Dear A.I.G., I Quit!

[Azure]

Originally Posted by Bobblehead

But to have a gov't bill passed specifically to claw back an amount that was contracted before any of this mess ever began just strikes me as unjust.

Unjust and wrong in the court of law.

[Daradon]

Originally Posted by Azure

The bonuses were handed out long before any bailout occurred. AIG is responsible to fulfill the contracts they signed, despite the governments 'outrage.'

Its hilarious how people are up in arms over 1/10 of 1% of the money AIG got.

Maybe because stuff like that would never happen to us. If our company failed, we'd lose our job, and probably some pay too. I know I have.

And the 'contract' thing is such a load. Yes that's how it works during normal times. But not when you're company is being bailed out. I would suggest different rules apply under those circumstances. You don't like it? Too bad, go work somewhere else. Which is what this guy is doing.

The alternative is the company go under. Which I am beginning to think should have happened. But if it did, I don't think he would get that bonus anyway, as they were in debt.

I guess it depends if the bonus was already paid, or just agreed upon when the bailout was reached. If it already had been paid, then yeah obviously he keeps it. But if it was just under contract, and the company goes under, I don't think he sees a cent anyway.

[Bobblehead]

Originally Posted by MarchHare

Again, I have zero sympathy for this guy because he never should have agreed to a $1 salary. If I worked for a failing company and was asked to stick around for $1 while they try to right the ship, I'd tell them to shove it and find a new job. Last I checked, he wasn't held at gunpoint and forced to accept those conditions.

Nope, he wasn't forced; but if you did stay around, do your job, and fulfilled your part of the contract, wouldn't you expect that the other side should fulfill their share?

It seems to me that the players who go the company into trouble are already long gone. The good employees are the ones who are left behind. It would probably already have been hard enough to keep them around, but with this sort of junk, I wouldn't be surprised if this isn't the first of many resignations. And then where will AIG be? Sure, they can hire someone else, but a) what sort of a competent person would want that job with all its baggage and conditions and b) once you hire someone new, how long will it take them to get up to speed and become productive? Good luck with that.

[Azure]

Originally Posted by Tron_fdc

hmmm I wonder if any AIG employees will have the balls to sue if they're shirked out of their contracts.

I wonder how much that would cost........

They wouldn't even have to sue.

Like I said above, breach of contract usually results in the guy who got screwed over getting his money anyways.

[Azure]

Originally Posted by Igottago

Correct me if im wrong, but i dont think these contracts were written up under the assumption that government (taxpayer) bailout money would be used to pay them. Conditions have changed, the source of the money has changed, the company wouldn't be able to honour the contracts without the bailout anyways, so should the contracts still be honoured the same way?

.....and the contract is still the same, and needs to be upheld by both parties.

The Federal Government screwed this one up. Now the taxpayers are obligated, by law, to pay these contracts.

[HotHotHeat]

Originally Posted by Titan

So at the first smell of things going wrong the top executives will all flee to better/safer jobs. They are the ones that are in demand and will be hired. Why should they stay? Oh yeah, for the retention bonus. You give something to get something. You want the best and brightest to stay and help right the ship in a bad economy, you pay for it. That is the definition of the american way. You have a skill you sell it to the highest bidder. That is the system. Now you tell the guy, by the way, we are not going to pay you now. Please stay and work for that $1? No thanks.

What ever happened to rewards coming from success?

[Daradon]

Originally Posted by Azure

They wouldn't even have to sue.

Like I said above, breach of contract usually results in the guy who got screwed over getting his money anyways.

Yeah, but contracts don't amount to anything if the entity who owes it to you has no money.

If AIG had not received the bailout, they would probably not be able to pay bonuses. Other organizations, and lenders would probably get first crack at their assets. Employees would be very low on the list (I think).

So had they not been bailed out, I think it's fair to say the contract is not worth the paper it's printed on. Yeah, it sucks, but welcome to the real world.

[Azure]

Come on guys, you can't just breach a contract because the conditions are 'different.'

If the government is so concerned about this, they should take it to a court of law, and try to get the money back.

But they won't, because they can't.

Its just that the general public is too ignorant about contract law to realize who really screwed up here.

Also, AIG as a 'whole' didn't 'blow it.' IIRC, it was a certain section of the company who made bad mistakes.

There are a lot of good people who still work there, and even more who have probably been laid off.....all of which had nothing to do with any of the mistakes that were made.

[Daradon]

Originally Posted by Azure

Come on guys, you can't just breach a contract because the conditions are 'different.'

If the government is so concerned about this, they should take it to a court of law, and try to get the money back.

But they won't, because they can't.

Its just that the general public is too ignorant about contract law to realize who really screwed up here.

Also, AIG as a 'whole' didn't 'blow it.' IIRC, it was a certain section of the company who made bad mistakes.

There are a lot of good people who still work there, and even more who have probably been laid off.....all of which had nothing to do with any of the mistakes that were made.

Obviously you've never been screwed on a contract.

If the person owing you can't pay, it don't matter. If AIG had not received the bailout, they wouldn't be able to pay. The fact that the were bailed out changes everything on the books at that point because if they weren't, there wouldn't even be books, jobs, bonuses to discuss.

[Titan]

Originally Posted by HotHotHeat

What ever happened to rewards coming from success?

Did you read the link? This guy was crazy successful. His department made millions and he was compensated appropriately.

Just because another division made a bad bet and lost hard that does not take away from his success.

Clearly his management skills were identified and valued and that is why he was asked to stay on and help fix it.

Another way to put it, is a fireman unsuccessful if the house burns down? What if he saves a person before it burns? Or he saves the neighboring houses? To say this guy was not successful because his company went down is unfair and not accurate, IMO.

[MarchHare]

Originally Posted by Bobblehead

Nope, he wasn't forced; but if you did stay around, do your job, and fulfilled your part of the contract, wouldn't you expect that the other side should fulfill their share?

Since when did the other side did fulfill their share? My understanding is that AIG paid his bonus in full as stipulated in his contract. Did that not, in fact, happen? His own resignation letter claims that he received payment on March 16th...

His issue is that the government is going to tax most of his bonus away. Boo-freaking-hoo. He'll still net over $100K even if the 90% taxation rate is applied.

[Locke]

I love how the current economic conditions and actions elicited by it have just brought out the best in people. Its almost like every day is Christmas.

"Joy to the world!"
"You dont deserve that bonus."
"Well....to hell with you too then."

Good times.

[Titan]

Originally Posted by Daradon

Obviously you've never been screwed on a contract.

If the person owing you can't pay, it don't matter. If AIG had not received the bailout, they wouldn't be able to pay. The fact that the were bailed out changes everything on the books at that point because if they weren't, there wouldn't even be books, jobs, bonuses to discuss.

I hear what you are saying but don't think the analysis holds up. If the homebuilder has a contract with the roofing supply company and the housebuilder goes under the contract is gone. But if another company buys the housebuilder, they have to honor the contract. The fed is the company that buys the housebuilder, or perhaps more accurately, the finance company that offers a line of credit to keep the housebuilder in business. Another difference though is that AIG has tons of assets and would not just disappear. They would declare bankruptcy and the process would in fact protect the employees, to a certain extent. The fact the feds put no conditions on the bailout is where the blame lies. The electricity company will still want to be paid. As will the landlord for their offices and the leasing company that supplies the computers. All based on contracts.

[Titan]

Originally Posted by Locke

I love how the current economic conditions and actions elicited by it have just brought out the best in people. Its almost like every day is Christmas.

"Joy to the world!"
"You dont deserve that bonus."
"Well....to hell with you too then."

Good times.

Any day now we will see Lockes roaming the streets feasting on the livers of the recently deceased. Carnage!!

Where oh where is Will Smith to save us?

[Igottago]

Originally Posted by Azure

There are a lot of good people who still work there, and even more who have probably been laid off.....all of which had nothing to do with any of the mistakes that were made.

Thats usually the case with any company that goes under.

[HotHotHeat]

Originally Posted by Titan

Did you read the link? This guy was crazy successful. His department made millions and he was compensated appropriately.

Just because another division made a bad bet and lost hard that does not take away from his success.

Clearly his management skills were identified and valued and that is why he was asked to stay on and help fix it.

Another way to put it, is a fireman unsuccessful if the house burns down? What if he saves a person before it burns? Or he saves the neighboring houses? To say this guy was not successful because his company went down is unfair and not accurate, IMO.

I would bet he also got a performance bonus from those successes.

[Dion]

[Titan]

Originally Posted by MarchHare

Since when did the other side did fulfill their share? My understanding is that AIG paid his bonus in full as stipulated in his contract. Did that not, in fact, happen? His own resignation letter claims that he received payment on March 16th...

His issue is that the government is going to tax most of his bonus away. Boo-freaking-hoo. He'll still net over $100K even if the 90% taxation rate is applied.

Could you imagine if Harper were to introduce a tax tomorrow that said everyone with the internet name MarchHare has to pay 90% tax? How would that feel? Just because it happened to him, means it can happen to you.

It is simply not fair. Like it or not our system runs on what is fair. It does not always turn out that way but that is the goal. How could any of us plan our affairs if the gov't could capriciously alter the landscape of yesterday at a moments notice? We could not plan our lives at all.

[Dan02]

Just wondering if everyone here who is against the AIG bonuses is going to demand Phaneuf give back a portion of his salary because he too has a contract and he too under performed.

If you want to argue that these execs are overpaid i'll be right there with you, but the fact is this was the agreed upon compensation. Pay the man(or woman), the source of the funds is rather irrelevent.

[MarchHare]

Originally Posted by Titan

Could you imagine if Harper were to introduce a tax tomorrow that said everyone with the internet name MarchHare has to pay 90% tax? How would that feel? Just because it happened to him, means it can happen to you.

If the goverment passed legislation to tax my base salary at 90%, you're damn right I'd be pissed. On the other hand, if my company was in such dire straights that it had to be bailed out by the goverment, and only my bonus -- not my salary -- was taxed at 90%, sure I'd be annoyed (who wouldn't be?), but I wouldn't quit because I'd recognize the unusualness of the circumstances. Of course, I would never be stupid enough to agree to a $1 base salary, so I'd have a lot less on the line than this guy.