarfed by the potential losses that could have happened in this unit if these people left. Like it or not, these guys were a necessary evil for the time being. I'd rather pay the $165 million than have AIG take a hit of $10 billion from continued losses from structured products.

Thread Level: 6

The provision that allowed for these payouts was very specific in the bill.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 2:14 pm on Mar 18, 2009
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And added at some point during a closed-door committee of ten congressmen. I'm not arguing the necessity of a bailout - I'm arguing the insertion of this specific provision.

Thread Level: 7

They were payable anyway. They were agreed to in 2007.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 2:16 pm on Mar 18, 2009
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(no message)

I'm only here because my firewall blocks Valhamma.
Thread Level: 8

No, they weren't. The agreement was made in 2008 that folks would get as much as those in 2007.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 2:34 pm on Mar 18, 2009
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And the agreement in 2009, after the government takeover and at issue with taxpayers today, was that these employees would be guaranteed yet again this bonus.

Oh, and look! Those 2007 bonuses were agreed to and paid juuuuust before AIG collapsed under the weight of it's own incompetent and unethical leadership.


Thread Level: 9

This populist bullshit is a spectacle created to distract people from the real problems.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 2:41 pm on Mar 18, 2009
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We are talking about a company that has sucked up $170 billion dollars of taxpayer money so far and all anyone wants to talk about is $170 million in compensation.

We've probably spent as much funding the circus surrounding these "bonuses" as the bonuses cost themselves, between congressional time, news media time and legal fees to be accrued.

But let's all focus on the nonsense and not the fact that we have wildly overpaid for this really shitty investment.


I'm only here because my firewall blocks Valhamma.
Thread Level: 10

I think it highlights the real problem.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 2:59 pm on Mar 18, 2009
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Our government, thru congress, is incapable of dealing with these issues.

Thread Level: 8

Exactly

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 2:22 pm on Mar 18, 2009
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(no message)

Thread Level: 2

I'm not a BHO fan but I don't think this one is his fault...

Author: Frank L (45905 Posts - Joined: Sep 20, 2007)

Posted at 12:56 pm on Mar 18, 2009
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now the feigned teleprompter induced outrage, that's another story. This guy is looking more clueless by the day. Good thing for him most of the media is still in the bag but even the faithful seem to be getting restless.

Thread Level: 2

I think people think there should've been an exception, given that their cash came from the bailout.

Author: jakers (9587 Posts - Original UHND Member)

Posted at 11:51 am on Mar 18, 2009
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Had we simply allowed them to go bankrupt, it would've nullified the bonus contracts (along with all other wage contracts), and they wouldn't have had to pay it.

However, the government gave them bailout cash, so there wasn't really any legal way to avoid paying their contractual wages.


Thread Level: 3

Agreed. We gave them bailout money specifically for obligations like these.

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 12:23 pm on Mar 18, 2009
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(no message)

Thread Level: 2

Agree.

Author: jabbadoody5 (16656 Posts - Original UHND Member)

Posted at 11:50 am on Mar 18, 2009
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My problem is that we gave AIG money in the first place. They are bailing out a sinking ship. At the very least give it to a financial institute that has taken care of their business and part AIG out to them. Reward the executives that made good decisions, not the idiots who did not.

This situation gets worse now that we have government officials talking about taxing theses bonus from 90% to 100%.


Jumbotrons are for big dick playas!
Thread Level: 3

That's the real issue - stop succumbing to fear of what might happen and let these losers fail.

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 12:02 pm on Mar 18, 2009
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(no message)

If you support Obama you are a racist.
Thread Level: 2

Because they can

Author: Fisher01 (6093 Posts - Original UHND Member)

Posted at 11:44 am on Mar 18, 2009
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AIG has an untenable business model, so any way we cut we'll be throwing money away.

We should not be giving them any money, period. However, the government is terrified of their beloved housing market tanking, which would drag several major banks, not to mention the GSE's down with it.

Also, Freddie Mac has came out today, and revealed that they will need 30 billion to make it through the next year. Enron's market capitalization at its peak was 30 billion. Yet there is no investigation into what frauds led to a corporation being able to leverage itself 68-1.


Thread Level: 2

Based on article below - looks contractual + Feds knew about them last year. Retention bonuses - hah

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 11:31 am on Mar 18, 2009
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(no message)

This message has been edited 1 time(s).

If you support Obama you are a racist.
Thread Level: 2

Agree. I can't wait to see if Barry and co. attempt to tax their bonuses 95%....

Author: Domer From Hell (11565 Posts - Original UHND Member)

Posted at 11:30 am on Mar 18, 2009
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This is going to get interesting.

We're all born bald baby!
Thread Level: 3

This is hardly a partisan fight.

Author: LanceHarbor (13363 Posts - Original UHND Member)

Posted at 11:33 am on Mar 18, 2009
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Both sides seem to be equally (and, in my opinion, wrongly) pissed.

Thread Level: 4

It's absolutely a partisan fight....

Author: Domer From Hell (11565 Posts - Original UHND Member)

Posted at 12:20 pm on Mar 18, 2009
View Single

at least that's what it has turned into.

We're all born bald baby!
Thread Level: 4

delete

Author: Domer From Hell (11565 Posts - Original UHND Member)

Posted at 12:20 pm on Mar 18, 2009
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(no message)

This message has been edited 1 time(s).

We're all born bald baby!
Thread Level: 3

Equal protection suit waiting to happen, as well as ex postfacto legislation (money earned in 08

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 11:32 am on Mar 18, 2009
View Single

but paid in 09) - should not happen.

If you support Obama you are a racist.
Thread Level: 4

Lance, you should know that's not a standard.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 11:46 am on Mar 18, 2009
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The government isn't allowed to make ex post facto crimes. However, they change tax law mid-stream all the time.

And I don't think wealthy banker is a protected class under the 14th Amendment. Rational basis test, my man. If they tax them, they will pay (which is bullshit, by the way).


I'm only here because my firewall blocks Valhamma.
Thread Level: 5

Why is that bull shit?

Author: SouthPhillyDirtbag (808 Posts - Original UHND Member)

Posted at 11:53 am on Mar 18, 2009
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A new tax law that says something like "if your company took $170B from the government to keep the lights on and make payroll, then your bonus is taxed at 100%" seems reasonable to me.

The Treasury Dept bears a lot of the blame here. But, seriously, how ridiculous have these Wall St firms behaved as far as compensation over the last 12 months? How did the Treasury and AIG both not see this coming and try to mitigate against this months ago? What a waste of time and energy this is.


Thread Level: 6

Because, if the government wanted to avoid this, they should have done some due diligence...

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 12:11 pm on Mar 18, 2009
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before investing a quarter of a trillion dollars in the company. Like my clients would if they were going to invest a quarter of a million into something. Read the fucking contracts, assholes.

I'm only here because my firewall blocks Valhamma.
Thread Level: 7

If the government can legally get this money (ie rewrite 2008 tax law), they should do it

Author: SouthPhillyDirtbag (808 Posts - Original UHND Member)

Posted at 12:41 pm on Mar 18, 2009
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Yeah, the govt f'd this up, but they can still correct this mistake without damaging the sanctity of a contract. Who wouldn't agree that this is a ridiculous extenuating circumstance?

Thread Level: 8

It doesn't sound like the government effed up. They specifically provided for these bonuses.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 1:19 pm on Mar 18, 2009
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The media should do it's job and find out who knew what and when. Then the American people should do their job and remove the idiots from office who enable this provision - either thru impeachment, forced resignation, or choosing to vote for someone else.

Thread Level: 9

There should be something stating that after date X, not another bailout penny will be handed out

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 1:30 pm on Mar 18, 2009
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The open line of credit from ma and pa taxpayer has to stop at some point.

If you support Obama you are a racist.
Thread Level: 10

I thought you were against a timeline for withdrawl

Author: SouthPhillyDirtbag (808 Posts - Original UHND Member)

Posted at 1:48 pm on Mar 18, 2009
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Kidding.

Thread Level: 11

I actually thought the same thing. Funny.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 2:04 pm on Mar 18, 2009
View Single

(no message)

I'm only here because my firewall blocks Valhamma.
Thread Level: 10

Oh sure. But these are the people in charge - and we the people put them there.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 1:37 pm on Mar 18, 2009
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Instead of being outraged, we should be blaming ourselves for electing these idiots.

Thread Level: 11

I the people didn't vote in this turd, and really if someone had said the blank check would continue

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 2:04 pm on Mar 18, 2009
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indefinitely, I think most people would have had second thoughts about any candidate endorsing it.

If you support Obama you are a racist.
Thread Level: 11

What would you need to hear to be convinced that the AIG bailout is worth it?

Author: SouthPhillyDirtbag (808 Posts - Original UHND Member)

Posted at 1:47 pm on Mar 18, 2009
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That's a serious question. I don't think the Fed/Bush/Obama has made a compelling case for why we need to spend to spend 3x more on AIG than we do on the Homeland Security Dept (got that stat from Chuck Todd this morning).

How much unemployment is tolerable? How much asset value loss is tolerable?

I think the reach and intricacies of these financial instruments is way over most people's head (definitely over mine). From what I can gather, it's not as simple as let them fail and the market will flush itself out.


Thread Level: 12

That's not my point here.

Author: Lady_Irish_27 (3454 Posts - Original UHND Member)

Posted at 2:08 pm on Mar 18, 2009
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I'm not arguing the necessity of a bailout in general.

I'm talking about the provision added to the stimulus bill during closed-door negotiations that specifically allowed for these payments - very specific language apparently added/altered during the reconciliation process by ten congressmen behind closed doors.


Link: This is likely the only time I will link Kos.

Thread Level: 8

Me. This is how AIG compensates its employees. That's why we gave them money. To pay bills.

Author: NDFaninNJ (10056 Posts - Original UHND Member)

Posted at 12:58 pm on Mar 18, 2009
View Single

(no message)

I'm only here because my firewall blocks Valhamma.
Thread Level: 5

Well, those guys have about 80 mil to figure out how to successfully defend the tax, if imposed

Author: TontoGoldstein (11011 Posts - Original UHND Member)

Posted at 11:49 am on Mar 18, 2009
View Single

(no message)

If you support Obama you are a racist.
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