A Bonus Too Far
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From: Kennesaw, Ga. USA
A Bonus Too Far
A play on words, of course.
According to NY AG Cuomo, 73, SEVENTY THREE, AIG employees received a bonus check yesterday for over $1 million dollars each.
From what I was able to get from various news sources, there were several reasons those bonuses were paid.
1. They were included in a Legal Contract written in March 2008 when the problems within AIG were already well known.
2. According to what I have read, they were in the main Bonuses paid to retain the individuals involved in the Division in London responsible for the so called "derivatives market" that AIG created. The theory/reason for the bonuses seems to be that only these folks understood what they had created and had to be kept on board to help AIG unwind the whole scheme.
They failed.
3. Even so, since they were legal contracts, AIG had to pay them.
To continue, it is now also known that AIG paid out the most part of the Bailout Money given to them so far to various Banks in the US and overseas to cover the insurance claims on those very same "derivatives" that went sour, which was also a legal requirement. That is what AIG does in it's normal insurance business.
I may have this wrong to a degree, I am not a financial expert, but I think I have those parts fairly well right.
Cuomo's subponea seems to indicate that 11 out of the 73 are no longer with the company, or 15% of them, and my simple mind says if you bail out you don't get the retention bonus or any bonus.
Of more interest to me is the theory in the attached article that seems to say that without the Taxpayer bailout money, the bonuses could not have been paid, They certainly could not have been paid out of AIG current cash flow. DUUUUH, says my simple mind, the contracts may well be invalidated based on that fact alone.
It seems that Pres. Obama is going to fight this through the courts if necessary and I certainly hope so.
Perhaps Screw50's post is the right way to go, fall on your sword, AIG executives.
Bill
http://money.aol.com/news/articles/_...bonuses/384861
Then again, I am not a Lawyer, just a taxpayer.
According to NY AG Cuomo, 73, SEVENTY THREE, AIG employees received a bonus check yesterday for over $1 million dollars each.
From what I was able to get from various news sources, there were several reasons those bonuses were paid.
1. They were included in a Legal Contract written in March 2008 when the problems within AIG were already well known.
2. According to what I have read, they were in the main Bonuses paid to retain the individuals involved in the Division in London responsible for the so called "derivatives market" that AIG created. The theory/reason for the bonuses seems to be that only these folks understood what they had created and had to be kept on board to help AIG unwind the whole scheme.
They failed.
3. Even so, since they were legal contracts, AIG had to pay them.
To continue, it is now also known that AIG paid out the most part of the Bailout Money given to them so far to various Banks in the US and overseas to cover the insurance claims on those very same "derivatives" that went sour, which was also a legal requirement. That is what AIG does in it's normal insurance business.
I may have this wrong to a degree, I am not a financial expert, but I think I have those parts fairly well right.
Cuomo's subponea seems to indicate that 11 out of the 73 are no longer with the company, or 15% of them, and my simple mind says if you bail out you don't get the retention bonus or any bonus.
Of more interest to me is the theory in the attached article that seems to say that without the Taxpayer bailout money, the bonuses could not have been paid, They certainly could not have been paid out of AIG current cash flow. DUUUUH, says my simple mind, the contracts may well be invalidated based on that fact alone.
It seems that Pres. Obama is going to fight this through the courts if necessary and I certainly hope so.
Perhaps Screw50's post is the right way to go, fall on your sword, AIG executives.
Bill
http://money.aol.com/news/articles/_...bonuses/384861
Then again, I am not a Lawyer, just a taxpayer.