Insurance companies losing billions of dollars - I cant comprehend that. They get insurance money for doing NOTHING (car insurance, for example), I always thought insurance companies would be very successful.
Can someone please explain an economic bum like me what the is that about? Apart from this bull nonsense of bonuses - I recall bonuses are for achievements and success and meeting goals and such - I dont see what sort of success these bonuses should be paid out for. :D
The17sss
quote:
While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law.
Also, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to opensecrets.org.
This is not news to them. They knew about this a year ago, they knew the amounts, and as the payout date is coming close, they spring up and act like they've been caught off guard by the evil corporation. They are faking outrage to ride a wave of popolist sentiment and portray themselves as saviors out to help "the little guy". How much money are we paying for people not to work and for people's mortgages who can't pay them? Billions and billions. Not to say $165 million isn't a lot, but to create a circus over that amount is nonsense. These are corrupt people who have their interests at heart, not ours. When oh when will people realize this? ing Dodd himself put a provision into the stimulus bill prohibiting bonuses from having restrictions for god's sake!!!!!!!
quote:
Here is the loophole, from the section of the stimulus package that deals with compensation rules for TARP recipients: The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.
Frankly, it’s hard to imagine how the government could prevent such contracts from being honored. But the presence of this loophole, in black and white, certainly gives the lie to all of this phony outrage — by the senator who created the loophole, by the president who signed it into law, and by everyone else who voted for the stimulus package.
This is a mess... this government is spiriling out of control. Is this what you voted for? Is this government efficiency? This is what happens when an administration has a bunch of brainiacs who learned Ivy League liberal ideology, and believe they know how to run better than actual executives with real world experience running businesses.
American International Group Inc. said Friday that it will give the government control of 80% of the company without seeking shareholder approval, saying the board's audit committee determined that the "delay" needed to get the approval "would seriously jeopardize the financial viability" of the company.
AIG also said in a filing with the Securities & Exchange Commission that it is paying about 130 executives cash awards as part of a retention program for the giant insurer, which got the right to borrow up to $85 billion from the government last week in a deal to avert possible bankruptcy. AIG said ...
Published: November 26 2008 23:41 | Last updated: November 26 2008 23:41
One day after announcing strict limits on salaries and bonuses for its top tier of executives, AIG revealed that some of those executives will receive millions in “retention bonuses” next year.
In a regulatory filing on Wednesday, the insurance group disclosed that Jay Wintrob, an executive vice-president, had put off receiving the first instalment of his $3m retention bonus from December to April 2009.
He will receive the second instalment, originally scheduled to be paid out in December 2009, in April 2010. David Herzog, AIG’s chief financial officer, also opted for the later payment schedule.
The retention bonuses for 130 key executives were disclosed by AIG in September, after the US government rescued the firm from bankruptcy by purchasing 79.9 per cent of the company for $85bn. After the government takeover, Edward Liddy, the former Allstate chairman, was named chief executive and AIG offered retention bonuses to Mr Wintrob, head of AIG’s retirement services division, among others.
In October, AIG’s management was embarrassed by the disclosure that the company spent $440,000 on a weekend retreat in California for senior performers.
The company announced on Tuesday that Mr Liddy would be paid a salary of $1 for 2008 and 2009, and that Paula Rosput Reynolds, who joined AIG as chief restructuring officer in October, would receive no salary or bonus for 2008.
The company said the other five members of AIG’s seven-member leadership group would not receive annual bonuses for 2008 or salary increases through 2009.
AIG also said that the company’s senior partners, about 60 executives, would not earn long-term performance awards in 2008, not earn salary increases in 2009, and that the group’s annual bonuses would be limited.
An AIG spokesman said on Wednesday that retention bonuses were different from the annual bonuses included in Tuesday’s statement. In September, Mr Liddy pledged to sell off significant portions of AIG’s international operations in order to pay back the government loan. The company said at the time that retention bonuses would be necessary to maintain continuity and value at various AIG units.
“Retention bonuses are a better alternative for the repricing of option awards so long as they are reasonable, fully disclosed and truly needed to retain talent,” said Richard Ferlauto, director of corporate governance and pension investment at the American Federation of State, County and Municipal Employees union.
“But in this market we don’t see much clamour for executives who made big bets, cannot make risk and were paid more than they are worth,” he added.
Copyright The Financial Times Limited 2009
Also, I swear I read back in the fall that these "retention bonuses" didn't guarantee that these people would stay. As in specifically stated that point. They were aware that some of them would leave.
I mean, would you want to admit that you work for AIG anymore? You're like public enemy #1 even if you've done your job well just because of who you work for. Or better yet, if you didn't even work there when the problems were created but are just helping clean up the wreckage.
pkcRAISTLIN
quote:
Originally posted by Magnetonium
Insurance companies losing billions of dollars - I cant comprehend that. They get insurance money for doing NOTHING (car insurance, for example), I always thought insurance companies would be very successful.
Can someone please explain an economic bum like me what the is that about? Apart from this bull nonsense of bonuses - I recall bonuses are for achievements and success and meeting goals and such - I dont see what sort of success these bonuses should be paid out for. :D
AIG were in trouble because they had insured the 101 banks against the banks going under. when all the banks started to collapse people at AIG realised they too would be brought down. if AIG collapsed, this would have precipitated even more banking collapses, because those banks couldn't access the funds they were insured for at AIG.
here is a great doco on how everything went down (so to speak!)
the blame is on the administration, both of them. in incredible.
MisterOpus1
Since 17 seemingly can only post thoughts from blogs, I guess it's only appropriate to have an answer from one too:
quote:
The latest rumor revolves around a news story about VA Secretary Eric Shinseki "considering" a proposal to allow the VA to bill insurance companies for care received by service-connected disabled veterans. That story here...
The problem is that the story "has been misinterpreted and blown all out of proportion."
As we know, the VA now bills insurance carriers for non-service-connected care if the veteran has insurance. If they don't, VA covers the care. And, currently, VA does not bill private carriers for service-connected care. (NOTE: Please don't write and tell me VA is billing your insurance company for service-connected care. We know that these mistakes can happen if procedures are coded incorrectly. These errors can be corrected by working with your local VA Billing Office.)
So, now we have some pseudo-journalist who just read the first part of the above article and picked out the phrase "make veterans pay" and didn't read the rest of the article for a full explanation of VA's insurance billing policy.
This person then went on to castigate Sec. Shinseki for even "considering" such a proposal. But, there's a problem with that. It's Shinseki's job to "consider" what is put on his desk. That's what they pay him to do. This proposal came from the Office of Management and Budget and is one of many proposals being "considered."
And, it is unfair to criticize Shinseki for doing his job when we don't even know what his response to the proposal might be. Remember, it's under "consideration" and we'll hear from him if he makes a statement or when the 2010 VA budget is drafted. If we don't like his stance on the proposal, we can scream then, but have no right to at this time. It should also be noted that this would never pass Congress.
This whole rumor thing gets worse. Leave it to some blogger to rant this into the ground by completely missing the concept and claiming that the government is going to force veterans to buy insurance to pay for their VA healthcare. Not so. Completely false. Bogus. You get the idea.
It is really frustrating to see people put out false information... information that only confuses and scares veterans.
It is really frustrating to see people put out false information... information that only confuses and scares veterans.
Now, this nonsense has been put into email form and is going viral... so, if you haven't seen it yet, you will.
Ignore it for what it is... trash.
To remember: This is not Shinseki's idea. And, this comes from (according to a highly-placed official at a vets' service org) a bunch of 30-something budget wonks who have their heads stuck in their calculators and know little of the real world... but, they'll find out .
And according to these trusted blogger sources :D, word is this was actually a Republican proposal passed down to Shinseki. Gosh I love those internets!
Regardless, I'd be very surprised if Obama passed this on in any way, shape, or form. Considering we just came from an Administration that brought us this:
Not only do I think the ing Republican hypocrisy is sick and shameful, but I really do hope we can continue to do better with treating our Vets.
The17sss
quote:
Originally posted by MisterOpus1
And according to these trusted blogger sources :D, word is this was actually a Republican proposal passed down to Shinseki. Gosh I love those internets!
Regardless, I'd be very surprised if Obama passed this on in any way, shape, or form. Considering we just came from an Administration that brought us this:
Not only do I think the ing Republican hypocrisy is sick and shameful, but I really do hope we can continue to do better with treating our Vets.
Haha... until that "word" becomes fact that it was a Republican proposal, don't spread the rumor. Shinseki is an Obama nomination; try your best to control your disdain for "republican hypocricy" with that in mind. And of course it won't pass, but the point is that, why would Obama even consider such a proposal? THAT is what's shameful.
Originally posted by Q5echo
Chris Dodd should be behind bars.
... and not just for the sweetheart deal he got on his own house with Countrywide Mortgage. Dodd is personally responsible for the measure in the bill that allowed no limits on CEO bonuses for AIG... and now they want to pretend they didn't know about it and take them away. How the do these people get and stay elected?
But don't take my word for it... Shepard Smith unloads with some facts today:
BARS-N-STARS
quote:
Originally posted by Q5echo
Chris Dodd should be behind bars.
I wish I had job security like that loser.
The17sss
Chris Dodd: Ok, yes I was responisble for the AIG loophole but the Treasury asked me to do it. :rolleyes:
