I'm reading a remarkable story on Bloomberg about retention pay bonuses to be paid out to 7,000 AIG executives so they won't quit. I'm wondering: where would they go in this economy? Who is hiring insurance executives away from AIG?
"(Congressional) Hearings may put new pressure on AIG to detail why managers will get as much as $4 million after the company accepted a taxpayer-funded bailout now valued at about $150 billion and promised to curtail pay. Cummings is asking AIG to tell Congress the scope of its retention efforts, originally described as covering only 130 executives."
6 comments:
LOL. Good point about them leaving.
However, they can come to Florida and open new little baby insurance companies and take instant insureds from Citizen's. Hartford is bailing out of Florida and State Farm is not writing much, so they have an instant client base here for new business.
Gimleteye writes:
I would like to the hear the argument FOR any bonuses to executives for financial or insurance companies that take our tax dollars for their survival purposes.
OK...Here is the argument FOR bonuses to top executives: If the US taxpayers want to ever get their money back I would imagine that they would need AIG's top performers to continue to be top performers for the company.
AIG is a HUGE organization with a very profitable global insurance business and a completely screwed up proprietary trading organization. As a taxpayer and thus a bondholder in AIG, its survival and thriving is of its core insurance business is of paramount importance. Keeping the producing insurance executives (who, BTW, CAN get jobs at ANY other insurance company in ANY economy) is vital to taxpayers getting their money back.
Gimleteye writes:
Good points, but everyone else in this economy is suffering because senior managers in the global finance and insurance companies screwed the pooch.
We are a long way from recovery. As a taxpayer, I still question why there should be any bonus compensation when the Treasury is providing security for private corporations that would otherwise be bankrupt.
Maybe bonuses should be put in an escrow account, to be released gradually as corporate debt to the US Treasury is paid down.
"...I still question why there should be any bonus compensation..."
In many industries, and I expect this is one, bonus is a standard part of a compensation plan. What you are suggesting is that people at these companies take a salary cut. Once again it is going to be hard for us to get paid when the best performing employees are going to be running for the doors if not now, than the minute the economy starts to turn around. This is simply not good business sense and it is armchair quarterbacking (by me too) an industry and a company neither of us know anything about.
It was NOT the Bush Party that fought for the Bank Bailout or the Auto Bailout - It WAS the NANCY PELOSI GANG. The Republicans fought for intermediary committee to enforce rules and regs. on the money.
Chapter 11 and 13 are NOT A BAD THING, they allow for re-organization of bad business strategy. If you run your business into the ground, that is where you should be made to start a re-structure plan.
It allows for NO BUSINESS AS USUAL - Fire all the TOP BRASS and re-evaluate the business plan.
In a Chapter 11 and 13, all contracts are subject to re-negotiation or cancel; thus allowing for defunct or unprofitable obligations to be released. INCLUDING: BONUSES, Employment Contracts, Union Contracts, Debt, Futures, Etc., allowing the company to try and make "it's own" way back to profit margins within legal and shareholder compliance.
The old saying, "Make it or Break It" comes into play. Corporate Chapter 11 or 13, are at the heart of a Democratic Business Model - Only the Strong Survive NOT Taxpayer Bailout to the Rescue!! Where will it end??
I agree with the above Poster - TEA ANYONE?? Let's all take our Taxes and put them in an Escrow (IRS Compliant)
account until the Government can prove they are honest and responsible enough to at least use OUR money in accordance with the approved laws - NOT ANYWAY THEY WANT TO SPEND MY MONEY!!
Who does the Government think they are - AIG?
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