Comments on: Financial Lessons We Can Learn from AIG Executives

By: spicoli

spicoli — Fri, 03 Apr 2009 19:43:56 +0000

It is funny that this was such a big deal two weeks ago when it happened. Now it is all but forgotten. Is it any less of a big deal now? I don’t think so.

By: Beth

Beth — Sat, 21 Mar 2009 02:12:27 +0000

Interesting article. I wonder how much the current administration knew of the specific contract details.

By: SeekingLemonade

SeekingLemonade — Fri, 20 Mar 2009 20:34:43 +0000

As some posts point out, there is a wide discrepancy in how some are treated vs. others.

This is nothing new in this society. Compare teacher’s salaries with those of plumbers, or almost any other profession.

By: Ken

Ken — Fri, 20 Mar 2009 17:21:08 +0000

If we did not bail out AIG and the company went into chapter 11 … Would the executives still get bonuses?

By: David G. Mitchell

David G. Mitchell — Fri, 20 Mar 2009 14:22:53 +0000

Dragonfur — While I respect your opinion and thank you for sharing it, I do need to clarify the nature of a retention bonus. A retention bonus is generally paid after an employee remains on the job through a stated period. It is VERY common for employees to resign after receiving a retention bonus because they typically have been looking for a new job during the retention period. Accordingly, I cannot agree that the reasoning of the article, or the reasons for giving contractually required bonuses, is either fallacious or disingenuous. Quite to the contrary, actually, as I believe I was both honest and sincere.

By: Steven

Steven — Fri, 20 Mar 2009 13:45:58 +0000

I disagree. If rank and file union members must give back before a union contract is renegotiated, those AIG folks should have to give up their bonuses as well.

Congress is right to tax them at a 90%

By: EEinNJ

EEinNJ — Thu, 19 Mar 2009 19:24:18 +0000

It’s entirely reasonable, and should be easy, to simply withhold that bonus money from the next tranche, and let AIG figure out internally how to make up for it. They are supposed to pay it back eventually, anyway- that is, if they don’t go bankrupt.
As for contract law, well, the Treasury owns 80% of the preferred stock, they can call the shots. People and companies cancel or amend contracts all the time.

By: RAJEEV

RAJEEV — Thu, 19 Mar 2009 18:41:37 +0000

I agree with you that in these times we need be very careful before taking up an offer. WE must also:
1. Know our value in the market place and evaluate the offer vis a vis market offering for similar profile.
2. Negotiate on both monetary and non monetary aspects.
3. Maybe check out financial reports and corporate governance issues of the prospective employer.
4. Negotiate well on severance.
5. Get unemployment insurance , if no socila security provided by the federal govt.

By: Ann

Ann — Thu, 19 Mar 2009 17:53:18 +0000

I finally got an answer to a huge question I’d had about those bonuses when I read the linked article! In the broadcast media, they seem to always fail to mention that at least the majority of those bonuses were retention bonuses. Funny, but I’d be willing to bet that most of those broadcasters have the same sort of arrangement and would have no qualms (and in fact insist) concerning taking such bonuses themselves.

I’ve benefited from severance packages and stay bonuses and understand what happened much better. I’m also a tad disgusted (once again) with media’s presentation of the whole thing.

I’m extremely curious about one thing now and hope someone knows the answer. If a company went bankrupt, what would happen regarding retention bonuses? Would the companies be required to pay? Would the bankruptcy court be able to require renegotiation? Not that this applies here, but I am curious!

No matter what, I’m furious that our congressional idiots are considering setting a precedent regarding heavy taxation of retention bonuses, no matter how they word it! If there is a bankruptcy loophole regarding renegotiation of such bonuses, I could see making bailout funds contingent on bankruptcy laws… come to think of it, maybe that’s what should happen anyway! Not sure.

Thanks for the clarification! Negotiation is always important when accepting a position.

By: manojar

manojar — Thu, 19 Mar 2009 16:07:59 +0000

Hmm…
Bonus = promised to be given when the going would be great. under normal circumstances, when the going is not so great (i.e., they screwed up), then bonuses will not be given, and they would be fired.
These guys screwed you guys up big time, and you’re supporting them? I find it hard to digest!!