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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.

It's my understanding it's due to some IRS regulation[s], and is designed to lessen the tax impact.

Stick to fearmongering about Muslims.

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I did a typo and didn't catch it.

Woe is me. :^(

:^) :^)

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.

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.

The people who allowed for this payout should be held accountable - essentially everyone who signed off on this bill.

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.

$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.

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.

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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.

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.

Our government, thru congress, is incapable of dealing with these issues.

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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.

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.

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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%.

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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.

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This is going to get interesting.

Both sides seem to be equally (and, in my opinion, wrongly) pissed.

at least that's what it has turned into.

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but paid in 09) - should not happen.

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).

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.

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.

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?

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.

The open line of credit from ma and pa taxpayer has to stop at some point.

Kidding.

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Instead of being outraged, we should be blaming ourselves for electing these idiots.

indefinitely, I think most people would have had second thoughts about any candidate endorsing it.

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.

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.

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