Outing AIG's Bonus Babies: What's the Point?

Is there a point in divulging the names of the AIG (AIG) executives who received bonuses? There seems to be a frenzy on the part of some blogs and the MSM to identify the recipients and even publish their pictures.

Given that credible threats have been made towards AIG and those that received bonuses, publishing information that could lead some lunatic to them seems awfully irresponsible. Whatever possible good may be accomplished (I can think of none), the potential for causing great harm would seem to argue strongly in favor of some reticence.

One could argue simply that those who received bonuses are deserving of the same right to privacy as any of us. I know that argument will be attacked with lots of pious counters about receiving government money, our right to know as shareholders etc. So be it. Let me throw something else out there.

How about granting a presumption of innocence to some of these guys. Do you know who took the money and contributed nothing in return? Of course you don’t, and neither do any of the high-minded accusers. Quite probably there are some pretty smart guys in AGIFP who could have checked out at the first sign of trouble and walked across the street to a job that would have paid them as much or more than they made by sticking around. It’s also pretty likely that some of them saved us more than a little bit of money just because they knew where the bodies were buried and how to unwind part of the mess at the least cost.

Damning all of them without knowing all of the facts is unfair. Putting their welfare and that of their families in jeopardy is not something I want to be responsible for.

Barring any more lunacy, I suspect that this will be the last I write about this issue. It’s a media-inspired tempest that means little in the larger scheme. Thankfully, the Fed came along yesterday and pretty much sucked the air out of it.

Comments

[Frank H:]

AGREED

Mar 19 01:45 PM

[Frank H:]

100% AGREED

Mar 19 01:45 PM

[AndrewBaker:]

Agreed that naming then is not good, but don't agree that even the good ones can just walk into another job if they wanted to so should have their bonuses. A lot of the people responsible for AIG (and other financial companies') troubles are traders and gamblers who put their own interests above that of everyone else in the expectation of earning big bucks as a result. Like all losers who bet wrong, they should take the loss on the chin. Still having a job is a bonus in itself, especially when you consider the now unemployed as a result of these bad bets.

Mar 19 01:54 PM

[market ace:]

This is why they will not disclose the list, because most of these bonuses were paid overseas:

According to the UK Guardian, "in addition, to AIG providing $121m to 6,400 employees across the rest of its sprawling global empire."
Nearly half of those retention bonuses are for the staff of the Financial Products Division which is almost single-handedly responsible for the ills which have befallen AIG and, by extension, you and me.

The Financial Products Division is located in … London . Mayfair, London .

According to the Guardian AIG paid "bonuses of $450m (£322m) to staff at the London-run financial products division that crippled the company with vast losses on toxic derivatives."
That would be $450 million of your money. And mine

Mar 19 01:58 PM

[reality chk:]

It is quite reasonable for people (workers) to expect a share of a company's success.
Honest people have nothing to fear.
Only those that do their dirty deeds in the shadows and in darkness. How is it posible for someone at AIG to expect a bonus?
Bonuses are based on performance. What did these people do to deserve a bonus?
Typicaly bonuses are 20% of the annual wage.
These people make over $5M / year? with a $1M bonus to keep them doning such a great job?
These people should be in Jail.
Respect their privacy, do it behind closed doors and ensure the taxpayers who's money YOU ARE PLAYING WITH.

Mar 19 01:58 PM

[NYJerr:]

Pay them off with the toxic paper they created in the first place. It will clean up AIG's books and instantly create a market for this pile of s#$t.

Mar 19 02:10 PM

[gcgetit:]

These employees worked in good faith that they would be payed as promised. The government didn't "take over" these companies until late in year. It is very dangerous for our US Goverment to try to run these companies when they can't take care of their own business. (ie: passing budget bills in March that were due in September)

Mar 19 02:17 PM

[tshk1221:]

These government bureaucrats who do not know how insurance industry works in terms of compensation and bonuses are driving the public insane for these little bonuses. How can a for-profit insurance company be operated properly without employees who receive monetary compensations based on sales-driven performances? AIG is not a non-profit government entity which can be operated for a compensation of $50k a year for an employee.

How come these bureaucrats do not rage against the bonuses to be paid to the employees of Fannie Mae? Fannie Fae's historic recklessness in accepting absurd and exotic mortgage loans from banks and churning out below-junk-bond like MBSs played a major role for this mortgage crisis, too. These bonuses for Fannie Mae execs must be stopped immediately, too. In addition, Fannie Mae employees officially belong to the government. Therefore, they just need only $50,000 to $90,000 annual flat pay with no annual performance bonuses. Why do the government employees need those huge bonuses?

Once the government gave Edward Liddy general right to restructure and operate tangled AIG as CEO, the government including the bureaucrats must trust him unconditionally until this mess in AIG is resolved. Edward Liddy is not one of the Wall Street greed-trapped CEOs or incentive-crazy mortgage bankers and lenders. All he wants to do is to finish his job for his honor and duty given by the government for $1 a year.

I just feel so sorry for Edward Liddy who could have been paid more than $5 million a year in a different company as CEO.

It's better for AIG to just declare Chapter 7 bankrutcy. Edward Liddy needs rest home.

Mar 19 02:32 PM

[Dirk:]

BS. The name of every sex offender is publically available and their names pictures and exact addresses are circulated to the entire neighborhood. Who has done more damage, these guys who have sunk the entire world economy and cost the govt $170 billion, or someone who has fondled a kid? You think sex offenders dont live in fear? But we do it anyways to shae and embarass them. Heck we even print the names of guys who visit prostitutes in the paper. Talk about moral risk if one can blackmail the gov't for millions and not even face reputational risk. Get real!

Mar 19 02:41 PM

[reality chk:]

Is it better to let this company go broke and then no-one gets anything? Every person going to work each day is doing it based on good faith, but they don't demand multi millions as compensation plus bonuses. GET WITH THE REAL WORLD. These actions are criminal. These people are not competent to do their job based on the results. Like it or not at this point the Taxpayer owns this company until the federal money is paid back. until then they have to respect the Taxpayers rights or give the money back and make on your own merits.


On Mar 19 02:17 PM gcgetit wrote:

> These employees worked in good faith that they would be payed as
> promised. The government didn't "take over" these companies until
> late in year. It is very dangerous for our US Goverment to try to
> run these companies when they can't take care of their own business.
> (ie: passing budget bills in March that were due in September)

Mar 19 02:44 PM

[Fedupofallt...:]

The amounts are staggering, the morality is questionable at best and the transparency is frankly zero.

That said, the politicians KNEW about this. The Treasury KNEW about this - maybe not the Secretary, but the treasury as a unit (and since they tar all 113,000 AIG employees as "AIG" its a fair point in my mind). the Fed KNEW about this - It may well be that certain members of congress/ the House KNEW about this.

Yet, ALL of these people want to point fingers, incite the public and shame 112,900 perfectly innocent employees.

In 5 hours of questioning yesterday Ed Liddt answered 3 or 4 questions multiple times. EVERY person though wanted their chance to be outraged in front of the cameras.

YES, this is an outrage, YES, this is unbelievable. YES, it must stop - But lets start with the lawmakers, the Govt officials and the Execs who let it happen and work down. Thel ittle people at the bottom, fine, go lynch them - prove that we are still cavemen at heart - Where are Greenberg (although it may well have been different had he not been outed - we'll never know), Willumstad and Sullivan today - these are the people we should be asking questions of. These are the people we should be vilifying. These are the poeple who should pay for this.

Mar 19 03:10 PM

[tshk1221:]

The government must lay off all the employees of AIG including Edward Liddy and have them replaced with new government employees with a pay of $30,000 to $100,000 a year with no bonuses and have them run AIG until the loan gets paid off.

Mar 19 03:40 PM

[halconnoche:]

Heres a suggestion. Any politician that took a campaign donation from any company that received bailout money should be required to pay that back to the treasury or have their name and address published. Wait. I think that address is 1600 Pennsylavania avenue.

Mar 19 07:10 PM

[User 302395:]

As bad as AIG and other banks' traders and execs may be, having the govt run the firms is a dangerous idea, since our government is even more reckless and incompetent (Madoff?!?!)

The banks took extra risks to make more money (not the most honest, but at least its understandable); what's the government's excuse?

On Mar 19 03:40 PM tshk1221 wrote:

> The government must lay off all the employees of AIG including Edward
> Liddy and have them replaced with new government employees with a
> pay of $30,000 to $100,000 a year with no bonuses and have them run
> AIG until the loan gets paid off.
>

Mar 20 09:26 AM

[mediapro:]

Here's a better idea.

Let's publish the salary and bonus structure for every employee earning more than $250K per year in every company that has received TARP or TALF funds.

While everyone is getting exorcised over the AIG bonuses, these payments pale in comparison to the money AIG has paid Goldman, Merrell, and a host of other firms holding their toxic paper. Merrell and B of A should be investigated and prosecuted for their backroom takeover deal and billions in bonuses.

What would publishing such results prove? It would expose the exhorbitant, ridiculous sums of money that these financial "wizards" are paid for moving money around. Finally, the average Joe that struggles from paycheck to paycheck could see the obscene pay disparity between people who actually work for a living and those who are now living off our money.

Personally, I'd like to see the IRS take a run at the entire bonus issue. While small businesses and individuals take it in the shorts and pay the full tax witholding, FICA, SUI, etc tab, why is it legal for large corporations to escape their share of these costs by skirting the law and providing a bonus for what should be a salary? These Captains of America don't pay a dime of Social Security taxes after they pass the $106K threshold. Can someone please tell me why?

For people who don't count the payroll, FICA, SUI, etc. automatic worker payroll contributions while conveniently ignoring the "bonus structure", offshore accounts, shell businesses, and other manipulative uses of the tax code by those who can afford tax attorneys, don't be so quick to condemn the extra pittance through earned income tax credits, adjusted rate schedules for wage earners and such put into the pockets of those who actually contribute a day's labor for a fair wage vs. the incredible sums paid to those who move money through the system. Look where that system of rewards has put us.

Mar 21 08:52 PM

[campbell:]

Did the financial products division in London operate on its own without knowledge of top executives of the risk they were taking(rogue trading) or did top execs okay taking these risks with the whole company so the traders were just following orders?

If the company had not been bailed out with TARP and gone bankrupt would these bonus payments take precedence over other claims in a bankruptcy court?

Did I read in another post that these bonus opayments were not based on performance but just a way of getting around paying with holding tax at an earlier time and actually regular compensation?

Mar 22 01:24 AM

[mediapro:]

Campbell,

You are an astute observer. The game of deffered compensation, bonuses, offshore tax havens, writedowns and other manipulative tactics are the same ones that most taxpayers will never enjoy.

Ask yourself, why should it be legal for one employee and employer (usually the self-employed and small business owner) to play by the rules and receive salaried compensation, while another employee and employer (usually large corporations) to avoid their share a taxes through these manipulations? IRS, are you listening?

While you're at it, why not ask anyone to explain to you why salary compensated employees with gross incomes above $106K/year and their employers are exempt from social security taxes for any sum above that amount?

I've asked the brilliant Captains of America, who seem to populate this site, that question in numerous posts and have yet to receive an answer, ANY ANSWER!


On Mar 22 01:24 AM campbell wrote:

> Did the financial products division in London operate on its own
> without knowledge of top executives of the risk they were taking(rogue
> trading) or did top execs okay taking these risks with the whole
> company so the traders were just following orders?
>
> If the company had not been bailed out with TARP and gone bankrupt
> would these bonus payments take precedence over other claims in a
> bankruptcy court?
>
> Did I read in another post that these bonus opayments were not based
> on performance but just a way of getting around paying with holding
> tax at an earlier time and actually regular compensation?

Mar 22 07:48 PM