AIG to pay $165 million in bonuses

[puddlemonkey]

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.

Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.

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.

 

[calveless wonder]

money for doing nothing

sound familiar?

 

[puddlemonkey]

money for doing nothing

sound familiar?

Sure does, except the tax payers aren't signing off on my paycheck.

 

[ortiz34]

the writer probably "forgot or didn't mention" that it was a entire different entity than the finacial division of AIG

Just like when the insurance company AIG went on vacation and everyone was up in arms not knowing that the insurance company is entirely separate from the financial company.

I am imagining this is more of the same, the writer never mentions it, and it gets teh dumb sheeple like above to bitch about it.

 

[ortiz34]

regardless even if it was the financial aig company, not one of their others

165 million is nothing to thousands and thousands of people.

 

[75th]

the writer probably "forgot or didn't mention" that it was a entire different entity than the finacial division of AIG

Just like when the insurance company AIG went on vacation and everyone was up in arms not knowing that the insurance company is entirely separate from the financial company.

I am imagining this is more of the same, the writer never mentions it, and it gets teh dumb sheeple like above to bitch about it.

Yup.

 

[needtogetarmy]

I hate articles like this. I know a trader at one of the big institutions that works for a team that makes upwards of $100 million a year (collectively they make this much). He says that they have been doing just as well during the meltdown and that they are one of the few profitable units in the division.

Take away their bonuses, which is what they work for, and you destroy their incentive to make money. He says if they fuck with his pay he is leaving for a another firm, and the rest of the unit is going with him. That destroys one of the few profitable units in the corporation, thus the institution loses a shitload of money.

I believe it was Citi when Sandy Weill took over that hammered their proprietary trading unit. They left went out and formed hedge funds.

Americans are stupid.

 

[needtogetarmy]

Just to continue my rant: if professionals like myself and 75th who have worked (or work) actively in this industry are forced to cut they pay because the government tells them too they will leave the firm. Who the fuck wouldn't? Thus, you get a huge exodus of talent from these firms, at a point in time when they need that talent the most. How the hell does this contribute to the long term economic well being of these firms?

Bill the Boss: Mr Smith, you've earned your clients $50 million last year because you managed their money effectively. But, Obama says I cannot give you a bonus so enjoy your $250,000 dollar salary.

Mr. Smith the trader: Fuck you Bill. I am leaving and forming my own firm and I will take home what I deserve.

Bill the Boss: I understand Mr. Smith. I'm coming with you. The janitor can run this place when we leave.

^^ this is happening right now in corporate America. In fact, during the last MBA meeting we had the stats showed that an increasingly large percentage of MBA grads at the top institutions are leaving the US and getting jobs overseas because there are more opportunities available overseas.

Every act has a consequence.

 

[Razorguns]

If a division is making profits - everyone in that division should be getting bonuses. That's how it works in the rest of corporate america. Not just the executives.

An "AIG Division disperses $165M in profits" sounds a lot better. But hell now, once again, suits make the money while the employees get dick.

I'm sure Obama will NOT stand for this! HAHAHAHAHAHAHA. Who am I fucking kidding right? lol.

r

 

[Dial_tone]

the writer probably "forgot or didn't mention" that it was a entire different entity than the finacial division of AIG

Well....

In a letter to Geithner, obtained Saturday by CNN, AIG Chairman and CEO Edward Liddy said his company was taking steps to limit compensation in AIG Financial Products -- the British-based unit responsible for issuing the risky credit default swaps that have brought the company to the brink of collapse. The default swaps amount to insurance against losses from bad loans, which have increased dramatically since the U.S. housing boom peaked.

http://www.cnn.com/2009/US/03/15/AIG.bonuses/index.html