This blog printed on 100% recycled electrons.
AIG is about to funnel $165 million of our $170 billion in life support into executive bonuses (boni? if only!). The corporate lawyers plead that is contractually bound to pay the bonuses to "the best and brightest talent" that has run the company into 80% government ownership.
These are probably the same lawyers arguing that AIG has no obligation to the pension funds that lost money thanks to AIG's risk-taking, fishy books, and assurances that they wouldn't lose big on the subprime crisis. (Also suing AIG: New Orleans, Ontario Teachers, Canada.) Their lawyer brethren have certainly won the right for corporations like United Airlines to default on pensions for their rank-and-file employees, and pensions are certainly a contractual obligation. Defaulting on or even simply "deferring" some executive benefits until those executives do something other than turning the global economy into a Ponzi scheme shouldn't be a problem.
The Year in Review, oh, and Merry Christmas!
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I used to be against Winter Wonderland at Falls Park but I have to admit,
the pics on my bike this year have been good, so I guess I am okay with the
city ...
11 hours ago
If a company is insolvent or broke, they have no obligation under contract to pay bonuses or provide raises. In this case, the management has been so deplorable, not only should AIG not provide bonuses, but some of the same idiots who got them into the predicament are still managing AIG. We live in a society that normally doesn't reward poor behavior. If the infusion of government funds is the only reason they are able to provide those bonuses, we should have had string attached that specified no government money for employee bonuses.
ReplyDeleteScrews those hot shots and their bonuses. Let them sue for breach of contract.
ReplyDeleteThis makes me so irate!
ReplyDeleteHeard that some of the parts of the company are fine and some are bad. So then why not use the profits from the good parts of the company to bail out the bad parts. Why in the world are they getting ANY taxpayer money????
It's time for a taxpayer revolt with a capital R.
This stuff is one of the main reasons why we threw the Republicans over in the last two federal elections. I hope the Democrats can end it, but I have my doubts.
ReplyDeleteContracts?! What a lame excuse from the same folks who are throwing mortgage contracts and UAW contracts under the bus.
ReplyDeleteBonuses imply performance. Lacking performance a penalty clause and invoking it is more appropriate - whether for the banksters or the folks who lost $3 billion in the state retirement fund.
We threw out the right wingnuts because they forgot to act like TR or Ike. Now some democrats are acting like they are the party of Wall Street. If they keep this up; they won't last long.
9:51 is right. Last I heard, bonuses were for good performance. Why these folks are getting bonuses in the first place is beyond me.
ReplyDeleteBut it is not just the recipients who should be targeted (like the NY Atty Gen is doing). How about the guys who gave them the contracts and are signing the checks? And why didn't the government address these contracts before the money was handed over?
To take it further, the bonuses are a drop in the bucket compared to the overall AIG bailout (the same argument that apologists for the budget bill use when talking about earmarks). There ought to be scrutiny over where else the money is going, too.
Back to the bonuses..I don't think the government should be telling businesses how much they can pay people. Except, of course, if the U.S. taxpayer is paying them.
And 9:51, maybe that's what ought to be done with GM and the UAW contracts. What do you think about that?
ReplyDeleteWhy can't we, the people of the United States of America, file class-action lawsuits against each and every one of these bozos individually? Such actions could be entirely independent of the bonuses. All it would need would be some formula by which we can calculate how many dollars they have cost us. In that case I suspect they'd each lose their shirts a couple of hundred times over.
ReplyDeleteIf we are all worried about legalities (and NYT's Andrew Ross Sorkin makes a reasonable argument about the need to protect contracts and the rule of law), the government could solve this problem with one word: audit. Send in the IRS. I'll bet they could recoup at least $165M in corporate tax dodges and other creative accounting.
ReplyDelete