AIG spends Bailout $ on bonuses

[SuBe]

They should go ahead and leave. Selling insurance has high turnover rates, and for every person that leaves there's about 20 or so waiting to replace them

And, if you find a Great employee that does an amazing job? Then what? How do you keep that employee?

 

[Addendum]

If the company is losing money left and right, then it doesn't matter

 

[amazingfantasy15]

And, if you find a Great employee that does an amazing job? Then what? How do you keep that employee?

You keep talking about these great employees, but a great employee doesn't lose their company money on such an epic level. If you lost your company say $10,000 (a drop in a bucket compared to the money AIG lost), do you think you deserve a bonus? Are you a great employee?

 

[Paradoxium]

Good news, instead of working towards a bonus and getting all the populism outrage, the bailout companies are going to potentially raise the base salaries. Woooo law of unintended consequences in full swing. So basically the government managed to "regulate" the bailout companies into raising their pay, how ****ing brilliant

In response to expected bonus restrictions, officials at Citigroup Inc., Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees, people familiar with the situation said.....

The discussions are at an early stage, partly because the government hasn't yet issued specific rules on the bonus payments that will be allowed at companies that received TARP aid. The talks also are proceeding cautiously because of the political volatility of pay, bonuses and perks on Wall Street, including outrage over American International Group Inc.'s promise to pay $450 million in bonuses to employees in the insurer's financial-products unit.

Most traders and bankers on Wall Street get a base salary of anywhere from $200,000 for managing directors to $1.5 million for a chief executive. But the lion's share of their pay comes in the form of a bonus, a tradition that began when most firms were private partnerships and partners shared directly in the annual income of the firm.

As banks and securities firms wrestle with growing regulation of compensation practices, substantially increasing the base salaries of top employees could become a popular response, some industry officials say. A larger salary would reduce the relative importance of bonuses but also help financial companies increase those payments, since they usually are calculated as a percentage of total annual compensation.

This whole thing is all sorts of epic fail

 

[SuBe]

Then you sentence them to death. Believe me, I was all against the Bailouts from the begining. But, since we are here, we have to allow the Companies to retain its employees that actually produce. If they lose them, then they fail. But, not by their own stupidity, but the Government's.

 

[SuBe]

You keep talking about these great employees, but a great employee doesn't lose their company money on such an epic level. If you lost your company say $10,000 (a drop in a bucket compared to the money AIG lost), do you think you deserve a bonus? Are you a great employee?

Can you tell me if these employees are the ones that lost the company money, or the ones that earned the company money?

 

[Addendum]

Then you sentence them to death. Believe me, I was all against the Bailouts from the begining. But, since we are here, we have to allow the Companies to retain its employees that actually produce. If they lose them, then they fail. But, not by their own stupidity, but the Government's.

And all the employees could produce was a loss. Bunch of winners there

 

[amazingfantasy15]

Can you tell me if these employees are the ones that lost the company money, or the ones that earned the company money?

Can you tell me the employees receiving the money are the ones the made the company money? How many can there really be though, considering the company lost $60 billion in one quarter.

 

[Lighthouse]

How is "Doing a good job" going to make these employees stay there instead of going and finding other work?

By how the economy is? Where are they going to go thats "better"?

 

[amazingfantasy15]

By how the economy is? Where are they going to go thats "better"?

Hell, in a good economy how many companies are you going to find that consider you a great employee for helping them lose $60 billion.

 

[SuBe]

By how the economy is? Where are they going to go thats "better"?

Any of the other companies that isn't hindered by the restrictions of being tied to the Government because of the Bailout.

Let me ask you all this, why are we complained about this, 1/10 of 1% of the Bailout to retain employees, when the average earmark for a pet project in Washington costs MORE than this? And the Omnibus Spending Bill has nearly 9000 other examples far worse than this.

 

[Lighthouse]

Look, I realize that they were contractually obligated to give these bonuses, so maybe AIG didn't have a choice, but I honestly don't understand how you set out to give a bonus before you even make a profit? Why the hell are bonuses contractually obligated in the first place? I'm not a business major, so maybe someone can explain this to me.

 

[Lighthouse]

Any of the other companies that isn't hindered by the restrictions of being tied to the Government because of the Bailout.

Let me ask you all this, why are we complained about this, 1/10 of 1% of the Bailout to retain employees, when the average earmark for a pet project in Washington costs MORE than this? And the Omnibus Spending Bill has nearly 9000 other examples far worse than this.

Never said those weren't wrong either. I was discussing the issue at hand.

 

[SuBe]

Look, I realize that they were contractually obligated to give these bonuses, so maybe AIG didn't have a choice, but I honestly don't understand how you set out to give a bonus before you even make a profit? Why the hell are bonuses contractually obligated in the first place? I'm not a business major, so maybe someone can explain this to me.

You have been hired by AIG, you contract states you are going to be paid a base Salary of $15,000 a year (divided into 26 equal parts per pay period), and a Bonus of 5% of every dollar you bring into the company. At the end of the year you receive on your final Paycheck, 5% of everything you bring in. It could be a ton, or it could be almost nothing, but your pay is determined by your productivity. You brought the company $10 Million of new business, that is $500,000 Bonus. You get, for the end of the year $515,000 in Wages for working for AIG.

The other guy, in the cubile next to you, is hired at $15,000 and the same deal, 5% of what he brings in to the company. He loses $25 Million for the company because his customers left for other insurance firms.

The Company lost $15,000,000 at the end of the year, but handed out a 1/2 Million in Bonuses.

Then, there are people in the media and posters on a site that do not understand the business structure demanding Heads Roll. The guy that did a good job deserves a bonus, the other guys deserves to be fired.

 

[Addendum]

So then the company loses 15.5 million

 

[SuBe]

No. Wages are considered Costs of Doing Business, and not counted as a loss.

 

[Addendum]

But they're still giving money that they don't have

 

[SuBe]

So's the Government.

 

[Addendum]

Every single government gives away money that they don't have.

 

[chaseter]

Here is the even funnier thing...Dodd put a paragraph in the stimulus bill that says that all bonuses before Feburary 2009 are legal and to be paid. The top two people that AIG sends campaign money to are Dodd and Obama. This is just hypocritic nonsense.

 

[SuBe]

There was a Paragraph in the First Bill Ratified buy Congress that stated that Government can not infere in the Contracts between two individuals. That Bill is called the Constitution.

 

[chaseter]

They should have had oversight into what these companies would do with the tax payer's money they throw at them. They don't do it, and they are shocked by this? Money goes to foreign banks and bonuses and they are shocked Them going after AIG for this is just a show for the voter.

 

[SuBe]

Exactly, it's just the Politicians trying to be more favorable than Private Business. They are trying to ensure their votes at the expense of the Individual.

 

[Daisy]

You have been hired by AIG, you contract states you are going to be paid a base Salary of $15,000 a year (divided into 26 equal parts per pay period), and a Bonus of 5% of every dollar you bring into the company. At the end of the year you receive on your final Paycheck, 5% of everything you bring in. It could be a ton, or it could be almost nothing, but your pay is determined by your productivity. You brought the company $10 Million of new business, that is $500,000 Bonus. You get, for the end of the year $515,000 in Wages for working for AIG.

The other guy, in the cubile next to you, is hired at $15,000 and the same deal, 5% of what he brings in to the company. He loses $25 Million for the company because his customers left for other insurance firms.

The Company lost $15,000,000 at the end of the year, but handed out a 1/2 Million in Bonuses.

Then, there are people in the media and posters on a site that do not understand the business structure demanding Heads Roll. The guy that did a good job deserves a bonus, the other guys deserves to be fired.

Also, I think people are not understanding that these "bonuses" are based on revenue brought into the company, not company profit. There's a huge difference. It's entirely possible for everyone to bring in revenue, but the company still to not make a profit or even lose money.

I think it would help understanding more if they were described as "commissions" that are part of the compensation package, rather than "bonuses".

 

[chaseter]

I also liked how Obama told Geitner to get to work on legally attacking AIG when Geitner doesn't even have a staff. I guess Geitner doesn't have anything better to do all alone in his office.