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

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.

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.

@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.

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

@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.

@blackmage439: PFFFT! $500,000 house? That's where their gardeners live.

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

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".

"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.

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

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:

@ilovemom: touche, sir.

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).

Breaks my heart!

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!

@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.

@ADismalScience: Why call them bonuses, then?

@ PittsburghJen

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

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..."

@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.

@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

@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.

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

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...

@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: 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.

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.

@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.

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."

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.

@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?

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.

@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?

@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.

@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.

@blackmage439: After what they did, their house that used to be a 500k house is now worth 400k

@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.

@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).

@Blueskylaw:

You can never discount the cryptographer. The entire letter could actually be a code for something else entirely if decrypted properly with a one-time pad key.

@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.

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

@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).

@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.

@310Drew: Heh, heh: "perfectly good company"

@LogicalOne: or baling out foreign banks, cough Bank of frickin China cough.

@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.

@blackmage439: Ha! By West Coast standards, that's a house in Compton!

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