Insurance giant AIG to pay $165 mil in bonuses despite $170 bil taxpayer bailout
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0
smartacus
This is obscene. Capitalism at its very worst.
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shiuu
I think it's funny that people thought things would be any different under Obama.
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smithinjapan
Well, I hope that from now on the government's 'hands are tied' and they can no longer bail out companies that refuse to stop giving all of said money away to executives. I hope this company goes down... I really do... starting with the executives.
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smithinjapan
shiuu: "I think it's funny that people thought things would be any different under Obama"
Yeah, we all thought executives would suddenly stop being executives once Obama took control! We also thought the sky would turn purple, but even though he has control of that, too, clearly, he hasn't done it.
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urufuls
This isn't capitalism. The executives didn't do anything to earn the money. That's why it's called a bonus.
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donkusai
Whatever happened to linking bonuses to company performance? For goodness sakes, the company made a huge loss! Capitalism can work just fine, but this isn't capitalism, it's closer to commercial fraud. The bail-out money should have been conditional, leaving the execs with the option of foregoing the bonus, but keeping their salary, or refusing the bail-out and losing their bonuses, the salary and their jobs. At the very least, the U.S. government should become the major shareholder (with the money they've put into the company), and then they'd have a say in the removal of board members.
For the last 8 years (or more), corporations have virtually been given a free hand to make money anyway they want. You only have to look at the "creative accounting" of Enron, which generated a huge amount of "pretend wealth", but like most scams, once they reach a certain point, they cannot be sustained and they collapse. With the Bush government's economic policy being dictated by people with links to the former Enron, including the former president's chief economic advisor, is it really a surprise that the financial environment is really this messed up?
If you truly believe in a completely free market, then you must let these businesses fail and send the country and the world into the biggest financial collapse ever seen. If you believe that government's have an obligation to look after their citizens, then businesses must look at both profit and sustainability of their businesses, and this requires some government intervention, as cases like this one at AIG and others show that corporations wont do it themselves.
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JoeBigs
Slowly this will end, the fat cats that ruled the day have now been given notice. The Obama administration could not stop this hand out legally but AIG is now on notice.
Some of those that blame Obama may want to remember that he was not President when all this came down. AIG did not fall under his watch but rather fell under a republican watch. Now is the time for our President to hold these exec's feet to the fire. Something that the Bush administration would not or could not do.
Bravo to the Obama administration for putting these thieves on notice!
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SuperLib
What, the contract pays $165 million in bonuses on condition that AIG becomes the biggest money losing company in the history of the world? Looks like they nailed that target.
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Badsey
When people are getting fat bonuses to fail --> Socialism. By their logic everyone in Washington should be getting a bonus (to fail) this year also.
0
adaydream
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rollonarte
AIG political donations
Money to Congress: 2008 Cycle
to Democrat Party: $361,517
to Republican Party: $95,250
0
buddha4brains
So? Everyone with any political sense knew that the election was the Dems to lose. Why would any company waste too many dollars on a losing cause?
Tell me that AIG had mainly donated to the Dems for the last 3 or so years, then that would be interesting. Otherwise, you're tilting at wind mills.
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sailwind
Ask and you shall recieve.
A few companies are now giving more to Democrats than they are to Republicans, reversing their pattern of the last election cycle. MetLife Inc. has given Democrats a slim majority of its donations after giving Republicans 60% of the money in the 2004 campaign. **AIG has given 57% of its donations to Democrats so far in the 2005-06 election cycle. **In the last election cycle, the insurance company gave 53% of its campaign contributions to Republicans and its then-chairman, Maurice Greenberg, raised an extra $200,000 for President Bush.
A spokesman for MetLife said the company generally gives about 50% of its contributions to each party, with Republicans receiving a slight majority. "At the end of the day when the election cycle is done you will find that we will be pretty much again in that 50-50 range," said MetLife spokesman John Calagna.
A spokesman for AIG declined to comment.
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sailwind
Apologies...
The link is here.
http://www.commondreams.org/headlines06/0619-05.htm
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grafton
sailwind at 08:18 PM JST - 15th March
“In the last election cycle, the insurance company gave 53% of its campaign contributions to Republicans and its then-chairman, Maurice Greenberg, raised an extra $200,000 for President Bush.”
How will this work out if a Democrat government is bailing a company out & that company is paying out money to political parties? Isn’t this tax payers money going to political parties?
Really I agree with donkusai this bonus money being paid to people who failed is a nonsense. Whenever I have worked for a large company if there were bonuses they were only paid if the company did well, if they didn’t there was nothing extra.
0
Sarge
I don't mind executives receiving huge bonuses. I do mind taxpayers' money being used to pay the bonuses.
AIG should immediately repay the government what they've borrowed over the past year, even if they have to file for bankruptcy and sell off assets to do it.
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smithinjapan
sarge: "AIG should immediately repay the government what they've borrowed over the past year, even if they have to file for bankruptcy and sell off assets to do it."
For once we're in agreement, despite the fact that it's very they'll pay back a red cent. Not only AIG, but any other company that gives its execs huge bonuses while borrowing the money to do so from the government.
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sailwind
Agreed, however as much as am loathed to say this, AIG really doesn't have much of a choice but to pay these bonuses. This a crooked company mixed up with crooked politicians for years, hate to yell but this is important FROM BOTH PARTIES DEMS AND REPUBLICANS, and played both sides of the fence to get sweetheart legislation passed in their favor.
But the bonuses were part of a legal contract they are bound by law to pay.
So as much as I would love to see them not pay it for the piss poor way they have ripped off the taxpayer and continue to do so by this bail-out. Which I have no doubt was given to them by being greased by all the contributions they gave over the years to the pol's, and they were calling in the favors.
It would set a horrible precedent if AIG were given the right to just ignore their contractual obligations it gave to their employees. It would mean all other honest companies could then say 'We don't have to honor our legal contracts to our employees either'........ I don't think anyone here would want to go down that road. I'm under contract right now and I bank on my employer to honor their end as I honor mine.
So this sucks all the way around. I know one thing though. Firms like AIG and GM and all the others that are getting bail-out money, I'll never buy from or do business with.
It's my way of protesting the way they ran their business and I think many Americans feel the same way.
I wonder if Obama's team or for that matter Bush's team previously if they took that into consideration. These bailouts may be a short-term solution but they only put off the long term problem, consumers like me who are going to remember they survived only because of Uncle Sugar and my tax-dollars to continue to make crappy products. If I was in the States I would by a Ford because they didn't ask for a bail-out, and that speaks volumnes to me. I hope these bail-out companies never return to long-term health in their present form and I hope to see them fold and assets sold or merged into other companies and the sign 'Under New Management' posted on the company door.
My overall thoughts on this so far and my opinion on 'bail-outs'.
Then I might see what they have to offer.
0
Betzee
The terms of the bail-out "contract" were drawn up last fall. If you want Uncle Sam (or AIG) to change them retroactively, well that would undermine our capitalist system. Hence forth no one would have the confidence to conclude a business deal since the laws affecting the contract could change tomorrow.
One of the issues which was raised last fall is the government has no expertise in running private sector enterprises. True, but our financial infrastructure would have collapsed under the banks not be bailed out. Things has reached such a dire stage before corrective action was undertaken in a hasty manner.
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Taka313
I couldn't agree more.
Yeah, this situation sucks and for all the reasons you mentioned, the companies should pony up the bonus money.
However, unless there is something in the contract specifying how, when and where the bonuses are paid, I don't think there's anything wrong with having the bonuses presented to the CEOs at a huge employee townhall-style meeting. Let them go on stage, in front of all the employees and share holders that they screwed, after listening to those same employees and share holders concerns over their own futures, to collect their checks, again, in front of everyone.
Perhaps the impassioned pleas and complaints of the rank and file employees (as well as the pitchforks and torches) could persuade the CEOs to give their bonuses back to the company.
Taka
0
Triumvere
How did we get in this position?? We have vitrually nationalized these institutions, but in a manner in which we get all the worst disadvantages of nationalization with absolutely none of the benefits? So we assume all the losses while these guys take home the cash? And everyone is afraid of "Socialism." Bah! If we had "socialized" AIG, then we could atleast have gone through and fired all these.
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USARonin
Triumvere, instead of relyin' on the sweat of others, you should be self-reliant.
Too bad, my friend.
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smithinjapan
sailwind: Awesome post, my friend. I think they are indeed bound to pay the contracts, I just think that that should have been discussed BEFORE the bailouts, with the government saying that they won't get any unless the execs agree to give up their bonuses. Too late for that now, of course.
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JoeBigs
Hm could you please provide your source web site for this. The reason I ask is that when I checked AIG has favored Republicans more than Democrats. Here is my source;
http://www.propublica.org/article/aigs-campaign-contributions-1030
Maurice Greenberg AIG CEO until 2005 Political Contribution $310,350 Republican $40,450 Democrat $1,000 Independent
Edward Liddy Present CEO of AIG Political Contributions $14,100 Republican $250 Democrat
Wow it looks like AIG CEO's are Republicans, what ya think?
BTW if you want to know what someone contributed to and how much go to http://www.newsmeat.com/.
0
30061015
Taxpayer=slave. Theyve got us a comin & a goin exactly to script... Look at you guys, worried about who's a D or an R while they fleece the hell out of us all!
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Triumvere
USA Ronin,
Err, what? I'm not advocating for nationalization, but if you are going to do it, then you should go all the way. Explain to me exactly how you think the current set up (nationalizing the risk and losses while privatizing the profits) is beneficial to the taxpayer? By fully nationalizing the institutions, you would put the government incharge of them, thus making them ultimately accountable to the electorate. Under the current sytem, management to continue making boneheaded investment decisions (or, in the case of banks, continue to not lend, despite the desperate need) and generally is free to loot the company (and the stimulus) without repurcussion. Also, I'd be curious to know what this has to do with "self-reliance".
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