Bailout Money to Pay Executive Bonuses?
I admit it! I don’t get it! I don’t understand the whole financial industry.
Seriously. I don’t understand a business contract being written that guarantees huge bonuses every year, even IF the company loses so much money that it needs the government to bail it out financially, on the backs of the taxpayers for 2 or more generations to come!!!
How do these people sleep at night? How do they look themselves in the mirror?
By MARTIN CRUTSINGER, AP Economics Writer Martin Crutsinger, Ap Economics Writer – 38 mins ago
WASHINGTON – American International Group is giving its executives tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.
AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.
The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.
What company pays huge bonuses after suffering a $61.7 BILLION loss? Better yet, WHAT legal eagle writes a contract guaranteeing said bonus no matter how poor the business decisions made were? And what company in their right mind would even agree to this? Is it just the financial industry that is this convoluted? AIG so far has already received $170 BILLION of taxpayers’ money!!!
Can you imagine telling your bank that you need a loan to keep you afloat, and then spending it lavishly on a vacation in some super expensive resort for a month? Can you imagine telling your boss that you don’t care IF they are about to lose their business you still demand your yearly raise and bonus?
This official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG’s current bonus structure.
Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said.
In a letter to Geithner dated Saturday, Liddy informed Treasury that outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.
It’s lawyers like these that make all lawyers look bad. I wonder how they managed to get AIG to guarantee these bonuses no matter if business was about to fold.
Liddy said the company had entered into the bonus agreements in early 2008 before AIG got into severe financial straits and was forced to obtain a government bailout last fall.
The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.
A white paper prepared by the company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded “retention pay” to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.
Just to add insult to injury these bonuses are going to the same people who actually manufactured this disaster? They are being rewarded for bankrupting the company? I’m sorry, the logic here escapes me. I’m just a simple taxpayer who works her butt off just to meet basic living expenses. I live within my means. I take responsibility for my choices, good and bad. AND if I make the wrong decisions, I am the one who pays for it, there is NO bailout for me.
But he also told Geithner that he felt it could be harmful to the company if the government continued to press for reductions in executive compensation.
“We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” Liddy said.
OK, seriously, WHAT planet are these people from? The only way to attract and retain the best and brightest is guaranteeing them all the money they want even if they bring the company to the brink of disaster? WHAT other company does that? More insulting is that they are offended that the government wants to restrict their bonuses after feeding it all that taxpayer money?
Personally, considering the mess these people put AIG in, if they are best and the brightest then AIG might want to re-think its hiring practices also.
I’m about to join the millions of already “laid off” unemployed taxpayers, so excuse me if I feel NO PITY for these greedy brats! All of us, our children, grandchildren and great-children are going to be paying off this money and they want OUR sympathy and understanding? I don’t think so!
Just for the record, I feel this way about any and all hugely obscene bonuses, especially for executives in companies that are in trouble and laying off it’s lower-level employees. It is absolutely disgusting!!!
You can read the FULL STORY here, I just can’t wrap my brain around the arrogance and audacity of AIG and the rest of the Wall Street crowd.
Someone explain to me WHY our economy, our very lives basically, are dependent upon and ruled by these cretins? AND WHY ARE THEY BEING REWARDED FOR POOR SHODDY WORK?