Andrew Ross Sorkin Plays the Contrarian on AIG Bonuses

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nice, really nice!

Invexixheli of AL 9:09AM April 17, 2009

Love or hate AIG the important thing is to get the economy going. Let's move forward

ray of NY 11:05PM March 19, 2009

I guess it must be somewhat comforting to AIG that they have a friend or two out there.

findM of NY 7:00PM March 18, 2009

Re "The differences here, it would seem: AIG's ability to pay its bonuses comes solely from its taxpayer-funded bailout, while Merrill Lynch paid out bonuses before the BofA takeover."
Well, Merrill received quite a bit from the Feds via the AIG conduit prior to being taken over. And since money is fungible, I am not sure why it matters that Merrill paid their bonuses before being acquired - they lost money in 2008, so they were not paying out of profits; instead, they were making the payments early in anticipation of being acquired and losing control of the bonus pool.
Bonus point overlooked by Sorkin - in March of 2008 AIG eased out Joe Cassano, who had led the charge into credit derivatives. Many of the stay-behinds had nothing to do with credit swaps (AIGFP had many profitable other activities). AIG management wanted to keep them on as part of the solution, figuring the group would return to profitabiltu sans credit derivatives.
Obviously, things took an unexpected turn. But these people were induced to stay on as part of the solution, not because they had caused the problem. So why are they all villains now?
last question - could we get an even smaller font on the preview screens here? I can still read this with a magnifying glass, which I am sure is unsporting of me and is defeating the purpose.

Tom Maguire of CT 10:02PM March 17, 2009

I thought the purpose of the bailout money was to help in turning around the economy. Instead the pigs at AIG basically said screw America and took the money for themselves. That's theft, plain and simple. All I hear is "contracts." Somebody tell me what does the bailout money have to do with salaries and bonuses at these mismanaged companies. The money wasn't given to them to pay employee salaries. If the economy is a wreck and a company is failing, who in their right mind would think paying ridiculous, unearned bonuses will save that company. The government gave them the money to make the company healthy again. Who cares about their unfulfilled contracts. If those sorry individuals want their promised contracted bonuses, let them sue the company they drove into the ground. I guess the better answer is they should sue themselves. They should not be allowed to get away with this/
They had a contract with AIG not the government and certainly not the taxpayers who continue to be burden. Americans don't deserve this and it appears no one is stepping up to the plate on our behalf. I voted for Obama and believed he could get this country back on the right track. However, after this total mockery by AIG, if he gives them another 30 billion dollars it will be a great disappointment.

Delise of IN 8:42PM March 17, 2009

Sorkin needs to be decapitated.

Phil of TN 8:32PM March 17, 2009

Many of these people wrote "contracts" that were little more than insurance fraud. These contracts were then paid with taxpayer money. What about the unspoken social contract. Do I need a contract to breathe air, or congress to make defecation legal or illegal. This is ridiculous. These "exectutive officers" are criminals. They are not talented desireable employees. Nobody is speaking english... Toxic assets are people whose lives are ruined. Credit Default Swaps are quasi legal insurance fraud. Where were the Real Estate agents and brokers who are equally complicit. The incentives in real estate are all wrong. Why should agents split 6% of the purchase price. ALL the incentives of mortgage and real estate served to create a bubble. These officers are not talented. They should be banned from banking and insurance, be stripped of their wealth and thrown out on the street with the rest of us.

James of CA 3:11PM March 17, 2009

Having just read Andrew Ross Sorkin's article I only have one comment. If you have to add a bonus to the contract in order to get the best and the brightest how come the best and the brightest haven't kept AIG out of the mess they are in?

Jacqueline A Simpson of MD 2:32PM March 17, 2009

I tried to end this directly to Andrew, but I guess I don't have a valid email address-
Andrew:
While I appreciate your view that the sanctity of contracts should be upheld, most people (In fact all that I know of or have heard of) get bonus clauses in their contracts for performance; for giving the extra effort. I know of no one that gets rewarded for not doing his or her job or doing a poor job. Most people would be fired. Yet AIG rewards its responsible parties for acting irresponsibly. The purpose of the bailout was to prevent AIG from "tanking", not to enrich those who betrayed a public trust.
What is obvious to most people is that the sanctity of the contract has been put before the sanctity of even more fundamental issues of right and wrong and fairness.
Those same lawyers and Wall Street folks that believe that contracts should be upheld and enforced could probably find a way to break those contracts(What is the old adage?- Contracts are made to be broken?). What the AIG executives have done is, essentially, privately pocketed public funds for their own enrichment.

John Clark of NY 2:08PM March 17, 2009