AIG Corporate Security's Tips for Surviving an Angry Mob
March 20, 2009 12:02 PM   Subscribe

AIG corporate memo, leaked to Gawker, advises employees on how not to fall victim to the populist horde calling for their heads.
posted by VicNebulous (79 comments total) 6 users marked this as a favorite
 
Well, fair enough. It would really suck to be the guy who works in the mailroom at AIG and get screamed at or worse by a bunch of shouty (or punchy) people who know they're supposed to be mad at AIG, but don't fully understand exactly why.
posted by dersins at 12:05 PM on March 20, 2009 [6 favorites]


To be fair, most AIG employees are not getting huge bonuses (to my knowledge) and if someone was going to beat up AIG employees at random they're not very likely to get one of the bigwigs. Otherwise it reads like the security page of any big company's employee orientation handbook.
posted by GuyZero at 12:06 PM on March 20, 2009


This is a good spot to link to today's Michael Lewis column, I think.
posted by Perplexity at 12:06 PM on March 20, 2009


Wonder whether these guys got the memo.
posted by googly at 12:08 PM on March 20, 2009 [2 favorites]


Seems fair.
posted by ThePinkSuperhero at 12:08 PM on March 20, 2009 [1 favorite]


Those stupid AIG fuckers with their greedy desire to protect their employees from potential violence. It's just ridiculous. I bet those greedy bastards have things like fire alarms and sprinkler systems in their building, too.
posted by flarbuse at 12:08 PM on March 20, 2009 [11 favorites]


That is a pretty dull leak. All of the big corporations I've ever worked for had pretty much the exact same policies in place. The only unusual items are the first two.
posted by boo_radley at 12:08 PM on March 20, 2009


• Hookers and blow in the atrium at noon.
posted by naju at 12:10 PM on March 20, 2009 [3 favorites]


Why did you tinyfy the URL? The actual post URL is fairly short but much more descriptive.
posted by Foci for Analysis at 12:11 PM on March 20, 2009


How do I know that this isn't actually a link to AIG-related porn? With sausage ponies?
posted by giraffe at 12:14 PM on March 20, 2009 [1 favorite]


We're not going to fix the economy by giving in to hysteria. As we know, a drowning man who starts freaking out is more likely to drown faster. The world is spending too much time freaking out and not enough time relaxing and treading water and trying to figure out if there's any floating debris big enough to cling to so we can start the slow, painful process of paddling back to shore.

/useless metaphor
posted by Joey Michaels at 12:14 PM on March 20, 2009 [3 favorites]


As we know, a drowning man who starts freaking out is more likely to drown faster.

Which causes me to ask: why does anyone drown? I can float on my back in the water for, literally, hours and hours and hours with little or no effort and only a smidgen of concentration. If I were to fall off a boat, why wouldn't I just float on my back until I reach shore? Sure, every once in a while I might have to wait out some killer waves, but come on!
posted by You Should See the Other Guy at 12:17 PM on March 20, 2009


To be fair, most AIG employees are not getting huge bonuses (to my knowledge) and if someone was going to beat up AIG employees at random they're not very likely to get one of the bigwigs.

Also, the tip about not wearing clothing with the AIG logo is kind of dumb, too. 90% of the time, if someones wearing a t-shirt or hat with a corporate logo that dosen't involve beer, cigarettes, technology, fashion or entertainment....they're a homeless person who got it from Goodwill. Don't beat up the homeless.
posted by jonmc at 12:17 PM on March 20, 2009 [4 favorites]


Why did you tinyfy the URL? The actual post URL is fairly short but much more descriptive.

Maybe because they wanted to be considerate to all of us that have to type out URLs by hand to navigate the internet. Have you no compassion?
posted by odinsdream at 12:19 PM on March 20, 2009


I'd hope that no one would mistake a low level AIG employee for the evil parasites at the top, but I'm sure its a misplaced hope. So unfortunately its probably necessary.

Not to advocate violence against the execs at AIG, but if someone were, hypothetically, to assault a few, do you think PayPal would let us put together a legal defense and reward fund?
posted by sotonohito at 12:20 PM on March 20, 2009


Well, the employees have been getting death threats, and by and large, they don't deserve to be. The guys in the division who caused this shitstorm jumped ship back in August or early September, and AIG had to offer these bonuses simply to be able to hire/maintain any staff that could try to fix it. This is one of the last things that anyone should be pissed about or worrying about in this crisis, and to be honest, for the first time I'm finding myself truly angry at Obama, for pandering to easy populism and intellectual dishonesty.

Maybe I've just had my fill of Gawker "leaking" things for this week, though, and would rather not see them getting ad-view monies from us.
posted by Navelgazer at 12:23 PM on March 20, 2009 [5 favorites]


You guys are missing the point. This document is not supposed to be damning. It is indeed perfectly sensible for people to be scrupulous about their safety, blameless or not. The point is that they are feeling the squeeze, and that should encourage us to continue to foment a critical response. Not violence, but dissent, and not at AIG, but at the government. This shit should never happen again.
posted by limon at 12:24 PM on March 20, 2009


they're a homeless person who got it from Goodwill

Every time I see someone in an eBay fleece pullover I think "wow, eBay's hiring standards sure are slipping... has that dude showered this week?" eBay seems to get it worse than other companies around here for some reason. But a trip to a Silicon Valley Goodwill is like reading an old issue of Fast Company or Red Herring.

I can float on my back in the water for, literally, hours and hours and hours with little or no effort and only a smidgen of concentration.

Take a job teaching people to do it sometime. For people who are scared of the water it would be easier to ask them to fly.
posted by GuyZero at 12:25 PM on March 20, 2009 [1 favorite]


Which causes me to ask: why does anyone drown?

I was not drowning but waving.
posted by Astro Zombie at 12:25 PM on March 20, 2009 [3 favorites]


• Avoid wearing any AIG apparel (bags, shirts, umbrellas, etc.) with the company insignia.

That'll be a challenge for these guys.
posted by ardgedee at 12:27 PM on March 20, 2009 [2 favorites]


[untined teh URL, please don't do that here]
posted by jessamyn (staff) at 12:29 PM on March 20, 2009


This memo is basic self-protective corporate HR prattle.
This AIG drama reminds me a lot of when Enron went down here in Houston a few years back - yes there were some evil, greedy people, but mostly it was cube-dwellers like us, trying to get out of a bad situation with a damaged resume and a shredded 401(k.) Give those folks a break.
posted by pomegranate at 12:30 PM on March 20, 2009


This is a good spot to link to today's Michael Lewis column, I think.

Put another way
posted by Navelgazer at 12:30 PM on March 20, 2009


That is a pretty dull leak.

Ok. Is this leak more exciting? Joe the Plumber is horny. (I'm sorry, it's Friday afternoon; that's the best I've got.)
posted by octobersurprise at 12:36 PM on March 20, 2009


googly: Wonder whether these guys got the memo.

Yes, they did.
posted by mach at 12:38 PM on March 20, 2009


This is something any large company would do given the circumstances. As much as I'd like to cave in and piss in the skulls of those responsible for the AIG mess, this seems reasonable.
posted by KevinSkomsvold at 12:47 PM on March 20, 2009


On another front, and certainly not helping their safety problems, AIG is using taxpayer dollars to sue the government for the return of $306 millions dollars in tax payments.

From the article:

A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.

AIG is run by truly colossal fucks, obviously.
posted by Benny Andajetz at 12:50 PM on March 20, 2009


Which causes me to ask: why does anyone drown?

Undertow. Cramps. Hit on the head with a boom/paddle. Hypothermia. Freaking out.

We have a friend who never learned to swim because he simply doesn't float. Its weird. My husband spent a full day in a swimming pool with him, trying to teach him, but he just can't float. He sinks like a stone.

Maybe he's a robot, I dunno.
posted by anastasiav at 12:54 PM on March 20, 2009


From Benny Andajetz' link:

The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do.

That's a special kind of hubris.
posted by odinsdream at 12:57 PM on March 20, 2009


Skinny people don't float so well, as muscle and bone are denser than fat.
posted by clevershark at 1:04 PM on March 20, 2009


The smartest thing AIG could do right now would be to change their name. The AIG brand is so damaged there's no salvaging it, and rebranding would save their employees from a good amount of shame and ridicule.
posted by mullingitover at 1:15 PM on March 20, 2009


for the first time I'm finding myself truly angry at Obama, for pandering to easy populism and intellectual dishonesty.

This.
posted by triggerfinger at 1:22 PM on March 20, 2009


The problem is that we've refused to nationalize the banks because of our "culture" or whatever, but we have given them billions and billions of dollars. Normally when you invest a shitload of money in a company, you get control. But the government has disclaimed all "official" control of these companies.

What we have instaid is this absurd farce, where we shovel hundreds of billions of dollars into the gaping maw of these banks, and tell them they can do whatever they want with the money (because the government can't take control!) and then get

Put another way

I found that XKCD comic ridiculous. what information is conveyed in saying "one hundred and seventy thousand million vs. one hundred and sixty five million" that's not conveyed in saying "one hundred and seventy billion vs. one hundred and sixty five million"?

I mean, if someone is too dumb to realize that a billion is a thousand times a million, how are they going to do the math in their head and conceptually understand "X hundred thousand million".

Of course, int the comic he didn't write the text out like that, he used digits, and even lined them up so you could see the difference in magnitude clearly.
posted by delmoi at 1:27 PM on March 20, 2009




I see Michael Lewis is using the old "blame the rubes" defense. It's the sign of a true con man! After all, "you can't cheat an honest man," right? Therefore, if you were cheated, you must be dishonest.

Does he really not understand why people are so pissed off about this? When us plebes get a bonus at work, (assuming you still have work, in which case you're better off than I am), it's because we did a good job and the company has prospered as a result. A whole lot of people in the AIG Financial Products division got bonuses worth millions. This is the very same division that cooked up borderline fraudulent CDOs and CDSs that they didn't really understand and that, when they failed, finally brought the whole fucking house of cards down around our heads. Our heads, meaning the heads of the people who DIDN'T view the economy as a huge fucking casino where you bet trillions of dollars of other people's money and then expect the government to bail you out when your bets went bad, but rather a system where you do work and are rewarded for it. They made the bets, the bets went bad, and now we have to cover those bets OR ELSE and they get paid millions of dollars in bonuses. They're millionaires, and I'll never get to retire, assuming my lacking-health-insurance ass lives that long. It puts the lie to the whole basis of capitalism, where good performance is supposed to be rewarded and bad performance is supposed to be punished. But now we know what we have suspected all along: No matter how bad their performance was—and from where I'm sitting, it looks epically bad—they still get paid millions while we stand in fucking bread lines. It says to folks like me that they're the ruling class and we're the serfs, and if they have to extort what little money we have left from us in order to stay the ruling class, then they will do it and they will expect us to thank them for it.
posted by vibrotronica at 1:32 PM on March 20, 2009 [11 favorites]


Seems to me that, when it's unsafe to display your company's logo anywhere but on company grounds, you have fucked up beyond salvation.

The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do.

Are you fucking kidding me? What planet are these shitheads from?
posted by EatTheWeak at 1:35 PM on March 20, 2009


for the first time I'm finding myself truly angry at Obama, for pandering to easy populism and intellectual dishonesty.

This.


.. isn't really grasping the larger picture.

Put aside for a minute that Timothy Geithner was partly responsible for letting this happen. What is really happening is that AIG is being made a scapegoat for all of the same type of behavior that we can expect from TARP recipients in the coming months. It started with Citibank's jets, it's continuing with AIG's bonuses. The message is that these funds were essentially given without any real oversight (this is the fact I have a problem with) and there needs to be consequences for not spending that money in a way that gets an entity like AIG back on track.

Yes, it reeks of populism. YES, it's intellectually dishonest.

But my guess is it's paving the way for the next, larger bailout, to come through congress with a whole lot of stings attached-- which is the only way to help this kind of action achieve any sort of beneficial outcome.
posted by eyeballkid at 1:38 PM on March 20, 2009 [3 favorites]


I, love, commas,
posted by eyeballkid at 1:39 PM on March 20, 2009


That weaselly Cramer fellow is somehow wrapped up in all of this, you mark my words!
posted by mazola at 1:42 PM on March 20, 2009


for the first time I'm finding myself truly angry at Obama, for pandering to easy populism and intellectual dishonesty.

I assume you haven't been following the torture issue at all, you know like how the Obama DOJ has been keeping up the same bogus bush arguments, even though he campaigned against them in the election (specifically using the state secrets act to try to get entire lawsuits thrown out, etc)

But whatever. It's kind of amazing to me that you apparently have no problem (or are at least not angry with obama) with the fact that the Obama administration is forking over hundreds of billions of dollars to the same greedy assholes who caused the problem in the first place. These people's entire professional Careers have been oriented towards getting as much money as possible for themselves, not their employers. Why would anyone expect them to stop now/

The entire bonus/retention thing is a scam. When things are going well, they need huge bonuses to keep people from leaving to competitors who can afford to pay so well. And when things are bad, they need to pay huge 'retention fees' to employees so they don't get depressed and just quit.

AIG new in 2007 that the CDSes were going to cause problems, but they renegotiated these contracts to 'retain' their 'top talent'.

so they make money in good times and bad, it's a scam against the shareholders, who are now the U.S. government. They're looting the company on the way down to line their own pockets, now with bonus U.S. Government investment.

---

As far as renegotiating contracts, well no one had any trouble when the U.A.W had to renegotiate it's contracts for blue collar workers in order to keep GM and Ford alive. Of course, if you're a blue collar worker, you're nothing in the eyes of the elites. But heaven forbid these people making million of dollars a year have any of their money touched, even though they actually drove the company into the ground. It wasn't the auto workers who destroyed GM, but these dervatives traders really did destroy AIG.

And finally, when a company goes bankrupt the all of these contracts would have been voided by the bankruptcy judge and the judge would have decided what money went where. the only reason AIG didn't go bankrupt was because of the federal government's assistance. But why should AIG's employees be treated better then they would be if the company had not been bailed out then if it was, when the point of the bailout was to protect the financial system, not AIG and especially not the individuals employees in AIG who fucked everything all up.

And Finally, the treasury department does have the legal right to change contracts in companies it bails out through TARP. The problem here is that the bonuses have already been paid, so we can't just "not pay them". They could sue, but they probably wouldn't win.

And finally, why on earth should Obama put his political neck on the line for these greed pigs, and put his entire domestic agenda (health care, infrastructure, etc) on the line in order to help some people keep making tens of millions of dollars a year without actually creating any wealth at all.

far from cheap, easy populism, this actually a sign that he's starting to get the problem, which is bankers trying to extract as much wealth as the economy craters for themselves as possible, rather then fix the system. The popular response is the correct one.

this Op/Ed by Simon Johnson and James Kwak of the Baseline Scenario goes over some of the parallels between what's happening in the U.S. and what has happened in other economic crises around the world in the past, where bankers demand to keep their positions as they are the only ones capable of "fixing" the problems, (and of course, continuing to get paid)
posted by delmoi at 1:49 PM on March 20, 2009 [11 favorites]


I, love, commas,
posted by eyeballkid


I, put the, beats in, my script, and I'm, sticking, to it!
posted by nola at 2:03 PM on March 20, 2009


Navelgazer wrote and AIG had to offer these bonuses simply to be able to hire/maintain any staff that could try to fix it.

Damn.

I'd really hoped that finally, after all the myriad proofs that the ruling elites of the financial world aren't some sort of superhuman John Galts that maybe this latest fiasco would dispel the myth. A foolish hope, I know. "Maybe **this** will finally..." is the cry of the perpetually disappointed.

But still, I'd held out hope.

Thanks for bringing me back to reality Navelgazer. I've always considered disillusionment to be a positive thing; who, after all, wants to be illusioned? Its painful, but necessary, to grasp reality and you've brought me back.

Of course the myth of the CEO who really and truly is worth millions will persist. Of course there will be a chorus of those who insist that the worthless and truly stupid parasites at the top *NEED* their millions, or they won't be incentivized to succeed, or whatever other buzzwords you can toss out.

I argue that there's absolutely nothing that a CEO getting paid untold millions can do that an MBA from any university in India can't do better for $80k a year. Outsourcing, right?

But no. The myth that wealth = worth lives on, along with the closely related myth that its impossible to run a company without pouring bucketloads of cash into the maws of our American aristocracy.

So thanks. I can't say I like learning that, no, many Americans still believe in the necessity of million dollar CEO's, but its necessary.
posted by sotonohito at 2:26 PM on March 20, 2009 [3 favorites]


These aren't even million dollar CEOs, they're million dollar traders. If these companies really did go bankrupt, then there would be no one around to pay any of them, and they'd either have to work for far less money or go live off their savings. The idea that we should continue to pay them the same rates even though they would have no jobs if not for taxpayer money is absurd.
posted by delmoi at 2:32 PM on March 20, 2009


Just to be clear, sonohito, I'm not talking about Liddy or the rest of the execs (who should be working for free at military gunpoint, if working at all, as far as I'm concerned) but rather the lower-level employees who only stuck with AIG because they were guaranteed these bonuses in their contracts. I'm certainly not a fucking Galt-ist, and even if I were, I don't think that these CEOs offer any productivity to the world. I'm just saying that we're picking a dumb-ass non-story from all of this, misinterpreting the shit out of it, and then carping on it instead of the bigger issues (such as the ones Delmoi mentions above.)

As to you, Delmoi, I hadn't been hearning much about Obama and torture, so thanks for the info. I haven't gotten angry about the bailout yet, because I just don't have any better ideas myself. With this, though, I got the first feeling like Obama was lying to me, and that made me angry.
posted by Navelgazer at 2:44 PM on March 20, 2009 [1 favorite]


far from cheap, easy populism, this actually a sign that he's starting to get the problem, which is bankers trying to extract as much wealth as the economy craters for themselves as possible, rather then fix the system. The popular response is the correct one.

THIS. At least I hope it's this and not any of the other, more cynical versions of the situation.
posted by eyeballkid at 2:57 PM on March 20, 2009


Navelgazer wrote I'm not talking about Liddy or the rest of the execs (who should be working for free at military gunpoint, if working at all, as far as I'm concerned) but rather the lower-level employees who only stuck with AIG because they were guaranteed these bonuses in their contracts.

Correct me if I'm wrong, but aren't the executives the only ones who have contractually guaranteed bonuses? Last time I checked most corporations only gave bonuses to their actual working employees on a purely discretionary basis.

And, really, what sort of real working person says "well, I won't go back without a bonus!" That's the behavior of the aristocracy. Working people go to work because if they don't they won't be able to pay the rent.

I'll go further than that, the bonuses we're talking about are all in the million plus range. I will categorically state that any person "working" for a company who gets a million or more in a bonus is a worthless parasite and the company can do perfectly well without him. The entire concept of a "retention bonus" is a product of the aristocracy, not the people who actually do necessary work.
posted by sotonohito at 3:01 PM on March 20, 2009 [1 favorite]


I've been following the financial implosion closely for a year now. A year ago this spring the Bear Stearns collapse occurred. Last fall the entire global economy seemed as if it were teetering on the edge, and that feeling has not really stopped. Here's what I want to say: the Obama administration, for whom I enthusiastically voted and would vote for again were the election held tomorrow, nevertheless seems intent on verifying the cliche about the road to hell being paved with good intentions. Their modifications of TARP, TALF, PPIF, and their continued insistence on pursuing the framework laid down by Paulson last fall, has only made the situation worse.

They are in reactive mode all the time now. Every other day, sometimes multiple times a day, a new revelation about how completely fucked up the situation is appears in the news, and the Obama administration desperately goes into damage control. They are not in charge of the situation; the situation is in charge of them.

The only, and I mean the only, solution to the present mess (a mess that will not stop with AIG; see for instance the breaking news about the Merrill bonuses) is to scrap TARP, TALF, and PPIF--and to put AIG and all the major banks into temporary receivership (aka the Swedish solution).

At that point the companies should be re-structured, de-bugged, their executives fired, and the government should ensure their long-term health by passing vigorous and sweeping new regulations for the entire financial industry.

Anything less than this, and especially the asinine business (TALF/PPIF) of enticing private investors with another trillion to buy up the toxic debt, will just make the situation far, far worse than it already is.

Do I think the Obama administration will heed something like the suggestion I've just laid down? No. Do I think their failure to do this will out-disaster the current disaster? Yes.
posted by ornate insect at 3:29 PM on March 20, 2009 [3 favorites]


.. isn't really grasping the larger picture.

Precisely what I am saying. It is very easy to build up a stereotype of a greedy, money-hungry banker in our minds and fail to see the real people that we're talking about. The fact is that the vast majority of the people working at AIG had nothing to do with this. That the ones responsible left months ago and the ones remaining are now facing death threats.

Inside AIG-FP, Facing the Public's Wrath


The handful of souls who championed the firm's now-infamous credit-default swaps are, by nearly every account, long since departed. Those left behind to clean up the mess, the majority of whom never lost a dime for AIG, now feel they have been sold out by their Congress and their president. ...

...They say what is missing from this week's hysteria is perspective. The very handsome retention payments they received over the past week were set in motion early last year when the firm's former president, Joe Cassano, was on his way out the door. Financial Products was already running into trouble on its risky credit bets, and the year ahead looked grim. People were weighing offers from other firms, and AIG executives feared that too many departures could lead to disaster.

So AIG stepped in with an offer to employees of Financial Products. Work through all of 2008, and you'd get a lump payment in March 2009. Stick around through 2009, and you'll get paid through 2010. Almost all other forms of compensation -- bonuses, deferred payments and the like -- have vanished.

"People are trying to do the right thing," the same Financial Products executive said. "Guys have worked their [tails] off to try to get value for the taxpayer. This isn't money that's being advanced to us. People have performed the work and done it exactly as we asked them to do."


How about the complete failure of the Treasury to see these contractual bonuses when they reviewed the finances of AIG before they provided the cash injections? Of course, everyone knows that the government was aware of the bonuses and only when the public outrage began, turned and pointed their fingers at all the greedy bankers.

I certainly don't think that people should be awarded for failure, especially the people who helped to engineer this whole mess. But the fact of the matter is that there is no one person or instutution to blame, and that there was a failure of checks and balances every step of the way. This intense focus on AIG employees, 99% of whom have never done a thing wrong, but instead, are working to unwind these positions, is misguided at best and at worst, is obscuring the real and multiple problems that we have and what needs to be done to fix a broken system. Looking at how the culture of bonuses has become so embedded in the world of finance is perhaps one place to start, but this 90% tax law does nothing to address that.

Angry that executives are making tons of money, often seemingly for failure? It's been going on for years. Seven years ago, the chairman of Tyco was spending six grand on a shower curtain. I was reading about this kind of thing 15 years ago, and that's only because that's when I got to the age where I became interested in this kind of thing, not because it had just started. Somehow along the way, we allowed corporate greed to become embedded in our culture, I've been outraged about it for years. But Congress hastily putting together a law to slap a 90% tax on, for the most part, people who don't deserve it is one of the more shambolic pieces of legislation I've seen in a while. It's not even a proper band-aid which will temporarily stop the bleeding, it is a poorly thought out, hastily assembled piece of political/populist pandering.

There is no doubt that we have lots of problems in our system, from the top all the way down. We need to take an even, honest and well-reasoned look at these things, without the hysteria. What we're doing instead is punishing private people for regulatory and governmental failures.
posted by triggerfinger at 3:31 PM on March 20, 2009 [1 favorite]


In related news: CNBC host: Wall Street companies can’t ‘be run well’ by those making under $250,000.

"Of course, Wall Street has been run so smoothly under millionaire CEOs."
posted by ericb at 3:43 PM on March 20, 2009


Bailout Bonus Brouhaha: Fannie Mae Edition
"Another bonus battle flared up today as a key lawmaker and government-controlled mortgage giant, Fannie Mae, crossed swords over the controversial money awards.

Fannie Mae's chief executive sent employees an e-mail message defending the company's bonus program while Representative Barney Frank, Democrat of Massachusetts, countered with a demand that such bonuses be completely scrapped.

...Herbert Allison -- who took over at Fannie Mae last fall and works without a salary -- proclaimed his view in an e-mail to employees. Fannie's spokesman, Brian Faith, did not return calls for comment.

'I am deeply concerned that eliminating our retention plan would jeopardize our ability to fulfill the mission the government has given us to address the housing crisis,' he wrote employees.

Noting that Fannie is charged with preventing housing foreclosures, he said the bonuses were needed to 'ensure we maintain the skills and experience we need to help keep the mortgage market operating.'

Pshaw -- in a word -- said Frank, who chairs the House Financial Services Committee. He wrote Fannie's regulator, the Federal Housing Finance Agency, urging it to rescind the retention bonus programs, bar future bonuses, and recover any bonuses already paid.

'I remain very skeptical that retaining and rewarding people who made the mistakes that contributed to the unsatisfactory performance is a good idea,' he wrote in a letter released today.

Plus -- given the troubled economy and job market -- 'it is difficult to imagine that the companies would not be able to find competent and talented replacements for anyone who chooses to leave,' he said."
posted by ericb at 3:48 PM on March 20, 2009


..this 90% tax law does nothing to address that.

AIG tax could face constitutional fight.
posted by ericb at 3:51 PM on March 20, 2009


Somehow along the way, we allowed corporate greed to become embedded in our culture...

AIG flap heartens critics of exec's pay.
posted by ericb at 3:53 PM on March 20, 2009


  • And avoid taking large bonus that are largely funded by the public purse

  • posted by mattoxic at 3:54 PM on March 20, 2009


    I understand the uproar, but I think it's overblown, and it's gotten pretty scary when it's at the point of setting up special taxes to target a specific group of employees. They should have taken this issue as a caution for future bailouts but left it alone. Any number of typical business expenses look frivolous and unnecessary when open to public scrutiny.

    I could understand it if employees somehow voted themselves bonuses in order to scam the company and the government; but these were promises made by the employer, and the employee is not at fault if the company decides to fulfill them. I think the amounts involved are irrelevant considering the larger issue of a company's failure to keep promises made to employees, particularly if employees made career decisions based on those promises. Are AIG's competitors now not allowed to use bonuses to compete with AIG on the job market? Why would the employee be less entitled to what is promised than any other creditor AIG deals with? Are we going to examine AIG's corporate creditors to see if the contracts they made were too advantageous? This was an oversight on behalf of the legislators and the company and whatever regulators were involved (and not unexpected given that this bailout stuff is new territory for all involved), not the employees. If an employee with a certain skill set is worth a certain amount of money on the job market, even if we think that's a lot of money, it's unfair for the public and the government to come along and target only specific individuals to satisfy some misguided mob sense of justice.

    I think it's sickening that they are being personally outed and targeted by the public, as if any of us would turn down money offered to us by an employer, whatever the circumstances, whether we feel it is deserved or not. We don't know that many of those employees didn't actually make money for the company that offset AIG's losses, or that they didn't keep the company from collapsing earlier, or that they are not acting ethically and responsibly now.
    posted by troybob at 4:04 PM on March 20, 2009


    Wife of AIG Exec To Taxpayers: "It's Our Bonus Now, Suckers!"
    posted by ericb at 4:07 PM on March 20, 2009


    "People are trying to do the right thing," the same Financial Products executive said. "Guys have worked their [tails] off to try to get value for the taxpayer. This isn't money that's being advanced to us.People have performed the work and done it exactly as we asked them to do."

    I was doing the right thing and performing the work exactly like I was asked to perform it at my job when I was laid off. I went for three fucking years with no raise and no bonuses and saw my take-home pay drop a full 10% because of health insurance. GM autoworkers saw their contracts renegotiated in order to "save the company." AIG is failing because of the actions of the Financial Products division. The only reason the Financial Products division still fucking exists is because the stunning magnitude of their fuck up endangers everybody else in the fucking world.
    posted by vibrotronica at 4:39 PM on March 20, 2009 [4 favorites]


    from ericb's link:

    "It is wrong," said Republican Judd Gregg in a statement today, "to propose to use the taxing authority of the government in a manner that is arbitrary, punitive, and targeted on a single group of people who they have deemed as having acted improperly."

    It could reflect an attempt just to throw a wrench into Democratic politics, but i agree with this.
    posted by troybob at 4:57 PM on March 20, 2009


    Frankly, I'm getting a little sick of being told that this amount or that amount is so small as to be inconsequential in context of the billions being thrown around. All those inconsequential amounts add up to a figure that's pretty fricking consequential.
    posted by schoolgirl report at 5:06 PM on March 20, 2009 [4 favorites]


    I think it's inconsequential in the sense that all this time and attention and debate over $165 million is happening at a time when billions of dollars are likely being lost due to any number of other unethical or illegal business practices, or just bad decisions, that are being ignored because of it. It's not that this isn't an important thing to look at going forward (and applied more fairly and equally), but this particular story has taken hold because it offers a particular group of people as a repository for our frustrations, in a financial environment in which nobody--consumers included--is free of blame.

    In terms of legislation, I think this too much resembles the whole 'save Terry Schiavo' thing.
    posted by troybob at 5:32 PM on March 20, 2009


    troybob You keep using the term "employee" to refer to these people, and I think that's not right. Yes, technically they are employees of a corporate entity, but in reality they are the masters of that entity. They aren't employees, they're executives.

    And they did vote themselves these bonuses. Its not as if the company exists as some separate entity from its executives. The executives decide what the company will do, and they decided that the company would give them "retention bonuses".

    Its amazing how, when hard times loom the executives decide that *THEY* need retention bonuses, to give them an incentive to stick around, but the little people, the peons, need to get pay cuts, wage freezes, or layoffs.

    in a financial environment in which nobody--consumers included--is free of blame.

    Nonsense. I'm fucking well free of blame for this mess, and so are 90% or more of Americans. The people who are to blame seem to be all getting millions while those of us who did nothing wrong are getting the bill for their bonuses.

    Frankly, I think this is a damn good time, a perfect public environment, to institute not merely draconian oversight of the seething cesspool that is the financial industry, but to add an across the board maximum wage. Surely a corporation, which has an obligation to maximize profits to its shareholders, is better off spending money on stock dividends than on yet another worthless parasite at the top "earning" millions?

    I've never quite understood how such corporations aren't nailed by minority stockholder suits for that reason. Company X pays millions to executives, that means millions aren't going to the stockholders, sounds like a bad corporate decision to me. Indian MBA's will work for cheap and do a better job than our upper class twits could ever do.

    I'd like to see a maximum wage of 20 * X where X is the salary of the lowest paid employee in the corporation, the janitor or what have you. If an exec wants to make more money, then he has an incentive to make the company perform well enough that he can raise the wages of his lowest paid people.

    But the nonsensical idea that somehow the aristocrats in charge are such supermen that they actually are worth the millions they are paid is preposterous on the face of things.

    I'll agree that, in general, legislation as narrowly aimed as the proposed tax (I'd rather it was 110% of the bonus amount, not 90%) is a bad idea. But they're the ones who have brought this about. If they'd done the right thing, said "we did such a shitty job that without the bailout our corporation would be bankrupt, we don't deserve these obscene bonuses", no one would be talking about a special tax.

    But they're sitting there in their limos and penthouse apartments giving us the finger while they live it up on our tax dollars. I figure there's nothing wrong at all with taking that money back. Personally, I'd like to see them thrown in prison and all their assets sold at auction for the offense they're giving real people.
    posted by sotonohito at 6:12 PM on March 20, 2009 [2 favorites]


    I think the amounts involved are irrelevant

    And I think you are tone deaf. A million dollars may seem irrelevant to you in the grand scheme of things but not to the vast majority of people in this country. Come down off your cushy cloud and look around-- people are losing their jobs and their savings and their homes. A fraction of a million dollars would be a life line to a great many at the present moment, yet the middle and lower classes know that the government is not going to bail them out when things start falling apart. This whole bank bailout was a huge shit sandwich that the taxpayers had to eat and now to be told that a percentage is going to executives as bonuses is intolerable. We are all tightening our belts and doing without lunch-- here in NC basic government services like libraries and roads and prisons are all getting their budgets slashed-- but AIG executives appear to be going out to lunch and swilling down champagne as though nothing has happened. I think Obama is right to make this symbolic gesture-- the mood of the country is very ugly and a few crumbs of bread might keep the crowds from storming the Bastille.
    posted by Secret Life of Gravy at 6:43 PM on March 20, 2009 [4 favorites]


    "It is wrong," said Republican Judd Gregg in a statement today, "to propose to use the taxing authority of the government in a manner that is arbitrary, punitive, and targeted on a single group of people who they have deemed as having acted improperly."

    There may be problems with this, but I'm not sure Gregg has a handle on them. This is far from arbitrary or capricious, it's focused on a very specific problem, it's markedly less punitive than the discipline of the market would have been, and it simply is not targeted at people. There will be no law containing any individual or business names. It's barely even targeted at a behavior. It targets a readily described and easily avoided economic transaction that has some good reasons to be discouraged.

    I think the argument that this should have been handled by a smarter takeover and better regulation is a good one. It should have. And if we were choosing between recovery of the bonus money and development of institutions that act effectively and responsively and managing these things, forgoing the recovery is the right choice.

    But I don't see any evidence that it's an either-or proposition, I think it's arguable that using this high-profile incident to send a message can help.

    In terms of legislation, I think this too much resembles the whole 'save Terry Schiavo' thing.

    I can see the parallels, the populist appeal, the simplified questions, but it seems to me the interest in the mangement of AIG and others rests far more easily inside the realm of congressional review and action by the very fact that these are now public institutions. The state has an interest in issues of life and death and the Schiavo case wasn't entirely irrelevant, but the congressional action was as a contrast very much an invasion of a private life. The moment public funds were required to help these institutions survive, the matter of how the money is spent became quite germane to congressional action.
    posted by weston at 7:17 PM on March 20, 2009


    how soon after AIG changes its name do teh kids start wearing AIG shirts ironically? is this already happening? somebody let me know.
    posted by rooftop secrets at 7:55 PM on March 20, 2009


    The Secret Life of Gravy is spot on. When the AIG chairman went in front of Congress earlier this week, he said he'd ask for half of all bonuses over $100K to be returned. That means that the minimum bonus in this cohort would be $50K, which coincidentally is almost exactly the median yearly household income in the U.S. of A.

    Yes, in the grand scheme of these things these bonuses are a pretty small fraction of the overall dollar amount--but this kind of comparison brings the inequality of wealth distribution in this country front and center to people. There is no way that facing these facts will not outrage most Americans. Outrage is in fact a totally reasonable response, since this kind of wealth disparity is a national disgrace.
    posted by Sublimity at 8:30 PM on March 20, 2009 [1 favorite]


    I don't think the amounts are irrelevant in themselves; I think they are irrelevant in the context of the problem and the scary amounts that are at real risk right now, and the real and tragic consequences of such loss. If the economy is in the process of crashing, I'd be really pissed to know that this issue detracted from attacking more urgent problems.

    I agree that the issue of bonuses should have been ironed out at the time of the takeover--denied, even, if that was called for; that's not the same as condemning the recipients as undeserving and immoral. I think the more likely scenario is that these bonuses are the typical and established way business is done in the industry such that they didn't stand out as an issue, and that's why it went forward without being negotiated. There is a legitimate call for overhauling business practices, with which I don't argue.

    There is this really crude caricature of these employees/executives as living like Montgomery Burns--the only stereotype I haven't seen mentioned at this point is a monocle--which I think applies more to those guys who took all the money and ran long before all this stuff came down; and there is a pretty creepy thread of vengeance toward those receiving the bonuses. It's not like we didn't know this is how business works, and it's not like we've had collective will enough to change it--we've even been entertained by it, and not particularly complaining about it when things were going well--so I think it's hypocritical to disparage a particular group of people who have no more lack of moral fiber than the rest of us.

    I'm having a hard time with this issue with pretty much everybody and haven't been able to explain that I think there is a larger point being overlooked here. I wish I were smart enough to argue it. I'm no friend to corporations and how they have been permitted to operate, and I'm way liberal; and I'm not rich at all, and almost certainly never will be. I'm likely completely wrong about it, given that I'm of a very few. But i can't help but feel that this move is a kind of loss for us, of something important.
    posted by troybob at 9:08 PM on March 20, 2009 [1 favorite]


    triggerfinger: thanks for finding the article I was looking for. I understand all of the anger directed at this issue, but the truth of it is that the Financial Services division of AIG right now is kind of like the 1920 Chicago White Sox - it's the same scandalous ballclub, but the member of the team aren't the same.

    I must have misrepresented myself above, because I'm mad as hell at anyone who had anything to do with causing this economic trainwreck. I'm feeling it personally, and my friends are feeling it personally. I went into law school in order to be able to make a steady living doing something I apparently have a high mental capacity for, and because these CDOs and CDSs fucked the economy so badly, I can't even find a public interest job right now. The top firms have all delayed or deferred their offers to outgoing 3Ls, pushing them into public interest fellowships in order to make half of the money they had previously been guaranteed for their first year, which means that the people who were trying for those public interest positions now have to take a backseat to the more prestigious "big firm" applicants. At the moment, as a 2L, I'm just trying to find anything, even for free, to do for the summer in DC - the world capital for the legal field - and can't give it away, coming from a top law school. All because of these fuckers at AIG, Lehman Bros, and so on.

    So yeah, I'm pissed.

    But much as it may make me feel better, temporarily, heads on pikes won't solve anything. Letting AIG die will only make things worse. Punishing the people at AIG who are tasked with fixing the mess because we can't punish the ones who caused it is injust, imprudent, and actually illegal by some measures. That's why I'm calling to direct our rage and energies elsewhere, and another reason I'm frustrated with Obama, though I'm not sure what, exactly, he should be doing on this following count:

    We, the people of the United States of America, don't want to sit around and wait for things to get better. We may want an enemy like AIG to seethe at, but in the end that does us no good. What we want and need is some idea of what we should be doing to help make things better, and I don't think we're getting anything like that. "Trust us," is the most infuriating form that leadership can take, because it eschews the actual act of leading.

    sonohito accused me of being a part of the Galt movement above, and I've already addressed that, but I want to say something else about it. While I am absolutely not objectivist at all, one of my closest friends is, and takes all of it to heart, and is one of the most noble, moral, genuinely good people I know, living through that mindframe. Last week, for the paper for which we are both editors (I'm on features, he's on opinions) he wrote a full-page editorial calling bullshit on the Galt movement, for the following reasons:

    First, that the Obama administration's actions are not analogous to the events in Atlas Shrugged and that it's histrionic and counter-productive to pretend that they are. Secondly, that even Rand didn't make the connection that those sommanding the greatest wealth are necessarily the most "productive" member of society, and in fact are often a drain on society and productivity, and finally, that there are two chief tenets to objectivism: that one live their life for no one else, and that one not live off of anyone else. The proponents of Go Galt are living by the first tenet, while completely abandoning the second, my friend argues, stealing from their shareholders, their employees, their employers, in some cases, and taxpayers, and turning around with a sense of entitlement that they owe nothing to anyone. He adroitly explains that the first tenet in the absence of the second is not objectivism, in fact, but is rather almost exactly in line with LaVey's teachings of Satanism.

    Seriously, though, for anyone who hasn't, read triggerfinger's first link above. They know that the top brass are replaceable, because they are. The issue is finding people willing to stay aboard a currently sinking ship long enough to hopefully fix it.
    posted by Navelgazer at 11:37 PM on March 20, 2009 [1 favorite]


    troybob wrote that's not the same as condemning the recipients as undeserving and immoral.

    Can you explain, please, what could possibly make any executive *deserving* of a million+ dollar retention bonus?

    I'm having a difficult time imagining what such a person could do. I mean, think about it, you're envisioning some near godlike being, a man capable of walking on water apparently, who says "Yes, I and I alone have the power, the skill, the sheer badassery to save AIG and the entire economy. But unless I get a few million I'll go 'work' for someone else!"

    I'm thinking, "so long, we'll get an Indian MBA to replace your worthless ass".

    Let me reiterate my point: NO ONE IS WORTH THAT MUCH. We have a population of around 300 million or so, and you're telling me that the necessary skills to run a big company are so insanely rare that we have to worship and shower obscene riches on the few who possess them? Impossible. They can't be that scarce. I know they'd like to think they're rare, superhuman, Galtesque beings who by merely walking in the door bring immense value to the company, but that's nonsense.

    May I remind you that its the overpriced execs we're talking about who **CAUSED** this mess? That these Wall Street supermen you keep insisting must be bribed, cajoled, and sucked up to with millions of taxpayer dollars are the incompetent morons who got us into this mess in the first place?

    Yet you're telling me that its good, just, right, and (more important) necessary that the government take money from me, a guy who actually works for a living, in order to give it to the incompetent morons who caused the problem.

    Can you explain that a little?

    Oh, and you bet your ass there's an ugly thread of vengeance towards those receiving the bonuses. There's an ugly thread of vengeance towards the whole executive class, and I for one am damn happy its finally showing up. They've been sucking ever more money out of the economy for the past 40 years, its about damn time people woke up and realized that the executive class is composed of worthless, overpaid, and generally slimy if not actively evil, individuals. I'm not afraid they'll go Galt and leave, I'm hoping for it, I'm in favor of anything that drives their less than worthless asses out. Maybe once they're gone we can actually get things going again, but as long as they're at the top driving the economy into the ground while they suck out millions into their own pockets we'll keep being screwed.
    posted by sotonohito at 4:08 AM on March 21, 2009 [2 favorites]


    Man, I wish I read this before putting on my Manchester United shirt today.
    posted by robocop is bleeding at 6:35 AM on March 21, 2009 [2 favorites]




    Anyone who defends or deflects the anger about this current situation needs their head examined. And there are things you can do instead of sitting around being pissed off.

    You can call your damn Senators! There are 800 numbers you can get immediate access to your state's representation on the Hill and tell them how you feel.

    You can ask them to pass The Employee Free Choice Act so that employers can unionize without being leaned on by management. You can encourage your Senators to pass Obama's budget that included 530 billion dollars of healthcare reform legislation so people don't have to choose between their mortgages and their health.

    The money we're spending on this debacle should be money that the country needs in far more basic ways than propping up the banking infrastructure's Way of Doing Business.

    Should we have caught it before this? Hell yes. But there are things each and every one of us can do right now that wouldn't take more time than it took all of us to write our comments on Metafilter that can directly influence the outcome of this mess.

    Write letters to the editor. Find out who's doing volunteer work on this issue in your town and work with them. Google Organizing For America and get out on the street.

    You have a voice, folks. If you don't use it, and accept responsibility for exacting the higher standards you want to see in this world, who else will? You're basically waiting around to bitch about the solutions someone else came up with that won't be any better than the mess we've got now.

    I was out on the street yesterday in front of the Bank of America protesting, I'm going again at noon today to learn about canvassing for the budget, and I have already contacted my Senators on everything I've mentioned above. My entire investment in time so far has been basically three hours total, including all the prep meetings, the interviews given to the press, and my protest.

    Or, put another way, Michael Lewis can suck it. Get angry, get active!
    posted by Lipstick Thespian at 8:36 AM on March 21, 2009


    Can you explain, please, what could possibly make any executive *deserving* of a million+ dollar retention bonus?

    I think it helps to divorce marketplace worth from inherent human worth. It might be somehow comforting to think that all executives are bumbling idiots, but yeah, some are worth a lot to a company--even in the millions of dollars--because they create more wealth than that for the company--wealth that they could be making for any other company willing to pay them for it, and wealth that keeps people employed. (Julia Robert takes in millions of dollars for a single movie--each of which is itself a kind of corporation--and I agree that her contract is worth that much if her name attached to the film brings in hundreds of millions.) We haven't, to this point, taken away the right of a corporation to make this decision about how they spend their own money; I don't see how we can do it, unless we also codify 'fair value' for every other contract a corporation makes. I think the reaction to this story actually denigrates the value of the employee by enforcing some arbitrary (when applied outside the context of the industry) limit on worth that is not being imposed on every other corporate expenditure and contract.

    That's not to say that we don't have a right to a say in how AIG spends its money now; but we're talking about a transition from one accepted standard (corporate practice within legal limits, whether or not you like what those limits are or are not) to a new model (taxpayer-supported) within one company, which for a company as large as AIG is a large shift in culture. Also, I would think there was some expectation in the negotiations that AIG should retain the standard business practices that exist across the industry in order to remain competitive (and thus not completely fall apart). Those practices didn't arise for no reason; they exist in the context of a competitive business environment. It would be great to see them changed, but if this is not done across the board at the same time, I don't get how it will work. It might sound all dreamy the idea that we can assert control over AIG and turn it into a model of what a corporation should be, but putting limits on AIG without doing so for their competitors could be putting them (and our huge stake in AIG) at disadvantage.

    Yet you're telling me that its good, just, right, and (more important) necessary that the government take money from me, a guy who actually works for a living, in order to give it to the incompetent morons who caused the problem.

    As I said before, I don't like how business is done and part of me is as eager about the coming class war as you are; at the same time I think a label like 'executive class' and the baggage you're trying to heap on it is about as accurate and useful as any racial stereotype. I don't think the bonuses necessarily should have been paid, which I stated; the responsibility for deciding that should have come long before the point where we're going after the recipients themselves, who i don't think are necessarily guilty of what everyone seems to be assuming (considering we know nothing about who they are, their ethical makeup, or their role within the crisis).

    I think the exposure of corporate greed and shaky practice is great, and I hope it does lead to business-wide changes in how companies operate. But at this point, I think the irrational, hyperemotional hyperfocus on this story ensures little more than that the next set of business-taxpayer negotiations will be 80% focused on bonus and compensation plans, much less focused on the other 99.9% of the real problem.
    posted by troybob at 9:56 AM on March 21, 2009




    Man, I wish I read this before putting on my Manchester United shirt today.


    Or this.
    posted by Infinite Jest at 2:12 PM on March 21, 2009


    Put aside for a minute that Timothy Geithner was partly responsible for letting this happen.

    I'm sorry, I just can't.
    posted by IndigoJones at 5:17 PM on March 21, 2009


    "I think it's sickening that they are being personally outed and targeted by the public, as if any of us would turn down money offered to us by an employer, whatever the circumstances, whether we feel it is deserved or not. We don't know that many of those employees didn't actually make money for the company that offset AIG's losses, or that they didn't keep the company from collapsing earlier, or that they are not acting ethically and responsibly now."

    It is taxpayer money, and if we weren't bailing them out, AIG would be bankrupt, and everyone there would be unemployed and getting ZIP for bonuses.

    If the UAW can renegotiate their contracts years after they were agreed upon, for their retired workers' health care, for the sake of sacrifice when our money is involved, so can people making bonuses in the millions. It doesn't matter that they weren't personally responsible. Maybe the timing's unfortunate for them. AIG is floating along by the grace of the US government, and this isn't the time to be arguing for the necessity of excessive compensation.
    posted by krinklyfig at 6:30 PM on March 21, 2009 [1 favorite]


    It is taxpayer money, and if we weren't bailing them out, AIG would be bankrupt, and everyone there would be unemployed and getting ZIP for bonuses.

    Maybe some of them would be working elsewhere. Unwinding derivatives portfolios for someone else, as that is one of the very few finance world skill sets that is still in great demand.
    posted by atrazine at 8:44 PM on March 21, 2009


    The part that really infuriates me is that there have actually been studies done that show that these larges bonuses don't actually increase productivity and may in fact hamper it. Maybe the bonus culture is not just a bad side-effect maybe it actually caused the whole mess.
    posted by wobumingbai at 6:36 AM on March 22, 2009


    I often wonder if this ballyhoo over 'bonuses' would be anything at all if they simply called it 'variable pay' or anything other than bonuses or gods forbid 'retention pay'. the reality of the financial services sector is that 30 to 40 percent of their salary is 'bonus'. So are we angry because they are getting what would otherwise be their regular salary? In other news: blame me I voted for Obama seems to be a growing sentiment. Perhaps the tide has turned and Obama will be the one to blame from now on. the AIG bonuses, the misspent TARP funds, the misguided, pork filled stimulus package are all going down on his watch.
    posted by Gungho at 8:59 AM on March 22, 2009


    atrazine wrote Maybe some of them would be working elsewhere. Unwinding derivatives portfolios for someone else, as that is one of the very few finance world skill sets that is still in great demand.

    I guess that's why I'm not making millions in the business world. You're seriously suggesting that people who drove their company into bankruptcy and are dragging the economy into a new depression might actually be hired elsewhere?

    WTF? Is the business world really that desperate for fuckups, incompetents, and the just plain stupid?

    I cannot envision a set of circumstances under which any sane individual would say "So, I see you worked at AIG and either helped ruin the company or were so stupid you didn't notice when others were fucking things up. We're looking for someone with that sort of skill, when can you start?"

    troybob wrote some are worth a lot to a company--even in the millions of dollars--because they create more wealth than that for the company--wealth that they could be making for any other company willing to pay them for it, and wealth that keeps people employed. (Julia Robert takes in millions of dollars for a single movie--each of which is itself a kind of corporation--and I agree that her contract is worth that much if her name attached to the film brings in hundreds of millions.)

    I think you're making a false comparison there. Julia Roberts has (or had) fans, people might say to themselves "she's cute, I liked her in Pretty Woman, I'll go check out her new film". But executives don't have fans, no one is going to say "yeah, I was thinking of buying a Ford, but then I found out that Dodge hired Joe Corporate, and man, I just had to see what he was doing for the company!"

    Executives are just administrators, and sometimes strategists. A good strategy is important, yeah, but again, I find it impossible to believe that out of a national population of 300+ million they're so scarce that you have to pay out millions to attract 'em. As for administration, I won't claim it isn't a skill or that some aren't better than others, but again it isn't rare.

    The idea that any CEO is directly and personally responsible for his company's income seems preposterous. Especially in light of the fact that no one seems to blame them when the company fails. Its a bit like football players and Jesus. When they score its because Jesus wanted them to win, when they fumble its because they messed up. When the company does well its because Joe CEO is an amazing guy who deserves to be, and must be, showered with millions. When the company does badly its due to market forces and not the fault of the godlike CEO who must now be showered with "retention bonuses" or he'll go elsewhere.

    You know that when America was doing so well economically back in the 1950's the average CEO earned about 12 times what the lowest paid worker at his firm did, right? Now the economy is tanking and we're paying CEO's 600 to 1000 times what the lowest paid workers are paid. Obviously correlation != causation, but I think the mere facts from the 1950's demonstrate that success does *NOT* in fact require that CEO's be treated like god kings.

    I do think we can argue that high CEO pay can be detrimental to a company. After all, every dollar that goes into the pockets of the execs is a dollar that isn't being spent on expansion, crushing the competition, reimbursing stockholders, etc.

    Gungho wrote "I often wonder if this ballyhoo over 'bonuses' would be anything at all if they simply called it 'variable pay' or anything other than bonuses or gods forbid 'retention pay'. the reality of the financial services sector is that 30 to 40 percent of their salary is 'bonus'."

    For me, no. I object to his executive pay no matter what you call it. For a lot of the people getting worked up? Probably. Which is, I think unfortunate, because no matter what the pay is called its too much.

    But, yeah, I do think that specifically calling it a bonus is hurting things. Everyone knows that a bonus is what you get for doing extremely well when the company is healthy, that these yahoos are getting bonuses for doing extremely poorly while the company is seriously unhealthy is of course a factor.

    As for your second point, I'd argue that the fact that financial sector morons call 30% to 40% of their salary "bonuses" indicates only that they know perfectly well they aren't worth what they're getting paid, so they have to disguise it. Again, I say screw 'em. The only things I can think of more worthless and parasitic than the financial sector losers who have ruined our economy are priests.
    posted by sotonohito at 12:53 PM on March 22, 2009 [1 favorite]


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