AIG bonuses ..........

[thesource]

CNN) -- Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.


Sen. Chris Dodd, D-Connecticut, appears on CNN's "The Situation Room" on Wednesday.

Both Dodd and a Treasury Department official who asked not to be named said the administration pushed for the language because it was afraid the government would face numerous lawsuits without it.

Dodd, a Democrat, told CNN's Dana Bash and Wolf Blitzer that Obama administration officials pushed for the language to an amendment designed to limit bonuses and "golden parachutes" at those companies.

"The administration had expressed reservations," Dodd said. "They asked for modifications. The alternative was losing the amendment entirely."

On Tuesday, Dodd denied to CNN that he had anything to do with adding the language, which has been used by officials at bailed-out insurance giant AIG to justify paying millions of dollars in bonuses to executives after receiving federal money.

He said Wednesday that the "grandfather clause" language "seemed like innocent modifications" at the time. Watch Dodd's interview with CNN's Dana Bash »

"I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."

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Dodd said he did not speak to high-ranking administration officials and the change came after his staff spoke with staffers from Treasury.

The White House did not immediately respond to CNN's request for comment.

On Capitol Hill on Wednesday, AIG chief executive Edward Liddy called the roughly $165 million in bonuses "distasteful" but necessary because of legal obligations and competition.

"We have to continue managing our business as a business -- taking account of the cold realities of competition for customers, for revenues and for employees," Liddy told a House Financial Services subcommittee. "Because of this, and because of certain legal obligations, AIG has recently made a set of compensation payments, some of which I find distasteful."

Pennsylvania Rep. Paul Kanjorski, the hearing's chairman, responded to Liddy's statement by arguing that AIG should have refused to pay all the bonuses -- regardless of its contractual obligations with the bonus recipients.

"Let them sue us," said Kanjorski, a Democrat.

Liddy, who joined AIG after the bailout, said some employees have returned their bonus money.

Senators and representatives have vowed to get the bonus money back, but questions have arisen about why Congress didn't act to prevent the bonuses in the first place.

"Well, the only lever we have in this is the fact that these corporations have come to the Congress of the United States and want a taxpayers' bailout," Sen. Chuck Grassley, R-Iowa, said Wednesday on CNN's "American Morning."

"If it weren't for that, we would not have any leverage on how any individual corporation is being run, and we don't pretend to have any leverage on any corporation today in the United States that's not seeking federal help," said Grassley, the top Republican on the Senate Finance Committee. Related: Grassley defends 'suicide' comment

AIG, an ailing insurance giant, has received more than $170 billion in federal assistance. Taxpayers now own nearly 80 percent of the company.

In a letter to Congress on Tuesday, New York Attorney General Andrew Cuomo confirmed that AIG paid 73 employees bonuses of $1 million-plus each this year after it received federal bailout money.

AIG will have to return the $165 million it paid in executive bonuses to the Treasury Department, Treasury Secretary Timothy Geithner said Tuesday.

Grassley and Sen. Max Baucus, D-Montana, on Tuesday introduced a plan that would impose a hefty tax on retention bonuses paid to executives of companies that received federal bailout money or in which the United States has an equity interest. Watch Grassley describe how the tax would work »

Other lawmakers, such as Rep. Charlie Rangel, D-New York, said it would be unfair to use the tax code as punishment, but Grassley said it's not a question of being fair.

"It's unfair what they did to the taxpayers by paying bonuses when they don't have the money to pay bonuses," he said. iReport.com: Sound off on AIG

AIG Chairman and CEO Edward Liddy has defended the bonuses, saying the company needed them to retain top talent and because of contractual rights. He has pledged to reduce 2009 bonus payments, which AIG refers to as "retention payments," by at least 30 percent.

Libby is testifying Wednesday on Capitol Hill. He's likely to face tough questions from lawmakers despite not being at the helm of AIG when the financial fiasco happened. He took over about six months ago.

I'm going to love seeing how the Obama group spins this one now after raising all this shit about it .

[Superman750]

How can people not know that this sort of thing was going to happen? It amazes me and then it doesn't about how naive that people can be. Unfortunately, because the mass public is a bunch of incompetent morons it will inevitably lead to the destruction of the nation. No matter how often people bring forward the truth about stuff like this, it will continue to happen. If we personally aren't the ones to pay for it, it will be our children or grandchildren.

[88GT]

I thought bonuses were for helping a company be successful. Not for making it go bankrupt

[95 GTS]

Originally Posted by thesource

I'm going to love seeing how the Obama group spins this one now after raising all this shit about it .

They already did, Obama wants to try to tax the executive bonuses at 95% per the wall street journal this morning.

One of the crazy issues with this is the number of these executives that are outside the country or arent even with the company anymore!

[VMT]

Of the 165 million paid out in bonus $$,7 people recieved a million dollars in bonus money and one person recieved 3 million.What is his job?What does he do that warrants a 3 million $$ bonus!?The bonuses were paid out last Friday,its to late to do anything to try and stop the payout.I read and saw on the evening news last night that a few of the bonus recieptients have given back "part" of the bonus,but most everyone kept them.AIG has recieved more government help than any other company,GM is about to go tits up and the good folks @ AIG are cashing million $$ bonus checks.Even when taking a government handout,taxpayer money,our money,corporate america still find a way to put it in and snap it off.

[2k4mk1]

They wont let AID fail becuz they are the company that administers all of the fine folks in Washington's Retirement prog. for one thing and for another there are several people in mngmt at AIG with ties to Obama and others in the administration.

Our fine Prez took more than 150K from AIG board members in campaign contributions.

[Brent]

AIG is just an example of out of touch CEOs. Nothing new here. Everyone is just pissed because the government has stake in the company now. Too bad they aren't as angry at the fact that the GOVERNMENT has control right now....

Our fine Prez took more than 150K from AIG board members in campaign contributions.

Imagine that.... a President taking contributions from shady people. That's never happened before.

[raymond8698]

Originally Posted by 2k4mk1

They wont let AID fail becuz they are the company that administers all of the fine folks in Washington's Retirement prog. for one thing and for another there are several people in mngmt at AIG with ties to Obama and others in the administration.

Our fine Prez took more than 150K from AIG board members in campaign contributions.

only 150,000,that is small potatoes to what he bailed them out with,geez man hearing about this makes me wonder,are we really gonna get out of this so called recession if you keep on bailing out idiots that dont know what the f*** they are doing,one Obama aide said we will be out of the recession by the end of the year,yeah f***** right

[95 GTS]

Originally Posted by VMT

Of the 165 million paid out in bonus $$,7 people recieved a million dollars in bonus money and one person recieved 3 million.What is his job?What does he do that warrants a 3 million $$ bonus!?The bonuses were paid out last Friday,its to late to do anything to try and stop the payout.I read and saw on the evening news last night that a few of the bonus recieptients have given back "part" of the bonus,but most everyone kept them.AIG has recieved more government help than any other company,GM is about to go tits up and the good folks @ AIG are cashing million $$ bonus checks.Even when taking a government handout,taxpayer money,our money,corporate america still find a way to put it in and snap it off.

actually

1 person 6.4 million +
6 @ 4 million+
15 @ 2 million +
51 @ 1 million +

11 of these people who received retention bonuses were people no longer with the company :headscratch:


Obama and the government Feel like they just gave a nice gesture of 10 bucks to a Bum that turned around and got in their Escalade parked around the corner.

Now they have to figure out how to legally recoupe the money in a way that wont violate the constitution which prevents the government from unfair taxation such as the levies that britain placed on US 250 years ago.


It is a sticky situation. They just cant tax one company's members. They have to figure out a way to tax all poorly performing companies that have bonused their Upper management. Which is ironic in the first place unless it is part of a contractual guranteed compensation which many CEOs VPs may have.

Of the top of my head the only way to do it with out completely violating the constitution would create some luxory tax like the one placed on baseball teams. Again, this is shaky ground.

[Brent]

Here is a good article on it: Stop this nonsense about AIG bonuses - Let them keep it.

[bucho]

[95 GTS]

Such crazy ideas. People are so pissed that 160 million went out to bonuses. Thats like 50 cents for every american. When is the last time you dropped a dime or a hand full of change and didnt find all of it because it rolled under the coke machine?



It is like a witch hunt now. Even michael eisner of disney is getting scrutinized for his executive benefits that havent even been paid! stockholders are wanting a review of all their benefits. Especially noted was his golden Coffin provision that pays his family 4.6 million when he dies.

Are you kidding me? 1. he is not dead or dying any time soon. 2. It is just a life insurance policy that the company makes probably 20k a year in premium payments too. Big deal!

[bucho]

Zombie Company

1. A technically bankrupt company that is kept alive with large infusions of government money for the sake of "stability" in the U.S. financial system. 2. A large financial company with negative net worth that continues to operate, despite having no clear path to solvency. 3. The UnDead of Wall Street.

"AIG is the premier example of a zombie company -- kept alive only by $120 billion in federal bailout money. Apparently, it's considered too large to fail."



..............

[thesource]

What pisses me off is that the government is the one screaming the loudest about these bonuses yet they are the ones that allowed it to begin with . The sorry SOB's have been in bed with AIG for some time now .

[Superman750]

Originally Posted by 95 GTS

Thats like 50 cents for every american. When is the last time you dropped a dime or a hand full of change and didnt find all of it because it rolled under the coke machine?

This may be true, but what happens when nothing is done about this? Then another company sees, "hey it worked for them, why not do it ourselves?" Then the whole $800B is spent just on bonuses. And what will happen when the other $3.6 Trillion is given out by the government over then next 3 years? Personally I dont feel like paying money that I shouldn't have to pay to give some jackass in a high position a 6 million dollar bonus for doing his job.

[95 GTS]

Originally Posted by Superman750

This may be true, but what happens when nothing is done about this? Then another company sees, "hey it worked for them, why not do it ourselves?" Then the whole $800B is spent just on bonuses. And what will happen when the other $3.6 Trillion is given out by the government over then next 3 years? Personally I dont feel like paying money that I shouldn't have to pay to give some jackass in a high position a 6 million dollar bonus for doing his job.

News flash, the companies are still bonusing their key employees. Your logic is skewed. AIG bonused less than .1% of their actual government stimulus.

So 800Billion couldnt possibly be spent on bonuses, not to mention its no where near 800 billion that is actually going to companies.

It's science.

[thesource]

None the less , its still rewarding people for producing shitty results . I understand contracts are contracts and they should be honored in most cases . In this case , I feel like any business that accepts bail out money should be looked at like a BK situation . All contracts and obligations should be reviewed by a judge to determine whether they stand or not .

[95 GTS]

FYI the house is about to vote on whether to Tax exective bonuses of companies that received a certain $$ amount of bailout money.

This house of representatives, not house the Fox character, in case anyone is confused.

[95 GTS]

Originally Posted by thesource

None the less , its still rewarding people for producing shitty results . I understand contracts are contracts and they should be honored in most cases . In this case , I feel like any business that accepts bail out money should be looked at like a BK situation . All contracts and obligations should be reviewed by a judge to determine whether they stand or not .

Unfortunately it takes ch 11 to do that.

Coughgmcough

[thesource]

I don't think GM will chapter 11 . I could be wrong but I just don't see it .

[XavB]

off topic...but if GM files for bankruptcy, will they still be required, or are they even required right now, to pay the money they received in the bailout back? if they don't have to pay it back, that would be pretty f'd up being that they were given the money and nobody even bothered to look into if they money would actually help them out. like when you apply for a loan, you won't get approved if you can't pay it back.

[95 GTS]

Their CEO is on record the past few days as saying he doesnt think it is such a bad idea anymore. I think he sees the profits that can actually be made once they reorganize.

Think about all the improvements we could see in cheap american cars and the profits that can be made on the already profitable.

[95 GTS]

Originally Posted by XavB

off topic...but if GM files for bankruptcy, will they still be required, or are they even required right now, to pay the money they received in the bailout back? if they don't have to pay it back, that would be pretty f'd up being that they were given the money and nobody even bothered to look into if they money would actually help them out. like when you apply for a loan, you won't get approved if you can't pay it back.

under bankrupcy the creditors have one of the first rights. The government didnt just hand them a sack of cash. And in some of these bailout situations they actually aquired stock of the company.

[XavB]

ok got it.

[thesource]

We would still have the unions to deal with . If Bush or a republican was in office , chances are they would have already filed . Obama made a lot of promises to the unions and in return they voted for him .

[Superman750]

Originally Posted by 95 GTS

News flash, the companies are still bonusing their key employees. Your logic is skewed. AIG bonused less than .1% of their actual government stimulus.

So 800Billion couldnt possibly be spent on bonuses, not to mention its no where near 800 billion that is actually going to companies.

It's science.

My logic is skewed? .1% is .1% too much. If you think that .1% is ok, where does it stop? 1%? 10%? 50%? It is the fact that they are paying bonuses after they received the money. I understand that the 800B isn't going all towards companies, I was just making a point.

[95 GTS]

No you werent, and obviously what I said was over your head.

[Mustang_68_Coup]

What I find amazing about all of this is that they (the Executives who are receiving the bonuses) are being given bonuses of something like 3x their salary [something I've never received in my life!!!] and that even after they have ridden the company into the ground - they are still receiving a BONUS!

What skewed logic...

• I get rewarded when I DO WELL, not when I fuck up!
• And when I get rewarded it is a very small amount, 1/52 or 1/26 of my salary.

How can they justify that their scale of bonuses are so different from the Rest Of the Real World?

[95 GTS]

No that is pretty normal in the larger cap corporate world of assistant VPs, CEOs, etc etc.

there is salary and what is referred to as guranteed compensation. Then beyond that if they do very well they would have a very large bonus, sometimes 20x salary. For examples, Costco's ceo and the big 3 CEOs.

Costco CEO's compensation package totals $3.2 million

The Associated Press

SEATTLE - Staying true to the company's reputation for keeping costs low, Costco Wholesale Corp. President and Chief Executive Officer Jim Sinegal was paid far less this year than his CEO peers, getting no raise for a seventh consecutive year.

Sinegal, 71, received compensation the company valued at nearly $3.2 million in 2007, according to a proxy statement filed Tuesday with the Securities and Exchange Commission. That's far less than the $8.3 million median pay for chief executives in 2006 calculated by The Associated Press.

While Sinegal remains one of the lowest-paid CEOs of a Standard & Poor's 500 company, he's no pauper. He owns Costco shares worth $165.11 million at Tuesday's closing price of $68.45, as well as options to buy another 1.12 million shares.

For fiscal 2007, which ended Sept. 2, Sinegal received a $350,000 salary, an $80,000 bonus, stock awards and options worth about $2.6 million, and roughly $68,500 in perks, including company matches for retirement contributions, life insurance, health care premiums and a vehicle allowance.

In Tuesday's filing, Costco noted cash bonuses paid to CEOs at peer companies are substantially higher but that the company's compensation committee "wishes to respect Mr. Sinegal's wishes to receive modest compensation, in part because it believes that higher amounts would not change Mr. Sinegal's motivation and performance."

In 2006, Sinegal declined a $200,000 bonus - the maximum the company allows - after taking responsibility for errors in the company's stock-option grants to employees.

Chairman Jeffrey Brotman, 65, earned the same salary and bonus as Sinegal in 2007, but his total compensation came in slightly higher because he has opted to defer more of his pay than Sinegal, so the total interest on that pay is greater.

Like many companies, Costco lets executives set aside a chunk of their earnings, and that pot of money accrues interest at a rate higher than a traditional bank account would pay.

Total pay includes executives' salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards.

I remember when the big 3 were at their hearing, one of the CEOs agreed to cut his salary from 1million plus to 1 dollar. This didnt matter at all to me because his total compensation for the year prior was 26 million.


The difference is, Costcos CEo is taking the majority of his compensation in stock options as opposed to a bonus. Read that article. He refused a 200k bonus when he felt he had caused an error in the ESPP.

Despite all of this, It doesnt make sense to Bonus cash when your company has done poorly. Bonus in stock options so the Members have incentive to make the company powerful again.

[CraZy6]

Originally Posted by thesource

What pisses me off is that the government is the one screaming the loudest about these bonuses yet they are the ones that allowed it to begin with . The sorry SOB's have been in bed with AIG for some time now .

Absolutely true, Obama administration put the plan together for the bail out for AIG and they all signed it and it stipulated bonuses in the contract for the bail out. Why are they mad, they signed it. They didn't even read the whole document.

[Brent]

Originally Posted by CraZy6

Absolutely true, Obama administration put the plan together for the bail out for AIG and they all signed it and it stipulated bonuses in the contract for the bail out. Why are they mad, they signed it. They didn't even read the whole document.

No one reads bills. That's why we have the patriot act.

[CraZy6]

Originally Posted by Brent

No one reads bills. That's why we have the patriot act.

I have nothing to hide!

[Brent]

Originally Posted by CraZy6

I have nothing to hide!

It's nice to see you care only about certain rights in the constitution and not all of them.