Tuesday, March 17, 2009

You Don't Deserve a Bonus, Buster

I’m sure most of you have heard about this already, but I wanted to quote parts of the article by Martin Crutsinger, AP Economics Writer and include my own thoughts.

AIG , the largest recipient of taxpayer-funded bailout money has announced it’s “giving executives in its most troubled business unit tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars.” And AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.” How in the HELL do Responsible executives manage to lose $61.7 BILLION in 3 freakin’ months?

Further, “The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.” So I guess THAT’s how they lost 61.7 Billion in just 3 months, by NOT being foresighted enough to STOP dealing in those Risky contracts when all economic indicators were pointing towards a downturn in the economy.

“The company says that AIG is contractually obligated to pay a total of about $165 million of previously awarded ‘retention pay’ to employees in this unit by Sunday, March 15. The document says that another $55 million in retention pay has already been distributed to about 400 AIG Financial Products employees.” Liddy, the head of AIG said, "We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers - if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."

WAH, WAH, WAH! Cry me a frelling river, Mr. Liddy. If your “best and brightest” are capable of losing $61.7 BILLION melon farmin’ dollars in 3 months, why don’t you fire THEM and hire my accountant ? He’s Great with money! Also, don’t feel you need to operate “principally on behalf” of THIS taxpayer. If it was up to me, and lots of others around the country, we’d let market forces determine whether your company sank or swam.

“The Treasury Department determined that the government did not have the legal authority to block the current payments by the company - which are part of a larger total payout reportedly valued at $450 million, an administration official said Saturday." And let me speculate WHY the .gov doesn’t have the authority to stop the insane bonus payments… could it be because Obamassiah and Congress were in such a hurry to pass this “bill o’handouts” they didn’t apply any limits or standards for the corporate welfare?
An anonymous official “said that Geithner [Treasury Secretary] had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG's current bonus structure.” And how’s that working for ya’ Geithner? Did Liddy pay any attention when you stamped your feet and held your breath?

Geithner did deem the current bonus structure “unacceptable in view of the billions of dollars of taxpayer support the company is receiving.” And just why did you NOT deem ANY bonus structure abhorrent and insulting to the people who pay your salary, Geithner?

Liddy informed Treasury that outside lawyers had informed the company that AIG had contractual obligations to make the bonus payments and could face lawsuits if it did not do so.” Lawsuits? The company is circling the drain and you’re worried about lawsuits over what amounts to EXTORTION? Give me a big ole break. WE, the American Taxpayers, are seeing our money WASTED by rewarding these irresponsible executives. Perhaps, if AIG honchos had tied their bonus structure to PERFORMANCE, i.e. NOT losing BILLIONS of dollars, they wouldn’t be wasting our money now! And has anyone considered assigning some bright minds in the DOJ the task of finding a way to nullify those contractual obligations?

Liddy said in his letter that 'quite frankly, AIG's hands are tied' " although he said that in light of the company's current situation he found it " 'distasteful and difficult' to recommend going forward with the payments.” I just BET you do, Liddy. Would you find it “distasteful and difficult” if the public was not aware of this sweetheart deal? If taxpayers were not heading, figuratively, for your corner office with torches and pitchforks, would you be lying through your teeth about the distasteful bonuses?

“The company says in the paper it will work to reduce the amounts paid for 2009 and believes it can trim those payments by at least 30 percent.” 30%? I think not! I think, in light of the fact you are BORROWING my money to dig your company out of a hole, ALL bonuses are CANCELED until the company, all divisions, are once again turning a Healthy profit. I mean, if you file for bankruptcy because there’s NO money coming from angry taxpayers You wouldn’t be ABLE to pay these outrageous bonuses, now would you? So tell your execs due to receive bonuses for substandard work to “BUTCH UP” and get over their nasty, greedy selves until the company is back in the black for 12 quarters in a row.

AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives. Liddy and six other executives have agreed to forgo bonuses." So 6 out of 50 execs have graciously and generously agreed to NOT take unearned money. BFD, why don’t all 50 agree to salary CUTS? Now that would really be a show of good faith on their part!

“But these payments will be contingent on the AIG board determining that the company is meeting the goals the government has set for dealing with the company's financial troubles.” Too little, too late, fellas.

AIG is simply the most egregious offender in my opinion. I think we should stop all corporate welfare, including the auto industry, and let the market correct itself. THEN we would have healthy, well-managed corporations taking over the mis-managed companies at pennies on the dollar. They wouldn't need to be bailed out. AND this tough love approach to corporate America would be an object lesson in the future for ALL companies to be more responsible.


Anonymous said...

Obama ran on the "Yes we can" platform. It should be easy for him to deliver now by stopping the bonouses and getting back the bonous money already distributed. Obama should be saying "Yes we can stop the bonous payout", "Yes we can get the money back that was already paid out". Obama should be confident that "Yes we can"! He talked the talk, now let him walk the walk!

phlegmfatale said...

i'm with you - end all taxpayer support of failing corporations - they didn't share their profits with us, why should we share their failures?

Crucis said...

The real point to all this, legality of contracts aside, is that the all this has been known from the beginning. It's just an issue now because it came out that BO boys gave out all that money with NO STRINGS ATTACHED!

Now, BO is trying to change the rules after the fact. If BO, Barney Frank (the real culprit in the collapse) didn't want the money to go to salaries and bonus, THEY SHOULD HAVE STIPULATED THIS IN THE FIRST PLACE!

BTW, the execs with bonuses are all in the UK and UK law requires payment when the conditions of the contract is met.

Anonymous said...

Where is Homeland Security. Shouldn't these AIG Execs reside in Guantanamo. If you do the math, it seems to me they killed more than 3000 families' lives.
I guess nothing makes sense in this country anymore.

Old NFO said...

Holly, it's not just AIG, it's all of them getting bonuses including Freddie and Fannie!!!