Love,
BytheSea

Problem is that it isn't just AIG. Look at all of the large corporations and try hard to find a company where the exec's are penalized for poor performance and awarded for good performance. Today Google announced that they will be getting rid of 10,000 people. My bet is that upper management won't take a pay cut even though the company is struggling.

@exconsumer9: Read bonxombiekitty's post -- the posts you see on here are the very reason AIG doesn't come upfront with these things.

Despite what you guys may thank, AIG is OVERALL in good hands. They didn't get to be the world's biggest insurance company for no reason. I think they all know better than any of us how to run an insurance company. This, aside from the boneheads who didn't have the foresight to see that insuring the mortgages was a bad idea.

The public in general isn't going to understand if they try to explain that they're funding their profitable company parts and making sure that the people who make them money are staying with AIG and not going elsewhere. The momen you mention big spending with AIG management, it's a knee jerk "OMGWTFBBQ!!11!" because of it being tax funded.

If the people won't listen it doesn't particularly pay to explain it to them.

@SadSam: Because even if they are profitable, that doesn't necessarily mean they can single handedly correct all the damage done by the guys who are indeed boneheads in the division that messed things up with the mortgage insurances.

For example, let's just say that you're five years old and you have a lemonade stand. You're making $20 a day. This is GREAT for a lemonade stand. But then a tornado comes by and tears your house down. Your $20 a day, while comparatively good, isn't going to fix your ruined house.

It's not the best analogy, but I think it gets my idea across; basically, these divisions are indeed incredibly profitable in the world of insurance, but they're still not enough to cover the costs of the complete collapse of the housing market.

And yes, the guys who were in charge of that part are boneheads, and I'm gonna be pissed if they get a bonus or anything.

Between the $500k executive retreats, spa treatments, retention bonuses, etc. that have happened post-government bailout, nothing these slimeballs do surprise me anymore. They're trying to pull new crap every friggen month now!

@XianZhuXuande: Yes if I remember right the politicians were outraged that $700 billion of taxpayers money was going to bail out these evil money grubbing companys. They said it was too much, think of the poor taxpayers, we can't do this to them! But once they were able to add an extra $150 billion in pork it was suddenly affordable. Look kids it's voodo economics at it's finest!

"If AIG can do it, so can we." will be the new Mantra.

The execs should receive a bonus. A severence bonus. Give them cab fare and tell them thanks for tanking most of the company!

@bonzombiekitty:

Sounds reasonable, but if AIG has divisions that are doing well and turning a tidy profit (enough so they want to hand out retention bonuses to the non bone heads running those divisions to the tune of $3 million) why are they not using profit from those divisions to prop up the non-profitable divisions? Why do they need tax payer bail out if they've got profit available for bonuses?

@plamoni: it depends on what the meaning of the word, "word", is.

Hmm you'd think they'd want to keep people that used the cards daily and provided them with a pretty steady stream of revenue, rather than people that run up their cards and then declare bankruptcy...oh well. Guess I'll have to live with my suntrust card with 8.9 interest.

Your job, according to the people who run our country, is to "move along, citizen". There's nothing to see here; just elites looking out for each other.

That's by design.

Where have you been?

@Saboth: They are tightening up and shedding customers who won't drink the high interest cool-aid...ie those who manage their money well.

Jeez, I hate to feel this way but it just seems like some guy who lost his whole life savings b/c of all this just needs to go postal before these execs might get their heads out of their @sses. It's like the auto execs, you could've flown first class and no one would've probably said anything.

Hmm...seems to be that he didn't vote for the bailout either time.

Hmm...

Yes, I'm still proud he voted against it twice.

@Erwos: Who works for only 200k unless he can do his job, according to the OP "$200,000 pay [Total including bonuses and compensation] until you guys get back into profitability."

Make the company profitable and you can have whatever you want, because you'll have paid back the loan and the American taxpayer no longer has a vested interested in executive compensation. Seems like a fair deal to me.

@morganlh85: Because making products to sell to make money is so old school and dirty versus moving "paper" around to make money. Remember we are dealing with a different class of people who only know how to move "paper" both the politicians and the financial guys/gals versus people who manufacture items for profit.

Most politicians come from being lawyers or high level executives versus running manufacturing plant floors. If I remember it correctly Bill Frist was/is the only doctor in high level government...

@startertan: Just don't vote Democrat or Republican and you will see some real change...

But the media doesn't want you to know this since they are funded by advertising by the same businesses which fund those two political parties...

@Meltdown:

The gambit is presented thus:

Will you get more for selling XYZ division of AIG with - or without - the presence of XYZ's managing director? You won't. So the rest is just a judgement as the executive assesses his or her value in the sale and demands a ransom to stick around in the meantime.

"We didn't pay bonuses with taxpayer dollars, we did it with funds from our employee retirement accounts! And we paid those funds back! (*cough* with taxpayer dollars *cough*).

But I guess redefining the word "bonus" works, too.

What's funny is I got my Christmas bonus this year. It was the same as last year, despite my company doing an extra 4 million in profit this year. We all busted our asses for that 4 million too. Anyhow, out of a 1,000 bonus, Uncle Sam's cut? About 40% of it. Gee, Uncle Sam, I don't remember you being at work until 8pm after hours every other night and coming in early and skipping lunches to meet deadlines! Oh hey, thanks for taking that tax money and giving it to AIG executives!

That way auto industry will have to behave, since it would know, that the government can always take back the money.

If those bonuses were legit, AIG wouldn't hide behind words.

It would be acceptable, only if an average taxpayer would receive similar bonuses on the work. But 3 millions? That's insane.

I still think, that this company should have been left to sink.

@ADismalScience: Actually... they already have entered production and are filling orders. It's not a lot, and they just asked for more cash to help keep them going, but they are serious about producing cars.

I think you underestimate how much capital it takes to start an auto company. That's why they're only making one super-performance vehicle right now. They'd hemorage money if they tried to compete with the civic.

@Erwos: There's a big difference here. We're not hiring AIG to perform a task for us. We OWN AIG. And you know what? Maybe we do want most of the execs to jump ship. Bring in a CEO who specializes in cutting costs and righting sinking ships.

@WiglyWorm:

Personally, I'd like to flip the bird to the "Big 3" and give their $25 bnillion to companies like Tesla and other companies that have had the vision to produce the cars we're going to be using in the future.

You realize that Tesla epitomizes the kind of no-profit, false, fake bullshit company that caused the 2000-2002 market collapse? Their whole business model was constructed on getting venture capitalists and wealthy friends to give them cash to burn, not on building cars. I guarantee they will never fill the orders they've taken for those damn cars.

Your American congress was in on it the whole time. They knew what was going to happen when they gave the bailout money. Are we forgetting all those smaller bills your congressmen tacked on to the bailout for thier own self serving greedy purposes? Your whole government is corrupt. Everything they tell you is lies used to placate the people so you all dont go nuts and revolt against what is really going on.

@Oranges w/ Cheese: True, but some oversight is better than none. There would still be issues but you can rest assured that no politician would have authorized dollars for renamed bonuses designed to keep the Captain at the helm of the Titanic.

As far as the auto makers go, we have a tough choice there. Yeah they do have a lot of overhead that hurts them, and maybe bankrupcy would be the best solution. But bankrupcy tends to hurt consumer confidence. Who's going to buy a care from the big 3 if they're bankrupt?

Personally, I'd like to flip the bird to the "Big 3" and give their $25 bnillion to companies like Tesla and other companies that have had the vision to produce the cars we're going to be using in the future.

Now, I'm all for stopping bonuses and getting rid of executives. But it has to be for those that are responsible for the current mess. When you start dealing with the people who are not responsible for the current mess, a pragmatic approach needs to be taken. Don't demand that AIG cut off its nose to spite its face.

AIG's retirement services group is very profitable - yes, even still - so it's appropriate for that guy to get paid. The firm is being sold off in chunks, and loss of top leadership will make an already-difficult process impossible.

That said, that doesn't give the guys running the successful divisions of AIG the right to extort taxpayers. But since these guys are the IP behind a lot of the more successful subsidiaries/divisions that AIG is charged with selling off, they can demand payment to stay. It's indefensible, ethically, but then again these guys have all the leverage - to a man, they could walk away tomorrow and work just about anywhere else or simply sit on the largesse of years past.

AIG didn't lose all it's money because all of the parts of the business performed poorly. They have high performing parts of the business, decently performing parts of the business, and more or less one part of the business that was an abysmal failure. The latter was so bad that it dealt a huge blow to the company.

In order to recover from that blow, the WORST thing to do is to allow the people that are making the company money go elsewhere.

At that sort of executive level, people can fairly easily move to another company, especially if they perform well. Simply keeping their job isn't much of an incentive to stay at the company. Retention bonuses such as these are a part of business.

*** disclaimer **

I am not a Walmart customer and do not officially condone stomping.

Not necessarily. Remember, AIG is made up of several branches, most of which are profitable. To my knowledge, there was one particular branch of the company that is the root cause of the company's financial woes. That one branch lost AIG a crapton of money. So the "bone headedness" is not a problem throughout AIG, the problem is with the branch of the company that caused the problems and all the executives above it that allowed it to happen.

As an example in the OP, the retirement service chief is getting a retention bonus. Is retirement services a profitable part of the company? Does the guy do his job well? If yes (and I don't know the answer to those questions), then it's unfair to label the guy as a bone head just because he happens to be an executive with AIG.

Of course none of the congress members are going anywhere over this, people will just piss and moan about it for awhile and then not do anything.

I think its time to move to Antarctica.

Once again, we're not differentiating between the profitable units and the unprofitable units of AIG. These bonuses are to keep good people who are running good units. So it's somewhat justifiable.

But frankly, even I don't think it's a good idea. At the most, they should offer them deferred bonuses, payable if and when their units get sold or the company as a whole returns to profit. So you offer the carrot if you need to, keep the good people in place, but don't blow more cash on these bonuses until they finish their jobs and things stabilize.

"The plan unveiled by New York-based AIG includes no 2008 annual bonuses and no salary increases through 2009 for AIG's top seven officer leadership group and no salary increases through 2009 for the 50 next highest paid executives, in addition to other bonuses, severance and retention award restrictions.

The insurer is also developing a funding structure to ensure that no taxpayer dollars are used for annual bonus or future cash performance awards as part of AIG's "Senior Partners," the top 60 members of management."

From:

[www.ifawebnews.com]

I get why they don't want tons of turnover, but is anyone really dying to give high-paying executive jobs to these bozos? Is it necessary to make sure they aren't lured away?

House: [www.diggersrealm.com]

@G99: I'll do you one better: Congress should hold on to the money for them. They have to come and justify every single dollar before a congressional panel if they want it.

Cutting Pay and Firing responsible parties - Great
Cutting Pay and Keeping responsible parties - okay
Increasing Pay and Firing responsible parties - okay
Increasing Pay and Keeping responsible parties - Stupidly Bad.

That's what you get when the people who run the company also decide how much money they should give themselves.

These are highly knowledgable people that are in demand. AIG biggest asset on the insurance side of the house is it's people. If they lose the people, their ability to tell a good deal from a bad one diminishes. Skilled positions aren't easily replaced by anyone, especially when the company's future is in question.

Isn't that like shooting yourself in the foot then paying the doctor to NOT remove the bullet and let your foot go all gangreeny and fall off?

Or, if there *is* oversight, it isn't being utilized at all.

@The Name's Ash78, Housewares: Maybe these executives needed some anal rententiveness about how they conducted business!

"You f-ed around too much with our money. From now on you will no longer get a single dollar from us unless you either fire the entire executive staff or place the current executive staff on a government pay scale with a maximum of $200,000 pay [Total including bonuses and compensation] until you guys get back into profitability."

A little more annual retentiveness is exactly what this company needs. Turnover would probably just make things worse.

Of course, its standard operating procedure to give out retention bonuses when a company is floundering so that the smart leadership sticks around to lead the company back to profits. In this case, you are paying the same bone heads retention bonuses who swamped the ship in the first place. And if these executives want to jump ship where the heck are they going to go??? Its not like there are a ton of other financial services jobs for overpaid failures out there.

LOL.
How many of us called this one?