AIG: No Bonuses For Top Executives This Year

It’s apparently not entirely self-evident that when your company needs a taxpayer bailout you shouldn’t get a “bonus,” so money-sucking insurer AIG has written a letter to NY Attorney General Andrew Cuomo promising that their top executives will not get bonuses this year.

In the letter, AIG says they are “extremely grateful” for the support they have received from taxpayers, and as their way of showing how “prudently” they are acting, they will not be giving bonuses to their top seven executives. The rest will get bonuses, but won’t be getting a raise this year.

They also promise that they are “developing” a way to insure that no taxpayer dollars are used for bonuses for the top 60 executives in the future.

Cuomo reacted favorable to the news, says ABC.

We believe AIG’s step is a positive step,” Cuomo said on a media conference call following the release of the letter. “I enocurage other Wall Street firms to wake up to the new reality on Wall Street and follow AIG’s steps quickly.”

Letter To Cuomo (PDF) [ABCNews]

Comments

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  1. Red_Flag says:

    Huzzah for Cuomo, having the balls the Feds didn’t.

  2. PittsburghJen says:

    I don’t understand why anyone in the company, in the top tier or the second to top tier, will be getting a bonus this year. You broke your company and are taking tax dollars to fix it. You don’t get a bonus for that. This is not behavior that is to be rewarded. This is elementary behavior modification, people.

    • blackmage439 says:

      @PittsburghJen:

      I’ll bet the only pinch every single one of those executives are feeling is having to downgrade from a $500,000 house to a $400,000 one. Or *gasp* having to sell their Bentley in favor of a Hyundai Genesis. These companies can “go after” their “white collar” workers all they want, but until they start deifying their executives less, and treat the rest of us more humanely, we’ll continue seeing the same garbage.

    • ilovemom says:

      @PittsburghJen: They get paid for bilking people out of money. I’d say they had a record year.

    • ADismalScience says:

      @PittsburghJen:

      Bonuses at financial firms are given in lieu of general compensation. Base salaries for rank-and-file on up to managing directors are below the national average for other industries.

      • PittsburghJen says:

        @ADismalScience: Why call them bonuses, then?

        • ADismalScience says:

          @PittsburghJen:

          Because they’re ostensibly tied to performance relative to your objectives rather than just for showing up. The idea is to make financial industry compensation more relative to your performance than it is in other industries.

          The model has obvious difficulty when you can buy a lot of mortgage-backed assets, APPEAR to be incredibly profitable, and then suddenly become insolvent

        • ceejeemcbeegee is not here says:

          @PittsburghJen: Tax reasons. Salaries are taxed at a different (usually higher) rate than dividends/bonuses.

          • JustThatGuy3 says:

            @ceejeemcbeegee:

            No, they aren’t. Bonuses and salaries are treated as wage income, exactly the same tax treatment. Dividends (which are paid to shareholders) are a different thing altogether.

      • ludwigk says:

        @ADismalScience: That just means they picked an industry that is more performance-based than others. All the more reason their compensation should reflect the state of their industry, and/or their particular firm.

      • ilovemom says:

        @ADismalScience:

        So if the company stock tanks from, say, $60 to $2 that year you get no bonuses? Or are we to assume that the hard work the execs did saved the stock from going under a dollar?

        • ADismalScience says:

          @ilovemom:

          Say you’re an advisor at, say, AIG.

          You met your specific performance objectives – your “practice” grew despite enormous challenges. And you could easily take your book of business independent! After all, financial advice is like practicing law or medicine, and you could easily elect to go into business for yourself.

          The company you work under has an investment bank full of people you’ve never met who underwrote billions in CDO’s, which lost a lot of money. How is that relevant? Isn’t YOUR performance what matters?

          • snowburnt says:

            @ADismalScience: It depends on their bonus structure. One company I was with gave me a bonus if I billed more than was expected. Another gave me a bonus if my department did better than expected.

            The only problem that remains is where that money is coming from.

          • katylostherart says:

            @ADismalScience: but the practice didn’t grow. it failed, it shrank, it imploded, it nearly died. if bonuses reflect performance than they need to actually refund aig some paychecks.

            • ohenry says:

              @katylostherart: With all due respect, I think you’re missing his main point here. The practice of the employees who are getting this bonus likely weren’t in the sector that caused AIG’s implosion, which was driven entirely by the mortgage insurance policies collapsing.

              Let’s give another example. Let’s say that you’re a managing advisor for the Auto insurance sector of AIG, which is doing just fine despite all this stuff going on. Is it REALLY fair that you don’t get your bonus, despite your success, because of the boneheads who did all the stuff with the mortgage securities?

              No, it’s not. And that, I believe, is the point ADismanScience was trying to make.

              • katylostherart says:

                @ohenry: oh no i get that. i’m sure there were loads of people that did not screw the business into the ground either knowingly or otherwise. but, 7 people? that’s it? does all the blame fall on those 7 people? according to wikipedia there are 116k employees. does that one group of seven truly hold all the accountability? is that how big the board of the directors is? that’s what i want to know. while i’m sure those lucky 7 had the largest hand in this disaster, i sincerely doubt that it was only that 7. that’s why i think it’s ridiculous that they’re the only ones not getting bonuses. there had to be more people responsible for this clusterfuck, especially say, all the people one tier directly below them, or even two. how many steps down the ladder before you get to innocence and how many of those steps are still getting large bonuses?

      • GirlCat says:

        @ADismalScience: Yes, but in those other industries if the company fails, you get laid off, regardless of whether your performance contributed to the failure. The parallel here is that in finance if the company fails, you shouldn’t get your bonus, regardless of your performance. Finance people are behaving like insurance companies–they only want to take risks that benefit them. If things turn sour, they all want to loophole out.

        • ADismalScience says:

          @GirlCat:

          Look at unemployment statistics. Read the news. See how many financial system employees are getting sacked every day in this country. Tons of people are getting fired.

          Hundreds of thousands of banking employees “loopholed out” alright – into unemployment offices.

      • Landru says:

        @ADismalScience: I think you’ll find the insurance industry “rank and file” haven’t received much of anything for years as far as bonuses or salaries. This convieniently evens out the averages for the obscene salaries that “managing directors” make.

      • katylostherart says:

        @ADismalScience: i’m sorry i’m not feeling sorry for them. it’s not like they make minimum wage. it’s not like they have a small salary. and only not paying 7 people bonuses isn’t like they really aren’t paying a bunch of other people that didn’t need it and had a huge hand in sinking the company. maybe their lowest employees, you know the ones who had no decision making ability whatsoever, should still get their year end bonuses, but absolutely no one with a managerial in the headquarters offices should be given anything for this fuck up.

        there’s no way the base salary of everyone other than those seven people is low enough to make these payouts necessary compensation.

  3. savdavid says:

    They will just double his bonus next year or give it to him in other ways or under the table. The Rich do not play by the same rules the rest of us do.

    • PittsburghJen says:

      @savdavid: I know that it goes on but having it thrown in my face like this just makes me angry. Where’s my bonus for not bankrupting a company this year? Shoot, I finished 2 years of national service this year and the feds aren’t sending a bonus check my way for that.

  4. Blueskylaw says:

    That letter was written by lawyers, puzzle makers, psychologists, and cryptographers.

  5. Oranges w/ Cheese says:

    Your entire freaking salary is a bonus when your company is going down the toilet. I think they could stand to lose a little more then the “bonuses”.

  6. LogicalOne says:

    “It’s apparently not entirely self-evident that when your company needs a taxpayer bailout you shouldn’t get a “bonus,” “

    For several years, it hasn’t been entirely self-evident that when your company is LOSING money, executives shouldn’t get a bonus or a raise.

    For several years, it hasn’t been entirely self-evident that you shouldn’t give loans to people or businesses that don’t qualify for them.

    For several years, it hasn’t been entirely self-evident that you don’t buy up loans, bonds, and securities from other companies without investigating the risks involved.

    For several years, it hasn’t been entirely self-evident that you don’t give bail-out money to companies without imposing terms and conditions that spell out the purpose of the bail-out. Otherwise, they’ll spend it on something else, like acquisitions or bonuses or business meetings in the Bahamas.

  7. Git Em SteveDave loves this guy->★ says:

    They will not get a “bonus”, they will instead get a “sunob”, which wasn’t in our letter. So NYAH!!!!

  8. Cornelius047 says:

    In a TED video from Steve Levitt (author of Freakonomics), Levitt suggests that CEOs and Exec Board members pay themselves a lot of money in salaries and bonuses in an effort to not appear “weak ‘n shit.”

    Video, “weak n’ shit” at 20:30ish:

  9. Saboth says:

    On the flip side, I work for a small company that usually makes around 18-20 million dollars a year. It has 2 owners. I find as we make more money, they get greedier and greedier. For instance, this year we are slated to make an additional 4 million dollars over what we made last year, due to the hard work, late hours of all the employees, and yet our Christmas bonus has remained a stagnant 500 dollars for the past 5 years. Usually they give us all a christmas turkey or ham, but not this year. Also they would usually have a “turkey luncheon” at work for everyone, but apparently not this year either. (btw, only people in upper management get the 500 bonus, 98% of people here get nothing besides their turkey/ham).

    • ilovemom says:

      @Saboth: I worked for a small business that once gave out a $50 401k contribution as a Christmas bonus. It was insulting. Get out while you can.

    • kris in seattle says:

      @Saboth: we get $100 every Christmas… I always look forward to it. $500 would be outstanding! But, I’m sure it’s all about location.

    • Oranges w/ Cheese says:

      @Saboth: I got $200 last year which was nice, but not really enough to put presents under the tree or anything…

      • SudhamayiKabong says:

        @Oranges w/ Cheese: Really? $200 bucks might not put a lot of great stuff under the tree, but yeah, you’d be surprised at what you can manage when you engage a little creativity. ;)

    • TheWillow says:

      @Saboth:

      At my old job – the first X-mas I got a $100 gift card to Bloomingdales (which I sold to my aunt!) and a company sweatshirt.

      The second year, without warning anyone, in lieu of a “bonus” they decided to have a drawing at the company x-mas party (with prizes ranging from a $20 USB key to an iPhone, where not everyone would get a prize). Our office manager, who had quit earlier that day (4th in 2 years) got plastered and let most of the music department enter about 4 times.

      I no longer work there. :D

      • Phillip M. Vector says:

        @TheWillow:

        I used to work for Microsoft as a temp. We had a holiday party and they were giving away Zunes. I was being let go in 2 days, so I was bummed. My old manager gave me her winning ticket for a zune to cheer me up. I went to turn it in and they said it wasn’t for temp workers and took the ticket.

        THAT sucked.

        • TheSpatulaOfLove says:

          @Phillip M. Vector:
          That’s downright shitty.

          Chalk one more reason up to not use any M$ product. Going on 18 months of being M$ free, and it’s been great!

          • SudhamayiKabong says:

            @TheSpatulaOfLove: In my experience, it’s been pretty common that temps almost never get invited to company functions, much less get handed company-branded merchandise, especially within two days of the temp-job’s end date. I’m pretty sure it’s a liability thing, because even as a permanent employee in my current job, I’m occasionally handed merchandise with the caveat that I cannot lend it out to non-employees, and that if it turns up on EBay I’ll be shit-canned so fast that my head will spin off my shoulders and launch into orbit. Now apply that to a guy whose job has an expiration date, and who owes no real loyalty to the company he works at when all is said and done, and you can see how it might make the guys in legal feel a little uncomfortable. That’s not meant to disparage Vector’s integrity as a person, or as a temp-employee working at Microsoft, but they’re just not likely to take a chance on a temp one way or the other. Also, temp jobs are temporary by their very nature, so it wasn’t so much that Vector was being “let go” as it was more likely that his temporary employment was at its natural end. I don’t doubt that it may have been a bummer, especially if he had worked there long enough to get used to being there, but it couldn’t have been entirely unexpected. So while there may very well be a million different reasons to hate Microsoft (It always looks silly when you people do the M$ thing, because it’s one word, not two, and besides, there isn’t a company on Earth that isn’t out to make money…), that a temp was allowed to go to a company holiday party but not allowed to collect on a free Zune that he wasn’t entitled to in the first place isn’t one of them. Now I’m not saying this as a Microsoft apologist. My 360 (bought because it was the cheapest of the two HD systems and I’m a game-freak…) just died out of warranty after updating to the NXE, a problem that Microsoft wants a cool $150 to fix despite the timing being way too coincidental to believe it wasn’t caused by the update. So there’s no love lost between myself and them. I just wanted to nip that in the bud before the inevitable BS gets spouted about how I obviously work for Microsoft, or am a Microsoft fan-boy. No, I just know what it’s like to be a temporary employee. Vector’s account might suck, but it’s not out of the norm when it comes to being a temp-worker. Whether or not it’s acceptable treatment is for another discussion, but let’s just leave the irrational Microsoft bashing for when it’s truly deserved. ;)

    • fuzzymuffins says:

      @Saboth: i was promised a bonus this year that would amount to 40% of my salary. we’re on track to double our business this year, and i know others in our small company of 30 people are looking at good bonuses too. i’m an “early” employee, but not a partner of the company.

      if this indeed happens, i will certainly be grateful, considering the shithole bush and co. have left for us all.

      i wish good fortunes on us ALL soon.

  10. gggtur says:

    Breaks my heart!

  11. mushroom104 says:

    I don’t understand why anyone at AIG is getting a bonus, top 7 or not. Someone has more explaining to do.

    I work for a landscape architecture company. Our business has fallen off dramatically in the last year due to the collapse of the housing market. I haven’t received a bonus all year. Everyone else at my company has had their hours cut back by 20% and their pay cut accordingly. Several people have been laid off. Those of us that remain are lucky to still have a job and are hanging on by our fingernails. This is not something unique to the company I work for, it’s happening across the board at every company even remotely related to the housing industry.

    Again, why is ANYONE at AIG getting a bonus at all? Keeping your job at times like these is all the bonus you should need!

  12. henwy says:

    @ PittsburghJen

    I imagine for the same reason they still call tips, tips. It’s certainly not what it was initially intended to be.

  13. BeyondtheTech says:

    Quoting an AIG executive to his children, circa Christmas 2008:

    “Sorry, kids. Your favorite hibachi chefs from Japan won’t be staying over this year to cook our Monday dinners. But, I’m sure we’ll find a way to get by…”

  14. 310Drew says:

    I disagree with just about everyone else posting on this topic. Just because parts of AIG are not doing so well and need help does not mean every employee at the company should be held responsible. Many of them are just that, employee’s that did the job they were told to do and had nothing to do with the losses the company is having on some of it’s other business other than insurance.

    Most people that work for a major company have a specific task to do, and compensation is based on how well that task is done by that person and that persons respective department.

    If you do your job and get raving reviews all year long, and your department performs at the same level you are, and your compensation was explained as X amount per year plus X amount as a bonus based on performance standards being met you would expect to be compensated fairly.

    Punishing the wrong people is great way to ruin a perfectly good company. Remember back in elementary school when the whole class would be punished for the actions of one other classmate? Remember how unfair you felt that to be? trying to tell the teacher ” It was Jimmy who did it not all of us so why cant the rest of us go outside?”

    I rest my case

    • fashionista says:

      @310Drew: I’m glad you’ve rested your case, but you may want to pick it up again. Herein lies the problem: the TOP execs are in said positions because they are supposed to FORESEE and, thus, PREVENT situations such as what AIG faces right now. Your correlation between elementary school children and AIG execs is completely irrelevant. It’s apples to oranges. While I do not disagree with your premise that good performance should equal good pay, the problem is that performance, obviously, hasn’t been so good. If your company faced going belly up, would you support one of your top level execs getting a bonus because “he did a good job?” Keep in mind, while purporting that this person allegedly did a good job, you’re losing yours (the good job, that is).

    • stinerman says:

      @310Drew:

      Granted a good deal of lower-level employees are just cogs in a machine, but that doesn’t say anything about whether or not they should get a bonus.

      A bonus is payment over and above normal salary for a particular job well done or good performance. No one is guaranteed a bonus.

      The way I see it, if it wasn’t for the friendly American taxpayer these people wouldn’t have a job, much less a bonus. They should do without this time around.

      • lecheentucereal says:

        @fashionista: …which is why the top execs shouldnt get bonuses, but not everyone should be punished. well-argued on your part, if unintentionally for the opposing POV.

        @stinerman: true, however the taxpayers’ money has already been handed over, and the best way for us to get it back is for this Company to perform (i.e. not drive away non-top-exec ppl who did well this year and had nothing to do with the tiny segment of AIG’s business concerned with credit default swaps by taking away their bonus to make a point).

      • mushroom104 says:

        @stinerman:

        Yes, exactly, stinerman. This isn’t about punishment. I don’t think anyone hates the average joe bank employee. My own mother works for Citigroup. The employees working for banks and other financial institutions should just be glad they still have jobs. No profit=no bonus. It’s simple. AIG as a whole had to be bailed out, so AIG as a whole should not get bonuses.

        I worked hard this year too. The only difference between me and these bank employees is that the company I work for is not deemed too big to fail. Why should they be given a bonus with my tax money? I may not even have a job next month because of this mess.

        • JustThatGuy3 says:

          @mushroom104:

          I don’t know how much you make, but try taking a 75% cut in your base salary, and then saying that you wouldn’t mind not getting a bonus in a given year.

        • ohenry says:

          @mushroom104: The thing you’re not understanding is that you HAVE to reward these type of employees. These are the ones that are bringing in HUGE profits to the company. If they don’t get these bonuses, they go elsewhere. If they go elsewhere, the company falls further and further into debt, because the revenue that these people were bringing in will go with them. If AIG loses out on their financial (and stable) sectors they will falter worse than they are now. And if they go out of business completely, it’s not just the Execs who will be out of work. Hundreds of Thousands of employees, from high ranking salesmen to your averages joe employees will be without a job.

          It’s all part of the process. It’s what made them the biggest insurance company in America. I think they know how to run it better than we all do. If they can continue to let their profitable parts rake in profit, the company will right itself and AIG will be able to pay the loan back. If they don’t pay these people, they go elsewhere, AIG fails, and never gets to pay back the billions of dollars they borrowed.

          Which outcome do you really want?

          • Philthadelphian says:

            @ohenry:

            “The thing you’re not understanding is that you HAVE to reward these type of employees.”

            No, you don’t.

            This is the biggest flaw with the argument that supports bonuses to those employees at AIG “not responsible” for the failure. Ostensibly, the only reason you would hand out cash at the end of every year to the best employees is to make sure they stick around and don’t seek work elsewhere, right?

            Why are we encouraging productive, gainful employees to stick around at a company like AIG? Wouldn’t their services be utilized better elsewhere?

            I’m not sure where you work, but if my company was falling apart and I couldn’t get another gig, I’d be grateful that I was still getting paid, regardless of how hard I worked that year. I can’t imagine ever crying about not getting a bonus, even if it was part of my “assumed” salary.

            I work in a different industry that’s directly affected by the credit mess, and a part of my pay is tied to my performance. The problem is, it’s getting harder and harder to hit those performance numbers. But at least I still get my base salary. I’ve seen too many people lose their jobs all together to even think about complaining not getting paid as much as I used to a year ago, let alone apologize for the folks that are at least partially responsible for that fact.

            • ohenry says:

              @Philthadelphian: The key thing that you’re assuming here is that these people would be hard up for a job if they decided to quite AIG.

              The people we’re talking about here wouldn’t. They could easily go elsewhere, and make the money that AIG wouldn’t pay them.

              Again, we then just have a big snowball effect. AIG loses the people that make it its money, it loses more and more revenue, other companies that have picked up these big salesmen gain revenue, AIG keeps going down, down, down…then they go under. 165K people look their jobs, they never pay the loan back, and the economy suffers even more.

              See, it’s a relatively small investment to give someone a $50K bonus if they’re bringing in $50M into the company. It’s a thousand times ROI. Not a bad deal, if you ask me.

      • JustThatGuy3 says:

        @stinerman:

        Your characterization of bonus is wrong for the financial services industry. For a large portion of financial services professionals, the bonus is between a large portion and the vast majority of overall compensation. A trader who generated $50MM in profits for his firm might have a base salary of $150k, but get $3MM in bonus. Sure, you don’t HAVE to pay that trader a bonus, but he’ll decamp for another firm immediately.

      • 310Drew says:

        @stinerman: If CNBC and CNN and all the other hyped up media networks would not speculate on a companies well being this never would have happened.

        If you stand somewhere and start yelling fire, soon enough you will have a group of people around you telling you about the fire, the one you really were not sure about, but you saw the fire truck, so you just assumed there was a fire so you sold the sizzle and they brought you the steak. That is how media works, and it is sick.

    • Landru says:

      @310Drew: Heh, heh: “perfectly good company”

  15. Parapraxis says:

    you guys do understand that money given to an employee outside of a normal salary when the company does badly is known as a “malus”

    It’s french in origin:

    bon= good, as in bonus
    mal= bad, as in malus

    The economist is interesting reading…

  16. joeblevins says:

    Agreed with 310Drew. I know we are supposed to hate banks, but in reality, there are parts of that company that are doing well. You must reward the portions of that company that are trying to make up for the failing parts.
    Imagine if half the people in your class failed a test. Should you now have to be held back from promotion even though you scored an A? No… You still need to reward successful people.

    • SadSam says:

      @joeblevins:

      If there are portions of the company that are doing well and turning a profit why does the company as a whole need $150 billion dollars (or whatever the current amount is). Why doesn’t the profitable side of the company bail out the unprofitable side?

  17. chrisjames says:

    Okay, so they’ve promised. Big deal. We’ll see in January whether there’s a breaking news story of AIG execs getting bonuses anyway.

    How does anyone older than 15 get duped by this? I can just see AIG, all doe eyed, saying, “I pwomise I won’t spend moa money. Cwoss my hawt!” and all the fools going, “Awwwwwww, now was that so hard? Go have some ice cream.”

    • ilovemom says:

      @chrisjames: The truth is they probably weren’t supposed to much of a bonus anyway, since bonuses are usually at least partly linked to financial performance of the company. The financial part wouldn’t pay anything, though there might have been individual or corporate goals that might have been achieved and paid out. In fairness, if the goals were met, the bonus should be paid.

      • Anonymous says:

        @ilovemom:
        Goals met???? George Steinbrenner once said to the whole team, “You want more money! Hell no. We haven’t made it to the play offs in three years. I can get that for half the money.” Goals met? Wow. Maybe they should set the goal a bit higher.

    • concordia says:

      @chrisjames: That’s like how Congress was surprised when the banks took the bailout money and, instead of following the ‘spirit’ of the bill they’d passed, hoarded the money or used it to buy up their competition.

      What’s that you say? A *BANK* is following the narrowest interpretation of a rule for maximum profit? Wh..where did that come from? I’m totally perplexed here!

  18. Anonymous says:

    Although many of you dislike Wal-Mart, I work for an Architecture firm and Wal-Mart is one of our clients. While the rest of our office is slowing down, business at Wal-Mart is booming. We’re pulling in people to take up slack on all the overtime we have, and I expect an even bigger bonus check next year then we got this year. I guess fortunately we don’t deal with housing, so we’re not as greatly affected.

  19. shufflemoomin says:

    This is how these big-wigs work. They don’t care about the company or anything about it, they get everything they can as the ship sinks and when it does, they go to a new ship and start again. Suit are what’s wrong with any company anywhere.

  20. Moonshadow101 says:

    I like the idea that they’re developing a way for money to not work the way it works.

    Income minus Expenses. Period. It doesn’t matter if the bonuses are earmarked as not technically being taxpayer money, it’s all the same damn thing.

  21. kryptonn says:

    Why should ANYONE at AIG get a bonus? and if they are going to get a bonus, NONE of that money should be from tax payers. We are coughing up billions so they can stay afloat, not so the employee’s can buy extra gifts this x-mas.

    • 310Drew says:

      @kryptonn:
      when you say ” we are coughing up billions” did you get a bill in the mail for this ?

      I don’t believe I did. Theoretically the taxpayers are paying for it but it’s not like you are going to get a new line item on your paycheck that says AIG Bailout deduction now are you ?

      • Philthadelphian says:

        @310Drew:

        Waaah, waah. I did get a bill. On my paycheck, there’s a high percentage taken out for federal taxes. A portion of that is going toward financing AIG. From your attittude, I have to guess that you’re unemployed and don’t pay taxes?

  22. Jaynor says:

    Bonuses after downturns are tricky. Essentially you’re paying out a portion of your employee’s pay that is at risk based on their previous 12 month’s performance… only the way that these assessments work it’s generally their performance in the 12 months previous to the quarter that it’s paid in (due to timing delays between bonus review and funding/communication to employees).

    What this means is that they’re paying out based on performance from October of 2007 through September of 2008. While this wasn’t a fantastic period for AIG it wasn’t a big disaster until the last quarter of that period. Lots of departments that weren’t underwriting credit default swaps and mortgage-backed securities made PLENTY cash in that time (they do all sorts of insurance, not just big financial stuff).

    If they want to retain those folks they have to pay them for the previous year’s contributions.

    This isn’t wholly obvious to people who’ve never worked with part of their pay at risk. You’re taking the job based on the fact that you are able to increase your income through bonus payouts at the end of the year (based on your performance). These aren’t just big presents the company gives you to make everyone feel good about themselves while sailing around on yachts and thumbing their noses at the little guy.

    • TechnoDestructo says:

      @Jaynor:

      Translation: For a company to survive in an industry whose practices encourage corruption, they must adopt practices which encourage corruption.

  23. Marshfield says:

    “We’ll be working the accounts overtime to figure out how to cook the books so the bonus money comes out of another pot besides the bailout money. It’ll be tricky but we are sure we can pull it off.”

  24. Norcross says:

    Depending on who the executives are, I don’t really see a problem with this. It was one main part of AIG (mainly, the CDS area) that fucked the company more than anything. The people selling life insurance didn’t cause the problem.

    Not to mention, many bonus structures are built it the employment contract. Depending on the situation, they may have to pay them.

  25. 310Drew says:

    If you do not treat the people fairly in the departments that are doing a good job, all you will have left is the part of the company that is bringing everyone done, and then no matter how much money you throw at them it will be a waste.

    You have to support the good to keep the bad from taking over.

  26. ironchef says:

    We’re adding a little something to this month’s sales contest.
    As you all know, first prize is a Cadillac Eldorado.

    Anybody want to see second prize?
    Second prize is a set of steak knives.

    Third prize is you’re fired.

  27. failurate says:

    Simple solution, change the word “Bonus” to the term “Profit Sharing” and wa la, no body gets a bonus and nobody can complain.

  28. Mikestan says:

    Somebody call the whambulance!