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TexasBred

Well-known member
Insurance giant paying out $165 million in bonuses

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.

Liddy said in his letter that "quite frankly, AIG's hands are tied"
although he said that in light of the company's current situation he found it "distasteful and difficult" to recommend going forward with the payments.

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.
The company says in the paper it will work to reduce the amounts paid for
2009 and believes it can trim those payments by at least 30 percent.

Bonus programs at financial companies have come under harsh scrutiny after the government began loaning them billions of dollars to keep the institutions afloat. AIG is the largest recipient of government support in the current financial crisis.

AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives.
Liddy and six other executives have agreed to forgo bonuses.

The group of top executives getting bonuses will receive half of the $9.6 million now, with the average payment around $112,000.

This group will get another 25 percent on July 14 and the final 25 percent on September 15. But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.

The Obama administration has vowed to put in place reforms in the $700 billion financial rescue program in an effort to deal with growing public anger over how the program was operated during the Bush administration.

That anger has focused in part on payouts of millions of dollars in bonuses by financial firms getting taxpayer support.

In his letter, Liddy told Geithner, "We believe there will be considerably greater flexibility to reduce contractual payments in respect of 2009 and AIG intends to use its best efforts to do so."

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.
 

Mike

Well-known member
I think if he's so worried about U.S. taxpayer money, why is he giving Hamas $900 million?

This is nothing but a dog-and-pony show designed to make Zer0 look like Robin Hood.
 

TSR

Well-known member
TexasBred said:
Insurance giant paying out $165 million in bonuses

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.

Liddy said in his letter that "quite frankly, AIG's hands are tied"
although he said that in light of the company's current situation he found it "distasteful and difficult" to recommend going forward with the payments.

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.
The company says in the paper it will work to reduce the amounts paid for
2009 and believes it can trim those payments by at least 30 percent.

Bonus programs at financial companies have come under harsh scrutiny after the government began loaning them billions of dollars to keep the institutions afloat. AIG is the largest recipient of government support in the current financial crisis.

AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives.
Liddy and six other executives have agreed to forgo bonuses.

The group of top executives getting bonuses will receive half of the $9.6 million now, with the average payment around $112,000.

This group will get another 25 percent on July 14 and the final 25 percent on September 15. But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.

The Obama administration has vowed to put in place reforms in the $700 billion financial rescue program in an effort to deal with growing public anger over how the program was operated during the Bush administration.

That anger has focused in part on payouts of millions of dollars in bonuses by financial firms getting taxpayer support.

In his letter, Liddy told Geithner, "We believe there will be considerably greater flexibility to reduce contractual payments in respect of 2009 and AIG intends to use its best efforts to do so."

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.

With respect to the last paragraph,was it not this best and brightest group that helped get AIG in financial trouble. :( I guess these exec's don't realize where their bonus money is coming from. Think about all the people that are drawing unemployment insurance and the average workers who didn't get a raise this yr and this guy is trying to justify bonuses paid for by the taxpayers??? There is a way to get around these bonuses but nobody is probably looking very hard.
 

TexasBred

Well-known member
But....GM, Ford and Chrysler have thousands basically drawing "more than they are worth" due to nothing more than a "contract". These contracts were in force long before gov't intervention. If you're not going to fire them for non performance then you have to honor the contract....you can't have it both ways. AND the money was given "without strings attached". Then "Senator Obama" rubber stamped it I assume or did he vote "present".
 

Mike

Well-known member
With respect to the last paragraph,was it not this best and brightest group that helped get AIG in financial trouble. I guess these exec's don't realize where their bonus money is coming from. Think about all the people that are drawing unemployment insurance and the average workers who didn't get a raise this yr and this guy is trying to justify bonuses paid for by the taxpayers??? There is a way to get around these bonuses but nobody is probably looking very hard.

Why wasn't the bonuses held up a few weeks ago when Geithner gave them more money? :roll: :roll: :roll:

Like Forrest Gump said........."stupid is as stupid does". :lol: :lol: :lol:

WE TOLD YOU SO!!!!!!!!!!!!!!!!!!!!!!!!
 

TexasBred

Well-known member
What is a retention bonus??

Mergers, downsizing and reorganization all can wreak havoc with operations. To make transitions run smoothly, companies increasingly turn to retention bonuses, or "stay pay," to entice employees to remain through the rough patches.

The number of companies offering retention bonuses has increased to 43 percent in 1997 from 14 percent in 1995, according to a recent nationwide study by Coopers & Lybrand L.L.P., a human resources advisory group based in New York.

Retention bonuses are becoming more common in the corporate landscape, explains Carl Weinberg, a principal with Coopers & Lybrand, because companies are going through more transitions. They need to give key people an attractive incentive to stay on through the transition to ensure productivity, particularly with a liquid labor market today in which individuals can easily move on.
 
A

Anonymous

Guest
Mike said:
I think if he's so worried about U.S. taxpayer money, why is he giving Hamas $900 million?

This is nothing but a dog-and-pony show designed to make Zer0 look like Robin Hood.

How much money does Isreal receive in aid and forgiven loans. I searched and could not find much as to the amount. Seems that it is always hidden. Looks to be in the billions. Would they still be our friend if it was cut off.
 

TexasBred

Well-known member
hurleyjd said:
Mike said:
I think if he's so worried about U.S. taxpayer money, why is he giving Hamas $900 million?

This is nothing but a dog-and-pony show designed to make Zer0 look like Robin Hood.

How much money does Isreal receive in aid and forgiven loans. I searched and could not find much as to the amount. Seems that it is always hidden. Looks to be in the billions. Would they still be our friend if it was cut off.

Israel is a country. Hamas a terrorist organization.

BUT: CAIRO -- In the three decades since 1975, when the United States began its foreign assistance to Egypt, the most populous Arab country has made enormous progress. While its population rose from about 40 million to more than 70 million, incomes also rose and the standard of living has greatly improved.

At the 30th anniversary celebration of the U.S. aid program last year, the aid given totaled $28 billion, by far the largest amount of development aid given to any country in the world by the United States.
 

TSR

Well-known member
TexasBred said:
What is a retention bonus??

Mergers, downsizing and reorganization all can wreak havoc with operations. To make transitions run smoothly, companies increasingly turn to retention bonuses, or "stay pay," to entice employees to remain through the rough patches.

The number of companies offering retention bonuses has increased to 43 percent in 1997 from 14 percent in 1995, according to a recent nationwide study by Coopers & Lybrand L.L.P., a human resources advisory group based in New York.

Retention bonuses are becoming more common in the corporate landscape, explains Carl Weinberg, a principal with Coopers & Lybrand, because companies are going through more transitions. They need to give key people an attractive incentive to stay on through the transition to ensure productivity, particularly with a liquid labor market today in which individuals can easily move on.

Exactly what I would expect a corporate exec to say. If they could easily move on to a better job/position fine, let them. When everyone turns them down for bonuses, maybe they will do like stocks and find their actual worth which might be a decent salary minus the perks to which they have become accustomed. Of course this probably ain't gonna happen but we'll see I guess.
 

TexasBred

Well-known member
TSR most of the people getting these bonus's are "on the way out". That's why they got the bonus to begin with....for work done during an interim period...... They did their job. I believe there are eleven of them already gone. They were not performance bonus'.

And..."a contract IS a contract". Now I'm hearing Shumar wants to write a new tax law to tax them 100% on any bonus received. "Equal justice under the law"?? BS
 
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