Remember How Mad You Were About Those AIG Bonuses? They're Bigger Than You Thought
So, remember those bonuses everyone was so mad about? Well, it turns out that they were bigger than originally disclosed. A lot bigger.
Responding to detailed questions from Rep. Elijah Cummings, AIG disclosed a new figure for its employee bonus pool — $454 million for 2008.
"I was shocked to see that the number has nearly quadrupled this time," said Cummings. "I simply cannot fathom why this company continues to erode the trust of the public and the U.S. Congress, rather than being forthcoming about these issues from the start."
POLITICO says that the last time they asked AIG about the total bonuses (which are different from and in addition to retention payments), they were given a figure of $120 million.
On March 19th, POLITICO asked AIG in an e-mail, "What was AIG's total bonus pool (outside the retention agreements) for 2008?" To that, after some back and forth, AIG offered the $120 million figure.
Later in March, Congressman Cummings submitted written questions to AIG, asking: "Please specify the exact amount in bonuses - not retention payments or any other form of compensation - paid by AIG to employees of any division of AIG in 2008 or paid in 2009 for work performed in 2008."
To that question, AIG disclosed a division by division breakdown of payments totaling $454 million.
AIG spokesman Ashooh said the company's revised accounting is the result of different wording of the questions asked by Cummings and POLITICO.
Just in time for the next round of Worst Company in America.
AIG bonus pool higher than reported [Politico via Gothamist]
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Comments:
Time to pull the plug.
Either AIG flat out lied the first time, or they are giving away money that they don't have, because the first question was far more open-ended than the second.
I'm having violent thoughts toward an acronym.
Sounds like the company should die, clawback the bonuses and all the money filtered through to places like Goldman Saks, and jail the perps.
Won't happen but I can dream.
I should not be shocked that the "ever honest" AIG lied about the bonuses, but I am. I literally gasped at that number.
@laserjobs: The investigations into this mess have only just begun. It'll go on for years. I expect meaty jailtime for fraud once prosecutors get their cases in order.
Peanuts, popcorn, anyone?
mid-March: they say $9M
Late March: they say $120M
Early May: they say $454M
"What is a Billion by July, Alex?"
"Or any other form of compensation" seems different from bonuses and likely to increase the total figure.
To me, any other form of compensation includes salary, health benefits, etc.
I'll play the role of the defender of liberty here, and point out that it was one division that brought AIG down. If I was working in an unaffiliated division (let's say I sell life insurance fir AIG), you'd probably need to give a a bonus to stay on the AIG Titanic. Since I wasn't the one that fucked up (who knows, I might have even done a good job selling life insurance), I'd deserve that bonus.
@Michael Belisle: While this is true and complete common sense, this will not prevent the pitchfork mafia from generating more OUTRAGEOUS OUTRAGE!!
People made money! Bonuses even! BURN THEM!!! BURN THEM ALL!!!!
@Michael Belisle: I agree with you, as long as any bonus money paid to you came from the company's pre-bailout coffers. Giving bonuses with taxpayer money? Hell no.
Note to self - discount commentary on financial regulation from people who don't know how to spell Goldman Sachs.
It's kind of like taking advice on computer programming from somebody who talks about Gougle and Microsopht.
And if AIG doesn't win your Final Four Hands Down, your contest is meaningless!
Several years ago, I bought a big chunk of 'distressed' debt in a major company and landed on the creditors committee when it filed for Chapter 11. Shortly thereafter, the bankers who were hired by senior management told me that I would have to pay retention bonuses to keep its top managers from leaving.
The company, they warned, would crumble if these star managers left. Nine had already threatened to march out the door if they didn't get substantial bonuses. I told them I was fed up with retention bonuses. Where was the line waiting to hire these "star" managers who were responsible for bankrupting the company in the first place?
So I flatly refused. After much argument, the company's lawyers and bankers said, let's take it to the bankruptcy judge.
The judge said, "Mr. Icahn, why don't you want to pay retention bonuses?"
"It's simple, your honor," I replied. "It's because I don't want to retain them!"
"Hmm, good point," the judge said. "You win."
ENOUGH with this meaningless outrage. The country voted in a new round of executives to the White House and the Senate, who on our behalf have chosen to bail out these companies. The bonus payments are part of the debts that AIG owes, and as such are a reason that it needs bailing out.
Either write your congressman/senator and express your disapproval of bailing out AIG as an exercise, or sit back and take comfort that your elected officials are doing what is best. Don't vote into office people who said they would give bailout money, then get angry when they do it!
@NeverLetMeDown:
+1. I laughed when I read that. Of course, with the media reporting all the financial market drama, everyone becomes a finance expert and has something to say about it.
@Shaggy: I hate to break it to you, but the bailout (for better or worse) was given to AIG so they had the money they needed to keep operating. Last time I checked, paying bonuses to productive employees is part of the cost of operating a successful business.
@BigFoot_Pete: In case you weren't born yet... the LAST President started the bailout.... this one is simply continuing it...
@Michael Belisle: I guess then that none of the union autoworkers should have to give concessions either.... it was executives that were at fault, so the workers shouldn't have to suffer for it...
When a company hurts... ALL employees feel the pinch. If they don't like it, they are free to seek alternate employment... right?
@rellog321: And there are those of us who voted for neither one of them because of just such behavior... although it's more of a senate issue at this point.
I love the breakdown from the article. It lists the "average" for employees... I think we all know Betty from the secretary pool isn't getting $5k in bonuses... They need a break down of who got what. The government needs to take off the gloves and start inditing people...
@rellog321: No, Betty from the secretarial pool is getting laid off. How do I know this? Because my 62-year-old mother is one of those secretaries. She was notified last week.
And you think you're pissed at AIG....
I might have bought that concept before my company and the businesses that many other people I know work for cut all bonuses and pay increases this year because of economic hardship. I'm just glad that my taxes are making sure that even though I don't get a raise or bonus people at AIG will. Frankly, they should be glad that they still have their jobs. That's what the rest of us keep being told.
/bitterness
This was the main headline on Drudge moments ago and now has been removed from his page completely.
@SadSam: Yeah, the total is supposed to -not- include that. So, salary and health benefits shouldn't increase the figure.
I wasn't mad about the bonuses. They were a contractual obligation between AIG and the executives. What I was mad about was the bailout money, the mock outrage over the bonuses, and the lying duplicitous members of Congress, and our socialist president demanding that the money be paid back. Has this whole country become stupid? Why must you all fall hook line and sinker for this petty class warfare B.S.? Can't you see that you're being controlled? Idiots!
First off, it's spelled indict. Second, AIG did nothing that was against the law. Do you really want the government determining what people should be paid? They will eventually make it down to you. This is class warfare manipulation at work.
The government needs to take off the gloves and start inditing people...
On what basis? Offending your sensibilities? Do some research on the topic.
@kreatre2009: Revealed just in time to focus attention away from the stress test results. Politicians can express outrage about AIG, announce new congressional investigations, and the beat goes on.
@kreatre2009: Im adding you to my faves. Anyone who can see through Obamas "A Change We Can Believe In" B.S. is a friend of mine! I wish people would wake up, and realize that just because they see stuff on the news and media DOES NOT mean its the God-honest truth! Lemmings! Sheep being led to the slaughter!!!
@Razorgirl: Financial jobs are a different animal. If you're making money for the company, the alternative is that revenue stream is eliminated. For instance, say you're a highly successful energy trader. Last year you made $500 million for the company. The company gives you $100 of that and nets $400. The alternative if you jump ship? Company nets $0. This isn't a pie in the sky scenario, its actually happening now at Citi...
WOW. AIG FTW.
@kreatre2009:
I certainly agree re: the "fake" outrage. I really am tired of the "you make more money than me, it's just not fair" and "no person is worth $xx per year" bullshit. Congress loaned AIG money with no strings, that sucks. But that's Congress' fault, not the AIG employees who were expecting bonuses. The general public has no right to be mad at AIG. They do have every right to be mad at their representatives. The only people who have a right to be mad at AIG are the public shareholders. The "Taxpayers" are not AIG shareholders. The Federal Government is. The "taxpayers" don't get a say (at least not directly). If the Government doesn't like what AIG is doing, they should exercise their powers of shareholder democracy and remove the Board members. Stirring the public into a class-warfare mob isn't the right way to go about it.
@SadSam: When you make $10M+ a year, what the hell do you need health insurance for? You should have no problem simply paying cash for any medical/dental/vision expenses.
damn I wish I had me one of them bonuses.
At any rate, time for AIG to get a nice letter stating their funds are cut. DISSOVLED!
"Mortimer, do you know what this means? WE'RE BANKRUPT!"
You know.. I am not a violent person.. but for this company I'll make an exception.
What happened to letting companies fail that f*** up? I don't see any small businesses in my area getting federal funds to keep them open.
@Coach Cal Is My Dream Weaver:
On the basis that it's just unfair that some people are rich and some people aren't; isn't it obvious? I mean, if I didn't get a bonus this year, I'll be damned if someone else gets one. And if someone else did get a bonus, god damnit, I deserve to know who they are and how much they got. Now where is my pitchfork?
There is a huge moral hazard here. All of the folks that ended up with bonuses will continue their incredibly risky behavior. In the future they will again gamble the entire company and expect the tax payers to run in with bailout money.
@Esquire99: I AM angry at AIG, and I do have a right to be, just as I'm mad at every welfare recipient who thinks because they have some cash in hand they are entitled to go buy a new HDTV. AIG is no different than any other able-bodied welfare recipient who prefers to milk the system rather than be an upstanding productive member of society. AIG needs to go away.
And yes, I'm mad at the members of Congress who shoved this down our throats. I'm grateful that my Congressional representatives have all consistently voted no to the bailouts--for what that's worth.
That's just game playing. They should be allowed to fail.