About Those Bonus Contracts

[Warren Stupidity]

I would like to see the contract that guarantees bonus payouts in the millions of dollars (several AIG executives received around 4,000,000 each it seems, and 70 or so over 1,000,000) without regard to company profitability or individual performance.

I would love to see the exact details of these alleged contracts.

No qualifications at all on the 'bonus' portion of the compensation package? Really?

Generally bonuses are tied to corporate and individual performance. Generally, there are merit (individual performance) qualifications, and there are corporate (profitability) qualifications, and compensation packages are, again generally, written to include a mix of merit and profitability bonus compensation over and above normal compensation.

Show us the contracts.

The kleptocracy's media shills have defended the redirection of taxpayer money to huge bonus payouts to AIG executives on the basis that we cannot do otherwise because of the contractual obligations. Of course they sputter and chirp when it is pointed out that this was no obstacle at all when auto worker contracts were involved. The UAW was given a choice: renegotiate or else, and they chose, as always, to preserve jobs and benefits. The executives of AIG should be given the same choice: renegotiate or else.

Just show is the contracts.

[Fire1]

1. The problem with re-negotiation in this instance is the fact that

many of the bonus recipients got their bonuses and have left the firm. I'm much more in favor of taxing recent and future bonuses for additional revenue.

[Warren Stupidity]

2. I support the windfall tax.

And I want to see the contracts. But indeed if, as you say, many of these crooks have already left AIG, that would falsify the other argument from the kleptocracy that this payola is required to retain the grifters that got us into this mess due to their special skills and understandings.

[Fire1]

4. That was the farce from the beginning that they tried to sell to

Congress (by leaving a loophole in the regulations tied to TARP fund recipients)and the general public.

[madmom]

3. So I'm curious about this..

"many of the bonus recipients got their bonuses and have left the firm". There are a lot of auto workers who are retired or "left the firm" but their pensions are in jeopardy. They have already fulfilled their obligations but the powers that be seem to think they can renegotiate their contracts. What's the difference?

[Fire1]

5. "Performance bonuses" are not the same as pensions and

should not be treated as such and I don't think they will be. I anticipate current pension payouts to be grandfathered.

[C......N......C]

8. Rush said that he jsut can't see somone beig paid for no working.

[C......N......C]

6. Contract is called: How much left to steal.

[rocktivity]

7. I was thinking about that last night--SOMEONE must have SIGNED those contracts

Who? And what did the execs have to do to received those bonuses? We own 80% of AIG now--SHOW US THE CONTRACTS!!!!

:headbang:
rocktivity

[C......N......C]

9. None of these business's are proud family traditions that have the blood and sweat

of people working day and night to make succeed. These people could care less if the doors closed tomorrow. Unless they didn't get a last chance to steal more.

[TahitiNut]

10. As I understand it, many/most of the AIG bonus payments were "retention bonuses" ...

... which are a kind of 'balloon payment' on employee compensation. They were not "performance bonuses," per se. They were employee compensation agreements set in early 2008 to ensure that certain key personnel, deemed essential to reducing the massive default exposure AIG faced as a result of its wholesale CDS business. It seems that AIG saw the problem in early 2008 at the latest, possibly as a result of an internal audit review or other accounting analysis. The idea behind a "retention bonus" is to ensure that someone with "special knowledge" doesn't bail out and go to work for a competitor or freelance where the company regards their services to be needed. Thus, the employment contract is designed to do back-end loading of the compensation ... ensuring they don't leave in November, for example, by promising a payment in December. The arrangement also often includes certain 'technical' aspects that reduces the income tax exposure for the recipient.

Far too much of the ignorance-based rhetoric, both in the M$M and the 'tubes,' obfuscates the particulars of these arrangements. Of what I've read, about 95% is sheer hyperbole, supposition, and conjecture. Liddy was fairly clear, in his testimony, that there were NO performance bonuses being paid. He was virtually ignored ... probably because 'Stupid Rules!" in our political dialectic. People just don't fucking care about facts when the torches are lit and the mob formed.

It's understandable, of course, since this is a peek into a non-Euclidean Universe of compensation and corruption that very few have ever seen first-hand. As a fellow who spent decades in the "belly of the (multinational corporate) beast," many years as a management auditor and operational analyst tasked to turn over such rocks and count the maggots, this stuff isn't new to me. Sadly. I saw the massive corruption metastasize at the executive levels in the Fortune 10 over 25 years ago. It's a different world. Truly.


I agree that we'd benefit from seeing the specific employment agreements and a far more fact-based portrayal of the issue.

[C......N......C]

11. They are laying off tens of thousands of people in these industries

and consolidating and putting companies out of business. I wonder if you really needed a retention bonus.

[Deja Q]

13. Only if they retained people...

[TahitiNut]

14. Every crisis creates a demand for specific skills.

You can lay off firefighters ... but when the town is burning, they can command high salaries. The financial crisis was first visible in the very offices that created the crisis ... hedge funds and traders/brokers in derivatives. Even an arsonist "gets religion" when his own house is in flames and his family is screaming in terror.

It's just NOT sufficient to speak in generalities and engage in rabble-rousing rhetoric. There's a far broader perspective needed to see the essentially unbounded corruption that creates a different "reality" with these people.

[Fire1]

15. I guess that's my point. For all intent and purposes, whether

it be for retention, performance, bribery or whatever one may call it, many of the 'arsonists' have left the building. Pitch forks and torches about a contract that everybody knows NOW (after the fact) had convenient loopholes really serves no purpose, imo.

[BR_Parkway]

12. Pay them in CDO shares instead of dollars - they're the idiots who

said those things have value - they should reap the rewards of their superior judgment.

[Igel]

16. From what I understand, they have "shown us the contracts."

Of course, "us", in a representative democracy, is the elected representative who's legally entitled to seeing them. That would be Obama.

Obama, however, delegated the responsibility to Geithner and or Summers, who delegated the responsibility to their lawyers. Then one of them--I forget which--said that he agreed with Liddy that, yes, AIG was legally obligated to pay them.

Of course, many of the recipients are not in the US. No matter. It would make litigating them a bear, though.

And, of course, more than a few of the recipients who received the retention bonuses are no longer with AIG. That's raised a stink--why get a retention bonus if you've quit? That leaves aside the possibility that they were let go not for cause; it also ignores what the details of contracts were. Believe me, few executives, whether they take billions in government money or otherwise, like giving away money that they think their employee isn't entitled to. The only exception is when they think there'd be a messy enough lawsuit to make the victory of not paying the money a thoroughly pyrrhic one. (Even then, they sometimes fight just to keep from establishing precedent.)