AIG

[classicman]

Originally Posted by TGRR

$169 million of the $208 million in bonuses were paid on the troubled financial services side of AIG.

Financial SIDE - keyword is side. They were not in that particular department. This is OLD news.

Originally Posted by TGRR

11 people who received these so-called "retention payments" no longer work there.

Because they already fulfilled their obligation to the contract.
85% ARE STILL WORKING THERE

Originally Posted by TGRR

Screw that. They had a deal with their employer. Their employer no longer works there, and they have a new boss.

"All commerce throughout the world is dependent on the sanctity of contracts," said James Donovan, a Los Angeles attorney.
Such moves could make it difficult for financial companies to recruit employees because they might fear their employment contracts would be broken, he said.

This is a pittance of what AIG got. Remember that - 1/1000th.

Wanna bitch? Read your article...

Last month, The Wall Street Journal reported that Morgan Stanley plans to pay up to $3 billion in retention bonuses to 6,500 brokers in its joint venture with Smith Barney. Morgan Stanley has received $10 billion in bailout funds.

[lookout123]

I haven't looked into the specifics of the MS retention bonuses but if they are in fact retention bonuses for brokers this may be a very smart bit of business. The brokerage business is extremely cutthroat and loyalty is a foreign concept. That $3B divided by 6500 is only a bit more than $400K average on each. Some of those brokers are easily 8 figure annual producers. You pay retention bonuses to keep these guys around otherwise they go across the street, accept a 6-7 figure signing bonus and take 90% of their clients with them. A broker who has busted his but for 5 years can easily collect $5-700K signing bonus on their first firm to firm move.

Why? Because they make those firms money. Don't cut your nose off to spite your face. Keep your moneymakers happy so you can rehab the rest of your company.

[sugarpop]

Originally Posted by classicman

Financial SIDE - keyword is side. They were not in that particular department. This is OLD news.


Because they already fulfilled their obligation to the contract.
85% ARE STILL WORKING THERE




This is a pittance of what AIG got. Remember that - 1/1000th.

Wanna bitch? Read your article...

There are still more bonuses owed at AIG, err, I mean AIU (haha), and they add up to a billion dollars. It isn't the taxpayers job to make sure ANY bonuses are paid out.

I know those people didn't work in that department, but IF WE had not injected all that taxpayer money into the company, NONE of them would have jobs. And, eveyone else in America is having their contracts renogotiated, and taking pay cuts, or losing their jobs. What makes AIG so fucking special?

In addition, these are NOT ordinary times. Even though those particular people didn't cause the crash at AIG, AIG was a huge part of the problem. The people who work there should just suck it up, like everyone else in this country, and agree to take the money AFTER the taxpayers are paid back. What is wrong with asking them to do that, especially since a bunch of those bonuses are over a million dollars? And there will be more coming. We have to stop it, NOW.

[sugarpop]

Originally Posted by lookout123

I haven't looked into the specifics of the MS retention bonuses but if they are in fact retention bonuses for brokers this may be a very smart bit of business. The brokerage business is extremely cutthroat and loyalty is a foreign concept. That $3B divided by 6500 is only a bit more than $400K average on each. Some of those brokers are easily 8 figure annual producers. You pay retention bonuses to keep these guys around otherwise they go across the street, accept a 6-7 figure signing bonus and take 90% of their clients with them. A broker who has busted his but for 5 years can easily collect $5-700K signing bonus on their first firm to firm move.

Why? Because they make those firms money. Don't cut your nose off to spite your face. Keep your moneymakers happy so you can rehab the rest of your company.

If this was a normal situation that would be fine. It isn't.

[lookout123]

OK. Let's treat it as not normal and not pay the bonuses for the work they did. How healthy do you think the firm will be if the top 15% of producers accept 6-7 figure checks to move their practices over to a firm that understands the value of their moneymakers?

[TGRR]

Originally Posted by classicman

Financial SIDE - keyword is side. They were not in that particular department. This is OLD news.


Because they already fulfilled their obligation to the contract.
85% ARE STILL WORKING THERE




This is a pittance of what AIG got. Remember that - 1/1000th.

Wanna bitch? Read your article...

Them, too.

I have no patience whatsoever with these welfare queens and their bonuses. If they didn't get the bailout, the money simply wouldn't be there. Basically, what we've done is take our tax money, and give it to some bastards making half a million a year +, and given it to them to reward them for being a colossal failure.

I don't care if it's 1/1000 of the bailout. I would be pissed if it was $10.

[TGRR]

Originally Posted by lookout123

OK. Let's treat it as not normal and not pay the bonuses for the work they did. How healthy do you think the firm will be if the top 15% of producers accept 6-7 figure checks to move their practices over to a firm that understands the value of their moneymakers?

Why should I care? Any firm that is dumb enough to hire them deserves what they get...and IF any real producers move, the wealth will move with them, and things will continue moving forward, just somewhere else.

[sugarpop]

Originally Posted by lookout123

OK. Let's treat it as not normal and not pay the bonuses for the work they did. How healthy do you think the firm will be if the top 15% of producers accept 6-7 figure checks to move their practices over to a firm that understands the value of their moneymakers?

Well gee, what about the automakers, and everyone else who is taking a pay cut? Why is it only the friggin' rich people that seem to matter? Holding us hostage is OK somehow?

[xoxoxoBruce]

In france, labor held a 3-M vice president hostage.

[sugarpop]

Another point lookout, maybe all that money is part of the problem. Maybe, since those people make so much money, they should be the FIRST to have to sacrifice until we are healthy again. Why is it the middle class and poor are always the first to have to sacrifice, no matter what the problem is? It's time those with money do some sacrificing. Maybe there should a wage freeze at the top until this thing blows over.

[sugarpop]

Originally Posted by xoxoxoBruce

In france, labor held a 3-M vice president hostage.

And that is why in France, the government is afraid of the people, not the other way around. And IMO, that's the way it should be.

[piercehawkeye45]

Originally Posted by sugarpop

Why is it the middle class and poor are always the first to have to sacrifice, no matter what the problem is?

They don't have power. In most situation, the more power you have, the less you will have to sacrifice.

[tw]

Originally Posted by sugarpop

My understanding is the particular division that caused all the trouble was so complicated, and the contracts were so convoluted, they had to "unwind" those contracts, and they apparently needed people who understood them to stick around to do.

Simply fire the people who created the mess and rehire those who originally created this derivative operation. The guys who created the operation that made risk predictions also did not always trust their own creation. Therefore they often rejected obligations that their own predictions recommended.

After Hank Greenberg left, these guys were let go for being too conservative and cautious. If these contracts are so complex, then AIG needs people who would have never made those obligations in the first place. Not the people who got ridiculous bonuses for creating the meltdown.

Meanwhile, a bottom line remains. AIG is dead. It is just not official yet. Any productive parts of AIG should be sold off. Government will never recover that money because when the George Jr administration made multiple commitments, nobody knew how much Enron accounting had hidden such vast losses.

More important is a message that must be sent to finance people. They are not geniuses. They are bureaucrats and salesmen. Their job is to create liquidity as a bank teller and loan officer does for you. To direct money flows so that productive people can do their work.

It's not derivatives that are a problem. Problem are people with too much belief that finance people can be innovative, and that their purpose is to make profits. Derivatives can be useful financial instruments to help productive industries alleviate financial problems such as cash flow.

Does you bank teller deserve a bonus only because you deposit or withdrawal more money? Of course not. They provide a service so that others can be innovative and therefore productive. Derivatives are supposed to be tool to help the economy's productive parts - not enrich finance people through money games.

AIG is dead. It will not be profitable no matter how many lies are spun about saving those employees with bonuses. When the entire company is losing money, nobody - especially any management in any division (even if productive) deserves a bonus. That's what a salary is for. You are expected to perform superbly. The bonus only happens if the company is also profitable. But not in the finance industry where profits rather than service are more important.

[classicman]

Not just the finance industry. Bonuses are common in many others as well. In this case they were retention payments, not bonuses. That buzzword created all this outrage over virtually nothing. There are many more and much larger payments scheduled in other organizations.
Everyone knew these were on the books. There were no surprises, just a bunch of bureaucrats covering their asses when the public got outraged.

Look to Barney Frank and Chris Dodd, both in charge of oversight on these matters. Certainly they have all the answers to the whys and hows of all this. After all, thats what we pay them for. If they pull their collective heads out of their asses long enough, just ask them.

[tw]

Originally Posted by classicman

Not just the finance industry. Bonuses are common in many others as well.

Funny. I worked in many productive operations. Bonuses occur only when the entire company is productive. The message is out. Bonuses are not deserved only because the employee's salary is not high enough. It is not about what is common. It’s about people who are typically not productive (finance people) who then take massive rewards for being part of that non-productive operation.

But again, is the purpose of the company its profits - or being a productive entity in America? Obviously the latter.

So Nardelli who was running Home Depot into the ground took a $200 million bonus (or whatever you want to call it). Or Thain manipulates bonuses so that Merril Lynch employees get bonuses provided by Tarp money and before the BoA takeover. Clearly these employees and CEO who did so much harm to America deserved them. classicman tells us they deserve to be paid more than doctors, scientists, engineers, and farmers because ... he does not say. Soundbyte logic with a left right dichotomy that would instead blame Barney Franks.