The AIG Bonuses: A Welcome Scandal

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soundtracks of AL 6:36AM July 17, 2009

Isn't the real value of AIG's bonus scandal - to AIG, to Congress, to the Obama administration, particularly Mr. Geithner - that it has created a convenient smokescreen and diversion of public attention away from the tracking of the fate of the other 99.983% of the bailout money received by AIG?
Why should Europe's banks come out whole on the value of their assets insured with a fundamentally bankrupt insurer? And why should this happen at U.S. taxpayer expense? Will BAC, Citi and other major U.S. banks weather this crisis as unscathed?

taxpayer2009 of LA 11:49AM March 23, 2009

Establish total CEO executive compensation (salary, bonus, stock options etc.) based on the ratio of 40 to 50 times the compensation of the average non executive worker in the company. The ratio alleged to have existed a few decades ago. If these execs want more money they have to compensate their average workers more. To do this the company has to be more successful hence the stockholders win as well. Tax any exec compensation above the ratio at 90%. This should become tax law and get rid of the contracted payments and good ole boy corporate board voted compensations. Lower level execs would receive compensation based on some lesser ratio.

Bill of CO 12:02AM March 22, 2009

Sure the AIG FP screwed up and those guys do not deserve a job, let alone a bonus, but the 90% tax is the most asinine proposal I have seen and it punishes the other hard working AIG employees who had nothing to do with AIGFP and certainly didn't cause this mess. These are middle class americans who work 12-14 hours a day at AIG, the IT managers, the HR generalists, the accountants and facilities people, trying desperately to keep the business going so it can be sold or IPOed later on to pay back the American tax payer. These employees have lost their life savings in AIG stock and 401K, they have not seen a raise or bonus this year and some of whom have spouses who lost their jobs. What is the point of taxing their only life line- their retention award, away? This will just lead to the departure of top performers and leave their mediocre colleagues to do two jobs. Pretty soon, all the employees will burn out and the company will lose its value very quickly. Losing employees and customers right now will not serve american tax payers any good if they want their money back. Instead, we should support the AIG employees and stand behind them so that they can do their jobs to help their country.
The knee jerk bill of congress this week was nothing more than political point scoring by selfish politicians riding on the coat tail of public opinion. Instead, why don't we look at who is really to blame for this economic mess we are in - the people who took out second mortgages because they want a fancy kitchen, those who borrowed up to the hill to keep up with the jones and the credit agencies and equity analysts who force companies to reach artificial high performance thresholds or face downgrades. Whos is to blame? all of us is to blame!

John of NY 7:36PM March 21, 2009

Sure the AIG FP screwed up and those guys do not deserve a job, let alone a bonus, but the 90% tax is the most asinine proposal I have seen and it punishes the other hard working AIG employees who had nothing to do with AIGFP and certainly didn't cause this mess. These are middle class americans who work 12-14 hours a day at AIG, the IT managers, the HR generalists, the accountants and facilities people, trying desperately to keep the business going so it can be sold or IPOed later on to pay back the American tax payer. These employees have lost their life savings in AIG stock and 401K, they have not seen a raise or bonus this year and some of whom have spouses who lost their jobs. What is the point of taxing their only life line- their retention award, away? This will just lead to the departure of top performers and leave their mediocre colleagues to do two jobs. Pretty soon, all the employees will burn out and the company will lose its value very quickly. Losing employees and customers right now will not serve american tax payers any good if they want their money back. Instead, we should support the AIG employees and stand behind them so that they can do their jobs to help their country.
The knee jerk bill of congress this week was nothing more than political point scoring by selfish politicians riding on the coat tail of public opinion. Instead, why don't we look at who is really to blame for this economic mess we are in - the people who took out second mortgages because they want a fancy kitchen, those who borrowed up to the hill to keep up with the jones and the credit agencies and equity analysts who force companies to reach artificial high performance thresholds or face downgrades. Whos is to blame? all of us is to blame!

John of NY 7:33PM March 21, 2009

Yes,our economy is in free fall, and we have many people to blame and we want to punish those who overspent and those who encouraged overspending and those who gambled with toxic assets.
There are those who oppose bailouts (for good moral reasons) and those who believe that the government must replace consumer spending with govenment spending (for good economic reasons.)
But why do we want to tax ONLY these undeserved bonusus? Can anyone justify the many $100 million plus compensation packages paid to many top executives in many companies or many people in sports and entertainment? Or even $50 million? Or $10 million? And even if we say such incomes are deserved, should such incomes be taxed at the same 35% rate as an income of $1 million, or $200 thousand?
What this country needs is a more progressive income tax structure. Capture the obscene incomes. Help eliminate poverty, help provide for better education and better health.

rst of NJ 4:37PM March 21, 2009

We still don't know what's behind the curtain. The bonus outrage is the tail wagging the dog. Are the financial wizards who received retention bonuses at AIG the same ones who sold the credit default swaps? Was the AIG board blinded by the profits?
Liddy said they were paid to employees who were retained to unwind the individual areas of the Financial Products Division that were looming, kinda like paying a mechanic to reassemble your car after they, or someone else, disassembled it. We just don't know.
What I heard is that Obama and Dodd received large campaign contributions from AIG, and that Geithner is a Goldman Sacks alumni. Rubin was too, and was also on the Board at Citi. No wonder the Obama administration says we should be responsible but not be concerned with who was responsible. Was there no violation of any Insurance Act?
Is it any wonder the Democrats want to take away our right to bear arms? Here's your change.

Ed of NJ 10:40AM March 21, 2009

I suggest people watch the testimony in Capital Hill by Ed Liddy - the government-appointed CEO of AIG who came out from retirement 6 months ago and works for $1 buck a year to save his country and the butts of his fellow Americans. Research the impact of the unthinkable if the remaining $1.6 trillion exposure in AIG is left without people to manage it. By the way, how much does any financial company has to pay a few hundreds traders to close the $1.6 trillion exposure? Research and make an educated judgement yourself, folks. It's easy to follow the political circus and popular media talks but it won't help resolve the deeply rooted problem created in the last 2 decades!

C-SPAN of NY 10:08PM March 20, 2009

Journalists should go after the AIG board members on the compensation committee. I'm sure a bit of investigation and a few questions to them would expose them as the true pariahs in this story. It is not a stretch to contend that the actions or lack of actions by this board committee is the fundamental root cause of a near global economic melt down. These Directors should be being treated in the press with the same contempt as Bernie Madoff. Yet they remain anonymous and not accountable. How long would Virginia Rometty remain as IBM's chief of sales if her failure as an AIG board member was being discussed in the press?

Conrad Greer 9:58PM March 20, 2009