I'm outraged that they're so outraged.

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...and the well has runneth dry. way to Hopeychangy go, you morons

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Originally posted by Q5echo ...and the well has runneth dry. way to Hopeychangy go, you morons

Apparently Obama is to blame for AIG's executive compensation...

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Originally posted by Krypton Apparently Obama is to blame for AIG's executive compensation...

well, he and Gietner could have renegotiated terms on more bailout but i don't think people realistically expected that however thats not my point.

here. ill let someone else explain.

He said many different things. What exactly is your point?

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Sorkin makes a couple of interesting points. Almost makes the bonuses seem like hush-money.

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March 17, 2009 Dealbook The Case for Paying Out Bonuses at A.I.G. By ANDREW ROSS SORKIN Do we really have to foot the bill for those bonuses at the American International Group? It sure does sting. A staggering $165 million — for employees of a company that nearly took down the financial system. And heck, we, the taxpayers, own nearly 80 percent of A.I.G. It doesn’t seem fair. So here is a sobering thought: Maybe we have to swallow hard and pay up, partly for our own good. I can hear the howls already, so let me explain. Everyone from President Obama down seems outraged by this. The president suggested on Monday that we just tear up those bonus contracts. He told the Treasury secretary, Timothy F. Geithner, to use every legal means to recoup taxpayers’ money. Hard to argue there. “This isn’t just a matter of dollars and cents,” he said. “It’s about our fundamental values.” On that last issue, lawyers, Wall Street types and compensation consultants agree with the president. But from their point of view, the “fundamental value” in question here is the sanctity of contracts. That may strike many people as a bit of convenient legalese, but maybe there is something to it. If you think this economy is a mess now, imagine what it would look like if the business community started to worry that the government would start abrogating contracts left and right. As much as we might want to void those A.I.G. pay contracts, Pearl Meyer, a compensation consultant at Steven Hall & Partners, says it would put American business on a worse slippery slope than it already is. Business agreements of other companies that have taken taxpayer money might fall into question. Even companies that have not turned to Washington might seize the opportunity to break inconvenient contracts. If government officials were to break the contracts, they would be “breaking a bond,” Ms. Meyer says. “They are raising a whole new question about the trust and commitment organizations have to their employees.” (The auto industry unions are facing a similar issue — but the big difference is that there is a negotiation; no one is unilaterally tearing up contracts.) But what about the commitment to taxpayers? Here is the second, perhaps more sobering thought: A.I.G. built this bomb, and it may be the only outfit that really knows how to defuse it. A.I.G. employees concocted complex derivatives that then wormed their way through the global financial system. If they leave — the buzz on Wall Street is that some have, and more are ready to — they might simply turn around and trade against A.I.G.’s book. Why not? They know how bad it is. They built it. So as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company. In the end, we may actually be better off if they can figure out how to unwind these tricky investments. Not that any of this takes the bite out of paying these bonuses. For better or worse — in this case, worse — someone at A.I.G. decided this company needed to sign bonus agreements last year to keep people before the full extent of its problems became clear. Now we can debate why A.I.G. felt it necessary to guarantee seven executives at least $3 million apiece when the economy was clearly on shaky ground. Perhaps we will find out these contracts were a bit of sleight of hand to enrich executives who knew this financial Titanic had hit the iceberg. But another possible explanation is that A.I.G. knew it needed to keep its people. That is the explanation offered by Edward M. Liddy, who was installed as A.I.G.’s chief executive when the government effectively nationalized the company last fall. (He is being paid $1 a year.) “We cannot attract and retain the best and brightest talent to lead and staff” the company “if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,” he said. There’s some truth to what Mr. Liddy is saying. Would you want to work at A.I.G.? Sure, maybe for $3 million. But not if you could go somewhere else for even more — or even much less. “The jobs are terrible,” said Robert M. Sedgwick, an executive compensation lawyer at Morrison Cohen who represents a number of employees of banks that have taken government money. “You have to read about yourself in the paper every day. These people are leaving as soon as they can.” Let them leave, you say. Where would they go, given the troubles in the financial industry? But the fact is, the real moneymakers in finance always have a place to go. You can bet that someone would scoop up the talent from A.I.G. and, quite possibly, put it to work — against taxpayers’ interests. “The word on the street is that A.I.G. employees are being heavily recruited,” Ms. Meyer says. Of course, if taxpayers had not bailed out A.I.G., these contracts would not be worth anything. Andrew M. Cuomo, the attorney general of New York, made the point on Monday, when he subpoenaed A.I.G. for the names of the people who received the bonuses. If A.I.G. had spiraled into bankruptcy, its employees would have had to get in line with other unsecured creditors. Mr. Cuomo wants to know who A.I.G.’s lucky employees are, and how they have been doing at their jobs. So here is a suggestion for him. Get the list, and give those big earners at A.I.G. a not-so-subtle nudge: Perhaps they will “volunteer” to give some of their bonuses back or watch their names hit the newspapers. But in the meantime, despite how offensive and painful it might be, let’s honor the contracts.

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Originally posted by Groundhog Boy How are they going to tax them if the bonuses were earned in London? Shouldn't the UK be taxing them?

if the traders were in the US for a specific period, they would be subject to US tax (about 183 days). Also, if the traders were in the US at all, the income earned in the US on those days could be taxed. The more likely approach would be to tax AIG on the payments by not allowing deductions. But that really wouldn't work since AIG has about 100 billion in net operating loss carryovers. I think that proposal is coming from a senator who doesn't really know that much about taxes (i didn't read the article so I don't know who made the proposal).


Just throwing out an idea: Maybe the government could impose a transfer tax on funds leaving the US (i see problems with crafting this sort of tax, but perhaps it's possible). If the contracts are with a subsidiary of AIG (and not guaranteed by the parent), perhaps the government could simply block the transfer to the sub (leaving the traders with a claim against the sub).

I see the most likely scenarios as (i) the government does nothing, or (ii) the government withholds under the pretense of an interpretation of some US law, which forces the british traders to negotiate lower bonus payments or come to court in the US.

Last edited by jerZ07002 on Mar-17-2009 at 13:01

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Originally posted by Lebezniatnikov I'm outraged that they're so outraged.

They are not outraged, Obama's Political capital gets eroded if he cant stop this bonus payment, he sees it like AIG CEO is showing him middle finger and wants to potrayit to world like that, but the fact remains that AIG is bound by contractual agreement to disperse the bonus to performing employees. Unless they amend the contract and re-write it again there is nothing that the CEO can do. Obama/media is making a scapegoat out of CEO.

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Originally posted by jerZ07002 if the traders were in the US for a specific period, they would be subject to US tax (about 183 days). Also, if the traders were in the US at all, the income earned in the US on those days could be taxed. The more likely approach would be to tax AIG on the payments by not allowing deductions. But that really wouldn't work since AIG has about 100 billion in net operating loss carryovers.

And if we taxed AIG, we'd just be taxing ourselves.

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"Go back to bed america your government is in control
Here's American Gladiators, here is 56 channels of it,
Watch these picturary retards bang their fuckin' skulls together and congratulate you on living in the land of freedom,
Here you go America you are free to do as we tell you
We want your soul
Your cash, your house, your phone, your cash, your house, your life" -Adam Freeland - We Want Your Soul

GOP Senator Grassley On AIG Execs: "Resign, or go commit suicide."

So tactful.

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Originally posted by Lebezniatnikov GOP Senator Grassley On AIG Execs: "Resign, or go commit suicide." So tactful.

Really?

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