Andrew Ross Sorkin Plays the Contrarian on AIG Bonuses

AIG bonuses

Love or hate AIG the important thing is to get the economy going. Let's move forward

ray of NY @ Mar 19, 2009 23:05:31 PM

Tough Times

I guess it must be somewhat comforting to AIG that they have a friend or two out there.

findM of NY @ Mar 18, 2009 19:00:35 PM

Weak Anaysis of Merrill

Re "The differences here, it would seem: AIG's ability to pay its bonuses comes solely from its taxpayer-funded bailout, while Merrill Lynch paid out bonuses before the BofA takeover."

Well, Merrill received quite a bit from the Feds via the AIG conduit prior to being taken over. And since money is fungible, I am not sure why it matters that Merrill paid their bonuses before being acquired - they lost money in 2008, so they were not paying out of profits; instead, they were making the payments early in anticipation of being acquired and losing control of the bonus pool.

Bonus point overlooked by Sorkin - in March of 2008 AIG eased out Joe Cassano, who had led the charge into credit derivatives. Many of the stay-behinds had nothing to do with credit swaps (AIGFP had many profitable other activities). AIG management wanted to keep them on as part of the solution, figuring the group would return to profitabiltu sans credit derivatives.

Obviously, things took an unexpected turn. But these people were induced to stay on as part of the solution, not because they had caused the problem. So why are they all villains now?

last question - could we get an even smaller font on the preview screens here? I can still read this with a magnifying glass, which I am sure is unsporting of me and is defeating the purpose.

Tom Maguire of CT @ Mar 17, 2009 22:02:18 PM

Andrew Ross Sorkin's AIG Bonus Article

I thought the purpose of the bailout money was to help in turning around the economy. Instead the pigs at AIG basically said screw America and took the money for themselves. That's theft, plain and simple. All I hear is "contracts." Somebody tell me what does the bailout money have to do with salaries and bonuses at these mismanaged companies. The money wasn't given to them to pay employee salaries. If the economy is a wreck and a company is failing, who in their right mind would think paying ridiculous, unearned bonuses will save that company. The government gave them the money to make the company healthy again. Who cares about their unfulfilled contracts. If those sorry individuals want their promised contracted bonuses, let them sue the company they drove into the ground. I guess the better answer is they should sue themselves. They should not be allowed to get away with this/

They had a contract with AIG not the government and certainly not the taxpayers who continue to be burden. Americans don't deserve this and it appears no one is stepping up to the plate on our behalf. I voted for Obama and believed he could get this country back on the right track. However, after this total mockery by AIG, if he gives them another 30 billion dollars it will be a great disappointment.

Delise of IN @ Mar 17, 2009 20:42:20 PM

ARS.E

Sorkin needs to be decapitated.

Phil of TN @ Mar 17, 2009 20:32:00 PM

which principle to follow

Many of these people wrote "contracts" that were little more than insurance fraud. These contracts were then paid with taxpayer money. What about the unspoken social contract. Do I need a contract to breathe air, or congress to make defecation legal or illegal. This is ridiculous. These "exectutive officers" are criminals. They are not talented desireable employees. Nobody is speaking english... Toxic assets are people whose lives are ruined. Credit Default Swaps are quasi legal insurance fraud. Where were the Real Estate agents and brokers who are equally complicit. The incentives in real estate are all wrong. Why should agents split 6% of the purchase price. ALL the incentives of mortgage and real estate served to create a bubble. These officers are not talented. They should be banned from banking and insurance, be stripped of their wealth and thrown out on the street with the rest of us.

James of CA @ Mar 17, 2009 15:11:42 PM

Andrew Ross Sorkin's AIG Bonus article

Having just read Andrew Ross Sorkin's article I only have one comment. If you have to add a bonus to the contract in order to get the best and the brightest how come the best and the brightest haven't kept AIG out of the mess they are in?

Jacqueline A Simpson of MD @ Mar 17, 2009 14:32:55 PM