Monday, March 16, 2009

AIG March 2009 bonuses to AIGFP unit

AIG: Another potential infusion of thirty billion (within next five years) to a company that has absolutely no regard for the people holding the safety net.

It is absolute nonsense to say that AIG had to honor May 2008 contracts with certain AIGFP employees that apparently guaranteed them bonuses. This is the very unit that was instrumental in the $99 billion 2008 loss.

Okay, so these bonuses are "retention" not performance bonuses. According to Mr. Liddy, gov. appointed CEO, these were for the task of closing the "books" on the business of AIGFP. 74 individuals received greater than $1 million in bonuses, 11 of whom have left. He says they completed the task they were assigned and therefore got the contracted bonus. He also says that it was the Credit Default Swap section of AIGFP that brought the company to its knees. Get this: it was a total of 20 to 25 people responsible for the huge loss! (they cost AIG a $15 Billion loss.) There are other units in AIGFP, such as Derivatives, that were not at fault. (AIGFP had 435 employees, now 360.) He maintains that the $165 million in bonus money is for the Derivative folk. (Another $200 Million in retention bonus is due these folks in 2010. Liddy does not anticipate this will be given out as he expects these people will have left by then.

Please! If the government had not loaned / bailed out AIG in 2008 and now 2009, these people would not have a job. Forget a bonus. It is ridiculous to say a contract must be honored when the company that issued the contract would no longer exist if not for a bailout.

They are lucky to have a job (at probably tidy salaries.)

AIG says these employees are needed to undo the mess they made. Well then, we are all in serious trouble because how can Congress modernize regulations for something they do not understand? Liddy says that the potential loss if these people leave and AIGFP fails is $1.6 TRILLION.

AIG needs to rescind those bonuses if the public is to have any faith in how the US Congress and Senate are overseeing this situation.

It's tough not to get sick over the continuing "in your face" antics of these bailed out companies. And, the government that is kowtowing to them.

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