Pitchforks to the right, torches to the left

March 14, 2009 10:55 PM

Washington Post reports that the American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year. The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses.
posted by dejah420 (93 comments total)

now what?
posted by emhutchinson at 10:57 PM on March 14, 2009 [2 favorites]

If it's any meager consolation, as our Treasury continues to be looted, those bonuses will soon be paid in the equivalent of Bush Dollars.
posted by Blazecock Pileon at 11:00 PM on March 14, 2009

Editorializing: Perhaps it's time to borrow a page from the French revolution? How else are we going to stop this systematic and rampant highway robbery of the American public? Their threat seems to be "give us all your money or we'll bring the system crashing to it's knees?"

I'm thinking a couple of guillotines set up on Wall Street, and we'd see some responsible banking pretty darn quickly. Then again, perhaps that's just the nyquil talking...
posted by dejah420 at 11:01 PM on March 14, 2009 [4 favorites]

AIG Chairman Edward 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. Liddy said in his letter that "quite frankly, AIG's hands are tied."

Uh-huh.

A white paper prepared by 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.

Righty-right.

The Treasury Department determined that the government did not have the legal authority to block the current payments by the company.

Oh snap.
posted by netbros at 11:04 PM on March 14, 2009 [1 favorite]

Is it legal to publicize the names and contact information of those who accept the bonuses?
posted by Krrrlson at 11:11 PM on March 14, 2009 [11 favorites]

See...the lawsuit thing...I freaking DARE those executives to go to trial. Dare them. That means they have to show their faces. Come on big boys, come whine at the courthouse where the people can see you.

Sure, they might win...but in the meantime, their faces will be plastered all over the media. You want the money, you suit-shaped-hole in the universe? Show your faces. Come out here where we can see you scurry.

I'll be the one with the barrel of tomatoes.
posted by dejah420 at 11:15 PM on March 14, 2009 [36 favorites]

Just curious here, but shouldn't someone governmenty be asking these companies what kind of "contractual obligations" they have before giving them taxpayer monies?
posted by silkygreenbelly at 11:15 PM on March 14, 2009

“We cannot attract and retain the best and the brightest talent to lead and staff the A.I.G. businesses — which are now being operated principally on behalf of American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.

--Edward M. Liddy, the government-appointed chairman of A.I.G, in today's NYT

If you don't pay your best people, you will destroy your franchise.

--John Thain, CEO of Merrill Lynch, in an interview with Maria Bartiromo.

these words -- "talent" and "best" -- i do not think they mean what you think they mean.
posted by Hat Maui at 11:19 PM on March 14, 2009 [34 favorites]

Eh. So we're talking, what? 0.1% of the bailout money? I don't see how this matters. There are bigger issues in play.
posted by mr_roboto at 11:22 PM on March 14, 2009 [2 favorites]

Why is no one from AIG going to jail? We've known for four years that they were run like Enron, and it's been obvious for at least six months their books were cooked.

Given that they're just a corrupt CDS chop-shop, and the bailout money they've received has gone out their backdoor and to the banks, why not let them fail and jail their executives?

The banks are equally corrupt and insolvent, but at least there is some argument to keeping them afloat. The arguments for propping up AIG seem thinner by the day. Are scolding Jim Cramer and demanding that AIG "play fair" really all that's going to come of the financial mess. All the criminals are getting away.
posted by ornate insect at 11:22 PM on March 14, 2009 [4 favorites]

Good, this will be the straw that breaks the camel's back and we can start nationalizing these fuckers. Joe Conservative and the other anti-nationalization people should be ashamed.
posted by damn dirty ape at 11:24 PM on March 14, 2009

it might be only .1% of the bailout money but its almost all of the federal monies AIG has been provided. If I were a CEO at another bailed out company I would be watching this case very closely.
posted by Glibpaxman at 11:31 PM on March 14, 2009 [1 favorite]

Joe Conservative has no shame, and you've no idea how strong that camel is.
posted by carping demon at 11:32 PM on March 14, 2009 [1 favorite]

it might be only .1% of the bailout money but its almost all of the federal monies AIG has been provided.

Maybe I'm misunderstanding something. This post says AIG has received $170 billion in federal money. Is this not the case? Are those just loan guarantees or something?

What are AIGs typical annual operating costs? I'm guessing $300 million is a small fraction of this number, too.
posted by mr_roboto at 11:36 PM on March 14, 2009

$55 million divided by 400 is $137,500 apiece. They need more fucking bonus money than that? Get the ladders on the lampposts and ready the ropes already.
posted by maxwelton at 11:41 PM on March 14, 2009 [5 favorites]

oops.

billion/ million mistake.
posted by Glibpaxman at 11:41 PM on March 14, 2009

If they want to blow the money and fail, isn't that their right?

Oh, right...
posted by furtive at 11:42 PM on March 14, 2009

Exactly what kind of retarded business hands out "bonuses" for totally fucking up and destroying their livelihood?

Also, if something is contractually agreed upon, is it even a "bonus?" Why not call it what it is, which is (preposterously stupid amounts of) "salary?"
posted by maxwelton at 11:44 PM on March 14, 2009 [6 favorites]

A Google Maps project may follow: Here is a list of AIG executives. Let's hunt down their home addresses and telephone numbers.
posted by Blazecock Pileon at 11:45 PM on March 14, 2009 [4 favorites]

A Google Maps project may follow: Here is a list of AIG executives. Let's hunt down their home addresses and telephone numbers.

So that you can physically injure or kill them and their families?

I just want to be clear here. Other people have discussed lamp posts and rope and torches and pitchforks. Are you just kidding, or do you really (like seriously, really) want to hurt these people?
posted by mr_roboto at 11:48 PM on March 14, 2009

Similar problem in the UK. Most famous at present is the former boss of the Royal Bank of Scotland, Sir Fred Goodwin, getting a huge contractually obligated retirement package that seems unwarranted. Apparently people have now realised that they perhaps should have fired him instead of offering early retirement.
posted by theyexpectresults at 11:50 PM on March 14, 2009

While AIG execs sue each other, while Goldman Sachs and Deutsche Bank feed from the AIG trough, while AIG is run by criminals, and its corruption is still largely unexposed, will we see any real investigations of financial crime, in order to uncover the entire Madoff culture at work here, or just grandstanding?
posted by ornate insect at 11:52 PM on March 14, 2009 [1 favorite]

I wish Americans watched soccer just so we could see AIG plastered all over the Man U jerseys every second. It boils my blood to see it and I start screaming about where's the revolution? Isn't anybody seeing this?! And then I remember that no, they aren't.
posted by birdie birdington at 11:54 PM on March 14, 2009 [1 favorite]

boinked link fixed: AIG execs sue each other
posted by ornate insect at 11:54 PM on March 14, 2009

Are you just kidding, or do you really (like seriously, really) want to hurt these people?

I don't know if I want them to get hurt, but I think rich people in general tend to live under the expectation that they are above any consequences for the pain and misery they cause in millions of other people's lives. If a Google Map publicizes who these criminals are and where they live, and if that device really makes them just slightly nervous and cognizant of their own behavior, that wouldn't be the worst thing in the world to happen, IMO.
posted by Blazecock Pileon at 11:55 PM on March 14, 2009 [12 favorites]

Hey, here's a crazy idea. Really insane. Blow-your-socks-off, I-can't-believe-what-I-just-heard nutball idea.

If you did a bad job, which you did, you don't get a bonus at all!

I KNOW. IT'S WACKY. STAND BACK. But if I do a terrible job at work, I won't get a bonus. How are these assholes different? Oh, they're the "best and brightest talent". Guess I'm not as good at managing money as they are.
posted by Mikey-San at 12:02 AM on March 15, 2009 [3 favorites]

That companies believe they have to pay out these bonuses to keep their ~top talent~ is a consequence of a lack of proper regulation like all of this shit. I almost don't want to hate on any of the finance people involved whether in banking or insurance because I more or less see them as completely self-interested actors anyway so I expect them to do anything possible to make money, even risking the collapse of the world economy for it. I'd rather hate on the post-Reagan government actors that didn't understand their role in keeping a lid on the kinds of schemes that led to the current crisis. But you know, economic growth means you're doing a good job governing!
posted by palidor at 12:06 AM on March 15, 2009

This pisses me off in so many ways. I have a bonus in my contract, but it's linked to company and personal performance. I know for goddamn sure that if my business unit caused the company to have record losses (let alone helped bring down the economy), then no one would be getting any bonus, 'personal perforance' included.

And re physical harm: not at all. But I wouldn't say no to some well placed rotten eggs or perhaps property defacement.
posted by pivotal at 12:11 AM on March 15, 2009

Yeah, seriously, where are these guys going to go? Retention, my ass.
posted by iamkimiam at 12:14 AM on March 15, 2009

Business Week has a lot of info on who runs AIG, who controls the compensation committee, etc. Also, annual filings report who got paid what, and how much is outstanding in options and so forth.

You can also get a free copy of their annual report here, take a gander at all the insider selling of AIG stock here, and view at your leisure the list of "key" executives and their compensation. These key figures, of course, being the ones who have looked upon the American tax payer and said: "Yeah...dis is a nice economy you gots here. It would be a shame if something was to happen to it. Now, pay your protection money, or my friend here is gonna get ugly."
posted by dejah420 at 12:17 AM on March 15, 2009 [17 favorites]

dejah420 thank you for posting this
posted by humannaire at 12:18 AM on March 15, 2009

I dunno, I wouldn't physically hurt them, but I wouldn't jump between them and an angry mob, either.

Might be fun to crush them, see them driven them before me, hear the lamentation of their women (or, in some cases, stay-at-home husbands). You know, good clean fun.

It would certainly put the fear of the vox populi back in the hearts of other, similarly feckless executives.
posted by StrangeTikiGod at 12:18 AM on March 15, 2009 [4 favorites]

I assume these contracts were signed in London, right? Just fire everyone and shut down the London office, and then let the case languish in the courts for years. I bet we could exert enough pressure on the British to keep the case on the back burner, and ultimately is a jury really going to award them any money? I'd much rather see the cash go to barristers (who would no doubt drive to court in their lorries!) then AIG douches.

Is it legal to publicize the names and contact information of those who accept the bonuses?

I doubt it. Plus they all live in London (or at least work there)

Why is no one from AIG going to jail? We've known for four years that they were run like Enron, and it's been obvious for at least six months their books were cooked.

See, AIG was smart. Rather then just break the law, they hired lobbyists to rewrite the laws to preemptively legalize their crazy schemes. Enron was fucking amateur. They did get California to "deregulate" their electricity monopoly, which they then used to cause blackouts and rape state though. So I'll give them that.

Eh. So we're talking, what? 0.1% of the bailout money? I don't see how this matters. There are bigger issues in play.

This is a good point. People are freaking out about small things like corporate jets and bonuses while hundreds of billions of dollars are going out the door to prop up companies that blew themselves up, and mostly that goes to benefit their bondholders and counter parties. AIG's stock is worthless, but Goldman Sachs has gotten billions from the government's AIG bailout.
posted by delmoi at 12:24 AM on March 15, 2009 [3 favorites]

Anyway, people need to stay mad about this shit because it's FUCKING RIDICULOUS
posted by delmoi at 12:26 AM on March 15, 2009 [10 favorites]

Bread to the left Circuses to the right.
165 Million is a couple of hour's worth of interest on the money already stolen.
posted by fullerine at 12:35 AM on March 15, 2009

Are u sure it was $170 billion they got? That would be 1/4 of the total bailout money?!
posted by Smaaz at 12:38 AM on March 15, 2009

Best and brightest my ass.

Corporate jets? Company cars? Bonuses? Shit. These assholes should be flying coach, driving their own asses to work in used Honda Civics, and thanking God they aren't in prison.

The real "best and brightest" have lost their jobs and retirement funds because of these puling brats.
posted by louche mustachio at 12:50 AM on March 15, 2009 [5 favorites]

Delmoi, I could be wrong, but I'm pretty sure that the contracts are within the perview of American law and not British law, as the financial group was a wholely owned subsidiary, and not an independent business unit. I, of course, could be completely wrong, but I believe that American law is the trump card with AIG currently.

This whole thing is such a brilliant example of Lemon Socialism, which is to say: Socialism for the rich and capitalism for the poor.

I'm furious about this whole thing. Furious. There is absolutely no excuse to pay bonuses to these people. Bonuses are for when people do *good* things, not for when they fuck the entire economy. When they fuck the entire economy and then try to claim a bonus...then those wastes of carbon shouldn't be real surprised by the vigilante mob outside with the rails and tar and feathers. I'm just saying.

I have an idea. They can have their bonus, if we do it "Magic Christian" style. We fill a giant swimming pool with effluvia and sewer trappings. Put their bonuses at the bottom before the pool is filled up. They want the money that bad, they can swim through shit to get to it.

Hey, if they're going to ruin life for us, and our kids, at the very least, we should get a public spectacle out of it. Seriously, what sort of asshole thinks they deserve a bonus on top of their 7 million dollar salary after this sort of financial fiasco? The sort of subhuman who is willing to swim through shit to get one more dollar. At least entertain me if you're going to hold me hostage.
posted by dejah420 at 12:52 AM on March 15, 2009 [4 favorites]

If you don't pay your best people, you will destroy your franchise.


Why is it that every other position in this country is in danger of disappearing no matter how pro they are (see outsourcing and day laborers) but this is NOT the case (seriously, EVERY domestic position there is from Berry-Picker to Coder to Physics Professor) EXCEPT Banker?

Why are they immune?
posted by sourwookie at 12:56 AM on March 15, 2009 [1 favorite]

From the New York Times, The Looting of America's Coffers, on why bailouts are a bad idea.

One great quote:

Either way, the bottom line is the same: given an incentive to loot, Wall Street did so. “If you think of the financial system as a whole,” Mr. Romer said, “it actually has an incentive to trigger the rare occasions in which tens or hundreds of billions of dollars come flowing out of the Treasury.”
posted by Malor at 1:04 AM on March 15, 2009

Why are they immune?

Because we're addicted to debt, and they're the dealers.
posted by Malor at 1:05 AM on March 15, 2009 [3 favorites]

Wow. I should clarify.

Surely someone else could do a better job for less. Job it out to some brown-skinned third world types that will slave for a mere 5 million a year with no bonus and be genuinly sorry should their performance falter.

Really, if we're truly looking after bottom line the savings could be incredible.
posted by sourwookie at 1:10 AM on March 15, 2009

Why is it that every other position in this country is in danger of disappearing no matter how pro they are (see outsourcing and day laborers) but this is NOT the case (seriously, EVERY domestic position there is from Berry-Picker to Coder to Physics Professor) EXCEPT Banker?

Why are they immune?

Because they own us.
posted by benzenedream at 1:36 AM on March 15, 2009

Liddy still doesn’t get it - if the sole reason those “talented” staff stay with you is because you offer even only one dollar more than your competitor, if that’s all there is to it, then you’re doing it wrong. Because these guys will be guaranteed to stab the company in the back if that increases their bonus by one dollar. You will not be able to build a healthy company with them on board, regardless of their talent.

There is of course a reason Liddy doesn’t get it - he’s one of them.
posted by DreamerFi at 1:47 AM on March 15, 2009 [2 favorites]

It seems to me that if AIG had gone into receivership, then these contracts wouldn't be enforceable.
posted by mikelieman at 2:00 AM on March 15, 2009

Correct me if I'm wrong, but the government has no contractual obligation not to tax these bonus at, say, 200%.

And Democrats have a majority in the House and Senate, yes?

Of course, these executives could turn down the bonuses rather than pay additional taxes of twice the amount of their bonus.
posted by orthogonality at 2:04 AM on March 15, 2009 [1 favorite]

mr_roboto, my lampposts line was somewhat rhetorical, but I'll tell you what, people have been strung up for much less than what these scumbags have perpetrated on the common folk. This stuff should make everyone furious, and calls, emails and letters should be pouring into your elected reps' offices with the message: not with our fucking money.
posted by maxwelton at 2:51 AM on March 15, 2009

A Google Maps project may follow: Here is a list of AIG executives. Let's hunt down their home addresses and telephone numbers.

So that you can physically injure or kill them and their families?

I just want to be clear here. Other people have discussed lamp posts and rope and torches and pitchforks. Are you just kidding, or do you really (like seriously, really) want to hurt these people?

No no. Nobody here is advocating that we hurt or harm these people in ANY way. I mean people might be saying that if these white collar criminals were fighting each other in the streets, intervention may not happen. I can understand that. Why put your life on the line to save another life? That's a religious decision if I've ever heard one.

MeFites aren't about violence.

BUT...maybe...just maybe some really really motivated souls could do something like this. And then they can leave IF the police tell them they are doing something that might violate some local ordinance. I mean there's so many in so many places, I kinda forget what to do where. But I ALWAYS comply when law enforcement tells me to do something.

Anybody got a spare bus, a mobile internet connection, and some old furniture they want to donate to these execs?

Is it me, or does this sound like a meetup?
posted by hal_c_on at 3:07 AM on March 15, 2009 [1 favorite]

I wonder if anyone else here has noticed how these stories concerning bank bailouts, AIG, and other financial atrocities- particularly when they are about questionable practices- have been released, or at least seem to find their way into the news stream, on SATURDAYS or SUNDAYS. It's almost as if once again, we are being swindled and duped, and the intent is to deceive and obfuscate as much as possible...or maybe I'm just paranoid?
posted by GreyFoxVT at 4:44 AM on March 15, 2009

Retention? Has anyone explained why these guys need to be retained? Sorry, we can't afford your contract because you ran the car into the ditch. What? You quit? I'm so sorry to see you go.

This, while all the automakers are negotiating even more concessions for the people who actually make the cars. It's absolutely galling.
posted by Devils Rancher at 5:17 AM on March 15, 2009 [2 favorites]

Is it me, or does this sound like a meetup?
posted by hal_c_on

Dude, If you're coming, I'm fuckin' there.
posted by gman at 5:43 AM on March 15, 2009

Archie McPhee now sells Wall Street Zombies

Also, I hate to say this, but with all the billions flying around, I'm having a hard time getting furious about another $170 million. I mean, the Merrill guys got $3.6 billion in bonuses and Lehman's execs shared $2.5 billion.
posted by CunningLinguist at 5:54 AM on March 15, 2009

Now maybe if you all gave a shit that these people were making far more than they deserved ten or twenty years ago we wouldn't be in this mess in the first place.
posted by XQUZYPHYR at 6:18 AM on March 15, 2009 [2 favorites]

AIG execs work hard for the money. So hard for it honey. They work hard for the money, so you better treat them right.
posted by gman at 6:25 AM on March 15, 2009 [2 favorites]

Does anyone here remember that it's OUR ELECTED OFFICIALS who gave AIG OUR money?
posted by geeyore at 6:27 AM on March 15, 2009

Correct me if I'm wrong, but the government has no contractual obligation not to tax these bonus at, say, 200%.

Bill of attainder?

Anyway, the worst thing, the thing that really gets my blood pressure soaring, is that most of the guys who have done the real damage haven't broken a single law. We can't do a thing to them. Sure, a few people have posted links to individual executives who've broken the law, but notice that not one of those cases is related to CDSs. I wish they had engaged in blatant illegality, then we could nail them.
posted by atrazine at 6:52 AM on March 15, 2009

From Giddy's letter: Our competitors understand how valuable our top executives are, and we are acutely aware that they would like to siphon off our most talented leaders.

Well, the man has a point... if we don't keep these people at AIG, they could go to other institutions and fuck those up too.
posted by educatedslacker at 6:53 AM on March 15, 2009 [2 favorites]

Giddy -> Liddy
posted by educatedslacker at 6:54 AM on March 15, 2009

Since the U.S. Government is now AIG's parent company, I think we should have employee reviews broadcast on C-SPAN. Since the company is doing so bad, I'm sure that most of the exec's are on probation and having to be reviewed weekly - it would be a great show and a cathartic release for America: "Mr. VP, we need to talk about the coversheet on your TPS reports." Sure, most of the exec's would probably quit and we'd lose all that talent but I'm sure we could find some gamblers in Las Vegas who are as talented at losing money.
posted by Staggering Jack at 7:19 AM on March 15, 2009

but notice that not one of those cases is related to CDSs. I wish they had engaged in blatant illegality, then we could nail them.

A sufficiently clever prosecutor might be able to make a case for fraud and conspiracy to commit fraud. The number of CDSs written by AIG could not be covered by the company. The last I heard they had written somewhere around $2.7 trillion in CDSs on under $100 billion in assets. Writing contracts with no intent to pay out -- if it's provable they did that -- could make for some very nervous financiers. Too bad Elliot Spitzer couldn't keep it in his pants.
posted by ryoshu at 7:53 AM on March 15, 2009

Hmmm...
I say line them up. Then line us up. Give us a paddle.

Heh, heh, heh.
posted by Drasher at 8:07 AM on March 15, 2009

Surely this. . . . .
posted by Danf at 8:24 AM on March 15, 2009

I'm just curious, if AIG had been allowed by the government to go the way of Lehman Brothers, would they still be contractually obligated to pay those bonuses? Would the out of work former AIG board members be digging into their personal fortunes 6 months later to give millions in bonuses out for a defunct organization?
posted by any major dude at 8:24 AM on March 15, 2009

The real culprits here are the board of directors in general, and the Executive Board specifically.

I'm not sure how AIG's Board is structured, and I've been very snowed under lately with these markets so I don't have the time to research as much as I'd like, but the folks on the shop floor (as it were) and their managers really were given the latitude to leverage up the balance sheet so much by the board.

In other words, the board is ultimately responsible for the behaviour of the folks at AIG (or any publicly traded company for that matter).

Shareholders, as well as the government, can and should move have the board removed, and their actions investigated. It does seem likely there has been a violation of Fiduciary Responsibility, something that is clearly actionable.

FWIW, I'm not a Solicitor but I do serve as a non Executive Director for a couple of firms, and the issue of liability for clear wrong doing or failure to perform is clearly something any board member is painfully aware of, especially in the Sarbanes Oxley world.

Someone upthread complained that the real criminals are getting away. I'd suggest folks look to the boards, not only of AIG but other firms similarly impacted.

As I've previously mentioned on MeFi, I worked in the Credit Default business from its inception. The instruments were designed for an express purpose, but I (and many others) became very uncomfortable with the "innovative uses" of these products as the field matured. I moved out of Credit Default Swaps (into Structured Products) for unrelated reasons about the time these products began to be used primarily for speculation and not protection.

The board never should have allowed the balance sheet to balloon so much. Mechanisms exists to hold the board accountable.
posted by Mutant at 8:27 AM on March 15, 2009 [10 favorites]

re: mad as hell

Reminder: Do not forget to stay outraged
posted by kliuless at 8:28 AM on March 15, 2009 [3 favorites]

That barrel of tomatoes idea sounds like fun...
posted by limeonaire at 8:28 AM on March 15, 2009

Folks they had to pay those bonuses. I mean there was a risk of a lawsuit.
posted by PenDevil at 8:36 AM on March 15, 2009 [1 favorite]

Other people have discussed lamp posts and rope and torches and pitchforks. Are you just kidding, or do you really (like seriously, really) want to hurt these people?

I personally have no interested in hurting these people myself. However, the damage that these people and their ilk have done to the world is astonishingly great, and they continue to steal literally billions of dollars (on top of the trillions they've already stolen) without the slightest remorse.

As such, I think it would be a very salutatory lesson for the rest of them if many of these people were found hanging from lampposts with ravens pecking at their eyes, and I'd support anyone who had a workable plan to accomplish this.
posted by lupus_yonderboy at 8:53 AM on March 15, 2009

The board never should have allowed the balance sheet to balloon so much. Mechanisms exists to hold the board accountable.
posted by Mutant at 11:27 AM on March 15 [+] [!]

Mutant - I assume you're referring to shareholder class action lawsuits? Unfortunately, there are two classes of plaintiffs that are being systematically squeezed out of the US legal system by judges and legislators: shareholders and prisoners. There's nothing that bugs the courts more than a prisoner trying to get proper medical care, or a shareholder trying to interfere with "business judgment." Courts and lawmakers will do anything and everything to make their lawsuits nigh-impossible to win.

An easier (and more politically feasible) solution would be greater shareholder democracy -- giving shareholders the voting rights to control the boards and, especially, the compensation committees directly.

Also, as an employment lawyer who often represents executives in bonus and severance disputes, I would really like to see these contracts. It's inconceivable to me that they are legally obligated to pay these sums if they are truly "bonuses." They must be something more in the category of deferred compensation. If they are really bonuses, then those contracts better have some sort of claw-back provision that requires the return of the bonuses if company performance does not improve by legitimate metrics.

Ultimately, though, I can't get too worked up over this, except for to marvel at the optics. It's a kind of populist madness to focus on this tiny slice of compensation, which is such a drop in the bucket. These companies do need to pay their employees at the expected rates; it's really not true that "anyone" could do these jobs. It would not be in the interest of the country to have AIG's staff quit en masse. We need a more rational transition. (None of this is to say that I don't think we need major reforms in executive comp, or to underplay its role in this crisis. I just don't believe that focusing on pay decisions already made will solve the problems.)
posted by footnote at 8:57 AM on March 15, 2009 [2 favorites]

So don't pay them. Let the lawsuits be filed and see how that settles with the public.
posted by P.o.B. at 8:58 AM on March 15, 2009

Has anyone explained why these guys need to be retained?

The WaPo article said "any steps that encourage specialists at AIG Financial Products to leave could open the U.S. government to further risk because of the hazards still posed by the $1.6 trillion portfolio of complex derivatives those employees are working to dispose. " Basically, these guys created such a big mess that on one else really has a handle on how to fix it. Which makes this a double whammy. They got paid huge bonuses while essentially destroying the company and now they're getting paid huge bonuses to try to undo it.
posted by HiddenInput at 9:02 AM on March 15, 2009

"...for an average payout of about $19,000, according to AIG. "These are not Wall Street bonuses," said one AIG executive, who was not authorized to speak on the record."

A person making minimum wage, who works 40 hours/week, every week for a year, makes $13,624.

I make a more-than-average income, and cannot conceive of getting a $19,000 annual bonus.

They really don't live in the same world as the rest of us, do they?
posted by Houstonian at 9:12 AM on March 15, 2009 [3 favorites]

It occurs to me that the underlying problem might be that people don't realize the financial markets are the worlds largest casino. Sure we were lied to, but we wanted to be lied to, we wanted to always win the gamble. Financial companies that crashed were just compulsive gambler bookies that bet too much themselves.

I think that to some degree, our anger is misplaced. Perhaps our discomfort is from the poor judgement involved in getting sucked into the mess, and the bookie is a convenient scapegoat.
posted by jester69 at 9:21 AM on March 15, 2009

These companies do need to pay their employees at the expected rates; it's really not true that "anyone" could do these jobs.

I guess you're right; I'd probably need to drink a couple of thermometers to be able to perform with the competence of these executives.
posted by oaf at 9:21 AM on March 15, 2009 [2 favorites]

The French Revolution, while violent and murderous, certainly did accomplish a lot of good in the end.

One does not play nice with cancers.
posted by five fresh fish at 9:24 AM on March 15, 2009 [4 favorites]

They can have their bonus, if we do it "Magic Christian" style. We fill a giant swimming pool with effluvia and sewer trappings. Put their bonuses at the bottom before the pool is filled up. They want the money that bad, they can swim through shit to get to it.

That's a nice idea, but the problem is they'd never do it themselves, they'd just hire someone else to swim through the shit for them, and they'd get Congress to pay for it with stimulus money.
posted by homunculus at 9:52 AM on March 15, 2009 [1 favorite]

When I was laid off, I got a letter from my employer calling my service "exemplary" and stating that it wasn't my fault that I lost my job.

I didn't get two weeks notice, or any severance pay, or compensation for my unused vacation time or sick days.
posted by vibrotronica at 10:02 AM on March 15, 2009 [2 favorites]

as i twittered yesterday, AIG handing out bonuses, needless to say in the hundreds of millions, should be considered grounds for throwing out the board and the CEO. it's insanity, all sorts of wrong and outright criminal.
posted by liza at 10:41 AM on March 15, 2009

AIG speaks with forked tongue
posted by homunculus at 10:47 AM on March 15, 2009

At A.I.G., Good Luck Following the Money
posted by ornate insect at 11:28 AM on March 15, 2009

"Are you just kidding, or do you really (like seriously, really) want to hurt these people?"

Yes. It's time. Violence happens every day. It should be directed where it will do some good. Imagine a generation growing up with the knowledge that they would pay a dear price for this sort of scumbaggery as opposed to being celebrated as a hero on CNBC.
posted by 2sheets at 12:36 PM on March 15, 2009

Maybe one of these in Times Square?
posted by adamvasco at 12:49 PM on March 15, 2009 [1 favorite]

Just Gets Worse: "The first reports said either $100 million or $170 million in bonus payments. But there was a lot of unclarity about what kind of bonuses they were and how many were going to the folks at AIG 'financial products' division, where they wrote those credit default swaps that blew up the company and will likely cost taxpayers hundreds of billions of dollars. But the Journal says the number is actually $450 million to execs at the financial products division and a $1.2 billion spread across the whole company."
posted by homunculus at 1:13 PM on March 15, 2009 [3 favorites]

In New Terror Video, AIG Demands Huge Ransom from U.S.
posted by ornate insect at 2:24 PM on March 15, 2009 [5 favorites]

A.I.G. Reveals Its Biggest Counterparties
posted by oaf at 2:59 PM on March 15, 2009 [1 favorite]

That's a nice idea, but the problem is they'd never do it themselves, they'd just hire someone else to swim through the shit for them, and they'd get Congress to pay for it with stimulus money.

But if someone else swam in the shit, wouldn't they get to keep the money at the bottom? You would have to pay them enough not to want to keep it for themselves, in hopes that they would get the same job next year.

And anyway, the money isn't even really going to "AIG" it's going to the people AIG sold garbage CDSs too, and we don't even know who those people are.
posted by delmoi at 3:48 PM on March 15, 2009

(or, it looks like we do know now.)
posted by delmoi at 3:50 PM on March 15, 2009

And of course auto worker unions are expected to have their contracts with the Big 3 modified in order to save them...
posted by PenDevil at 4:20 PM on March 15, 2009 [1 favorite]

These companies do need to pay their employees at the expected rates; it's really not true that "anyone" could do these jobs. It would not be in the interest of the country to have AIG's staff quit en masse. We need a more rational transition.

I am not a fan of simplistic solutions too, but sometimes I wonder how rational was their operating methods to begin with. As far as I know AIG is the "lender of last resort" , which means they are the guy who holds the bucket and is supposed to pay, of enormous amounts of Credit Default Swaps (CDS), compared to their ability to repay. On top of this they apparently invested the money they obtained from selling their insurance in buying mortgage backed securities (CDO), which stopped making payments because of foreclosures and whose value collapsed. In practice, afaik, AIG held worthelss paper, little positive cashflow and a lot of CDO debts.

One thing to keep in mind is that, afaik, one doesn't need to effectively own an obligation of some company to insure its default risk with AIG. This means I could go to AIG and insure myself against the risk of Company X defaulting or going under a certain price. With relatively little money I could have bought an insurace for something I don't actually own.

And indeed, quoting wikipedia,

the time it filed for bankruptcy on 14 September 2008, Lehman Brothers had approximately $155 billion of outstanding debt[26] but around $400 billion notional value of CDS contracts had been written which referenced this debt.

Which means that Lehman debt was $155B , for instance in form of obligations. People/companies who owned those obligations couldn't own more that $155B of debt, because Lehman debt was exactly $155B. How comes there are $400B of CDS contacts ? Somebody tought that Lehman would have defaulted and _without_ owning any Lehman obligation they managed to buy an insurance for $400B protecting them from Lehman failure, without actually risking anything, but the agreed price of their insurance policy (the CDS' price). Whoever sold them this insurance (AIG ?)could _at best_ obtain $155B in worthless Lehman obligations, but they also had to pay an additional undisclosed amount of money on the $400B (the so called cash settlement, still in the real of many billions dollars).

As delmoni just noted, we now know who insured with AIG, or at least know some of them and I wouldn't be surprised to discover, years from now, immense conflicts of interest.

All of this is entirely rational, in the eyes of those who profit from this immense scheme. Certainly that is not the kind of rationality the losers will appreciate.
posted by elpapacito at 5:35 PM on March 15, 2009 [1 favorite]

Ben Bernanke's Greatest Challenge: Fed Chairman Discusses Recession, Financial Rescues And Recovery In Wide-Ranging 60 Minutes Interview
posted by homunculus at 6:44 PM on March 15, 2009

If you knew that ultimately some big banks and financial companies would have to be nationalized so they could be cleaned up, but it was politically unpopular, what would you do? Maybe let these assholes bonus themselves until Americans demand nationalization? I'm not saying that's what they're doing, but I do think stuff like this bolsters the case for actually taking them over.
posted by snofoam at 5:06 AM on March 16, 2009 [1 favorite]

Too bad thieves, muggers and looters don't read the paper. They'd know who to mug and steal from.
posted by anniecat at 11:30 AM on March 18, 2009

Corporate jets? Company cars? Bonuses? Shit. These assholes should be flying coach, driving their own asses to work in used Honda Civics, and thanking God they aren't in prison.

I wish I had a used Honda Civic. Sigh.
posted by anniecat at 11:35 AM on March 18, 2009