• AIG Bonuses - Don't eliminate the Trust Factor!

    I must admit that I think giving bonues to execs who've lost $68 billion is completely wrong. But as mentioned on the news, it's in their contract.

    The federal goverment should have known about these bonuses prior to purchasing 80% of the company. They should have been away of the income statement and balance sheet prior to purchasing the company.

    Where I think it's completely ridiculous to give these execs $165 billion in bonuses, I think it's worse for government to step in and renege on their contracts.

    I would be furious if a government of any type stepped in and started dictating what I can and cannot do with contracts in my business.

    IMO.... the government shouldn't be getting involved in private business. That's eroded alot of confidence in the market place. Having government involved in private business means that business can't operate on it's own and needs life support.

    Having government interfere with private enterprise contracts is the next step to BIG BROTHER and socialism.

    It will erode trust even further with businesses. Businesses will be concerned if they should do something lest the government jump in and act.

    I know that this is an extreme example, but when contracts are legally binding, they should be allowed to carry out, in a lawful fashion.

    According to:
    http://news.hereisthecity.com/news/business_news/8869.cntns


    (AIG) Staff Get 'Death Threats' Over Bonuses
    The furore over the $165m in bonuses AIG is contractually obliged to pay staff at its Financial Products Group (the unit that basically brought down the firm) reached fever pitch over the last couple of days.

    The Times reports that armed guards have now been placed outside the Connecticut offices of AIG Financial Products, after staff there received death threats over the bonus payouts. Several staff are said to have refused to come to work, and others are thought to have quit. And we even had US Senator Chuck Grassley telling a radio audience earlier in the week that AIG executives should 'resign or go commit suicide' (he later clarified that remark, saying he didn't really mean that they should actually kill themselves, instead suggesting that they say 'sorry').

    In the meantime, House Speaker Nancy Pelosi hopes to enact legislation in the coming days in order to slap a heavy additional tax charge on the AIG bonuses (will effectively cancel them out), and Representative Barney Frank has suggested that the US government simply step in and assert its ownership of AIG. Frank told a group of reporters Tuesday that the government needs to say, as owner of the firm: 'No, I'm not paying you the bonus. You didn't perform. You didn't live up to this contract'. And Treasury Secretary, 'dim' Tim (Geithner), has said that he is looking into the matter (he may - like all his other schemes - have a plan for a plan, with more details sometime never).

    How is anybody supposed to get any work done in this trustless environment. Who would want to work in the company after all of this headline news?

    I think for next time, the AIG Bonus contracts should be reconsidered. However, at this time, pay the bonuses and keep to your agreements. Agreements and fulfilling agreements are the glue of the North American economy.


 
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5 Comments
On Mar 23, 2009, mark goldberg Said:
we're living in an economy that we can't afford collectively. there's not enough savings, obviously because everyone's borrowing money to pay for bailouts, and mortgages

the fundamental premise is: if you can't afford something, don't buy it.
if you can't afford upkeep and maintenance, don't buy it, PERIOD

it seems that we're having to borrow to upkeep and maintain our economy
On Mar 21, 2009, mickey Said:
Let us not forget the government's piece in all this mess. Whenever there is a fiasco, there is probably bad legislation behind it, or unenforced regulation etc.
I agree, these are contracts that the government certainly knew about, yet they are denying it.
Another issue of greater concern, they are now trying to tax the money out of their pockets, we Americans should be frightened of this. If they can do it to them, you won't be far behind if they disagree with you. It is likely unconstitutional too.
On Mar 20, 2009, June Said:
Ludirous ! rewarding the same people who drive the company into the doldrums. What's more with decent tax payers money .
Bonus, unlike wages shud only be paid out when company turned in profit n not to inept and irreponsible fellas. Shame on them !
On Mar 18, 2009, Monty Loree Said:
Agreed...
I'm sure it will all work out in the end...
the whole economy thing is going to cost everybody alot of money.

the best thing to do is get through it and get back into business.
On Mar 18, 2009, b metcalf Said:
i don\'t think aig should give out those bonuses.. especially if the government owns the company. they should be taxed or something. it\'s just not right
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