Impact
 

I've been saying this for a week.


http://www.nytimes.com/2009/03/25/op...=1&ref=opinion

His resignation doesn't make a lot of sense.

Why agree to work for a dollar and then expect a million dollar retention bonus for your effort?

Does that not defeat the purpose of working for a dollar?

Smells to me.

-spence

What were you ranting about for a week?

you're insane

oops!
Amid the flap over bonuses at American International Group Inc. two of the company's top managers in Paris have resigned. Their moves have left the giant insurer and officials scrambling to replace them to avoid an unlikely but expensive situation in which billions in AIG trading contracts could default.

Representatives of the Federal Reserve, AIG's lead U.S. overseer, are talking with French regulators and AIG officials to deal with the consequences of a complicated legal scenario in which the departures of the managers in Banque AIG, a subsidiary of AIG's Financial Products unit, could trigger defaults in $234 billion of derivative transactions, according to people familiar with the situation and a document AIG provided to the U.S. Treasury.

So the US Government owns 80% of AIG and now people are bailing. Suprised? Thanks for the wrath Barney and Barry! I'm sure someone qualified will take their place, who wouldnt want a job with no bonus with a failing company under the scrutiny of incompetents in Washington.

yeah Spence, appears the guy is a hack....

Wednesday, employees at the insurer gave a standing ovation for Jake DeSantis, an executive in AIG's financial-products division, who was the first to publicly refuse to return his retention bonus despite an outcry over the payments.


Mr. DeSantis resigned Tuesday, arguing in a New York Times op-ed piece Wednesday that AIG employees are being "unfairly persecuted." A firestorm of protests has erupted over $165 million in retention payments to employees of the unit. Fifteen of the top 20 recipients of the retention bonuses have agreed to give back a total of more than $30 million in payments.

Yea, right.

So please explain how a million dollar retention bonus makes sense for someone who's agreed to work for a dollar.

-spence

Spence, do you work in a bonus eligible position at the Institute for Doubletalk and Convoluted Logic, located atop the moral highground? Or do you just take a straight salary?

Ok - I will (but seriously, i think you're smart enough to know this)
As a profitable leader in AIG, his work was determined to be essential to unwrapping the business to position it to sell off its components.
As a gesture, he , and others did not take an annual salary. In return, the company had to "secure" him so that he did not get up and leave. Why would he stay at a company that is folding? Beleive it or not, he has to pay his bills and his kid's college expenses too. So the company offered retention bonues. The gist - stay here and clean this mess up and you will get paid. Not uncommon in any takeover or restructuring effort.
When the "outrage" started, the head of AIG did not stand up for the emplyees, He showed no balls and did not explain the contracts, did not commend his employees for their hard work, did nothing.
Read the WSJ, people are getting death threats. Employees are huddlied in conference rooms trying to figure out what to do. How is any of this helpful to turning around AIG?

Pro-bono :hihi:

-spence

I understand all of that.

My point is, if I agree to work for a dollar, knowing that at the end of the year I'm going to get a bonus of a million...Am I not working for a $1,000,001 with a lump sum payout at the end of the year?

Why not just pay them a million a year with no bonus? Or give them a bonus in deferred compensation.

It just sounds like they're playing games with semantics.

As for death threats...not much can be said about that other than it's wrong.

-spence

:rotf2:
You're a pissa.

I think its a gesture. he probabaly had a base of 400k and got a 1M bonus in a good year. It appears that is what many of the execs are doing at other financial companies , dropping the salary

From what I understand they were given a guaranteed 2008 bonus equal to their 2007 bonus as a retention incentive.

The idea being, you made us a lot of money in 2007, but we know 2008 is going to be rough, so regardless of what happens we're going to treat you like times are good so you don't jump ship.

Then they take a 99.999% cut of their base pay, knowing that they're still going to make a lot of money at the end of the year. I don't think for a moment your average finance exec is going to work for free out of a sense of altruism.

Now the economy really tanks and AIG is going to go bust without government help. If AIG folds they probably don't see their bonus.

The government steps in and backs the money truck up to the front door. Taxpayers then fund the bonuses guaranteed to the execs to have retained them for the past year.

Ultimately, it looks like the taxpayer has assumed the personal risk that these execs took by staying on with no salary.

The entire situation is wierd.

-spence

Weird is right Spence. And Obama, Pelosi, Dodd and Giethner were shocked to find out that they wrote the bill that allowed them to keep those bonuses.....weird, very wierd. Unless your campaign recieved 100K from AIG, then it's not weird, just corrupt

Have you read the entire letter by DeSantis, Spence? It's actually pretty eye opening. The guy gave up a lot and still gets ripped by the public because they think he and his business division are the root of the problem. The anger towards AIG is justified, but it's misplaced.

Yes, I've read the entire thing. I think he makes a few good points, for instance I agree that many are taking personal attacks that are not warranted, and that it looks like the leadership at AIG is guilty mixed messages.

But others, like the notion that people deserve the contract money because they could have had other job offers doesn't resonate with me. I know people in similar situations recently who have been layed off by a new employer when they had other more stable options. Sometimes, it's just the way the cookie crumbles.

I also, still, don't understand the ethical issue of toiling for no pay when you're working under a million dollar bonus contract.

-spence

Spence, did you get his point that the overwhemling majority of the people who got bonuses had nothing to do with causing the problem? Why in hell are we punishing those that we NEED to fix the problem? I have no clue what you keep dancing around, get over the $1 salary, thats not the point.. The fact is the government determined the economy NEEDS AIG. Like all financial companies, the "NEED" is people. AIG doesent build cars. If the job is going to get done, you need the best and the brightest. DeSantis sounds pretty damn good to me and he said screw you to AIG and the congress. And you know who else got shafted? The taxpayer. There is no way in hell that they're going to get anyone in to replace him. Why would anyone take the job?AIG and Congress has also put a gun to the head of those that are still there. I guarantee that this is just the tip of the iceberg unless Obama backpeddals, which it appears this week he is.

(In my best Spence voice)
But Jimmy, why is he only taking a salary of $1 and getting a guaranteed bonus of $1million? Sounds to me like he's getting a salary of $1,000,001. Why is he paid only $1? It doesn't make any sense. Did you know he only has a salary of $1, but his bonus is $1million?

What you're describing sounds like extortion to me.

-spence

The moment Cuomo said 'return the bonuses and we wont release your names' it became extortion..