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AIG Asks Obama To Approve Its Bonuses

From an outraged (at AIG) Washington Post:

AIG Seeks Clearance For More Bonuses

$2.4 Million in Executive Payments Due Next Week

By Brady Dennis and David Cho
Friday, July 10, 2009

American International Group is preparing to pay millions of dollars more in bonuses to several dozen top corporate executives after an earlier round of payments four months ago set off a national furor.

The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage.

The request puts the administration’s new compensation czar on the spot by seeking his opinion about bonuses that were promised long before he took his post.

AIG doesn’t actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at AIG, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government

The payments coming due next week include $2.4 million in bonuses for about 40 high-ranking executives at AIG, according to administration documents from earlier this year. Though the actual sum may have changed since then, the payments are much smaller than those that caused the upheaval in March…

Feinberg, who previously managed the government’s efforts to compensate the families of those killed in the Sept. 11 attacks, has the power to determine salaries, bonuses and retirement packages for all executive officers and the 100 most highly paid employees at firms such as Citigroup, Bank of America, General Motors and AIG.

AIG’s upcoming payments do not fall under Feinberg’s official purview, as they involve bonuses delayed from 2008. Feinberg is charged with shaping only current and future compensation. As a result, some Treasury Department officials believe they are under no obligation to offer an advisory opinion in this case, which could leave AIG officials to decide the matter on their own, according to a person familiar with the talks…

Our descent into a banana republic (or Obanana republic) continues apace.

This article was posted by Steve on Friday, July 10th, 2009. Comments are currently closed.

9 Responses to “AIG Asks Obama To Approve Its Bonuses”

  1. proreason says:

    How is this different from you having to ask the compensation czar whether you can have a salary increase?

  2. Trogdor says:

    See what happens when “Progressives” control the gubmint?

  3. MinnesotaRush says:

    Well goodness. Isn’t it time for the appropriate combination of czars to get these new federal employess over at AIG (and GM and Chrysler, etc, etc) on the federal system of compensation?

    I mean, after all, isn’t that where were headed. Get to work there Mr & Mrs Czars.

    • proreason says:

      It doesn’t look as huge as Medicare and Social Security yet, but while nobody is looking the extravegent pensions of gobamint workers are becoming a major financial crisis as well. (I’m not counting the military, who deserve everything they get.)

      California, as usual, is the tip of the sword.

      Nobody in private business gets the gold-plated, inflation-adjusted pension that everybody in the gubamint gets.

      But of course, the gubamint never goes out of business.

      Only we do that.

    • tranquil.night says:

      California, as usual, is the tip of the sword.

      Speaking of which, most of the major banks said they would stop honoring California’s IOUs today.

      I’ll be waiting to see what happens and if our state caves in because this is a point of contention between my Mom and I. She believes TARP I was necessary because the United States has to honor debts. I believe TARP was unnecessary and set a precedent for the unconstitutional grab by the federal government into the decisions of the private sector.

      She told me to watch what would happen today if the banks did indeed follow through with their vow. 10AM and the sky hasn’t fallen yet.

    • bronzeprofessor says:

      Tranquil & Pro, California is in such a mess it defies description. Unfortunately, it’s hitting home for me, as I do not know whether I will be laid off by California State U. There is a $580 million budget cap across the 23 campuses of CSU, and my campus, Northridge, has to absorb $50-70 million of the cuts. 80% of the campus budget is payroll…. and in my large department, I was the last tenure-track person hired.

      What’s so sad is that people in my union keep wanting to fight against any furloughs to save us from layoffs. The employees in the staff union — secretaries, office managers, janitors, gardeners, etc. — voted for furloughs so none of their co-workers would be out of work. Also, they understand that if 15% of the employees are laid off, the remaining 85% will have a hard time doing the work to keep the place running.

      But the faculty union, which is mine, represents people who make 2-3 times the salaries of people in the staff union. Within the faculty union, it is the long tenured, older profs who are most opposed to furloughs. So in a nutshell, on our campus, workers earning $40,000 a year are willing to take a 10% furlough to avoid layoffs, but professionals earning $110,000 a year are unwilling to make that sacrifice.

      The result, I predict, will either be layoffs (which will then lead to a downward spiral), or the entire CSU goes into bankruptcy court (or receivorship), in which case the governor can void the union contracts and do whatever he needs to do to cover the $600 million gap.

      I posted a list of 11 possible things we could do to save money, which I can cut an paste here:

      Professor R.O. Lopez’s suggestions of how to save money & prevent layoffs or furloughs

      1. Auction off the Oviatt’s special collections. In Buffalo, the Albright Knox Art Gallery auctioned off many of its artistic works and raised tens of millions of dollars for renovations.

      2. Strike a deal with a wealthy royal family from overseas, then name a large building after them. The American University in Beirut did this with the Saudi royal family and was able to generate an operating budget for buildings and staff to serve thousands of students.

      3. Sell some of the smaller activity buildings to a real estate developer. Can we let go of some of the small cultural houses? At my last workplace, Canisius College, they converted activity houses into apartments and charged rent. It brought in tens of thousands of dollars — enough to save a few salaries.

      4. Pre-plan electricity blackouts in certain buildings at certain times. That is what the American University in Iraq had to do, even when Iraq had a $79 billion budget surplus, which we clearly do not have.

      5. Shut down the university server after 8pm. Why not? That thing must use up endless amounts of energy.

      6. Organize a massive pilgrimage to Washington with students and staff from all 23 campuses, and protest outside the White House. Barney Frank just proposed using TARP money to bail out California. We should be the first ones to get that money.

      7. Swap space and more comfortable accomodations for some financial assistance, in a deal with military recruiters. The recruiting batallion of the US Army just relocated from Santa Barbara to Encino, and moved into new office space. There must be other batallions looking for space. Call up the Dept. of Defense, tell them we can get ROTC out of those tacky trailers behind University Hall if they help us out with some long-term partnerships that involve grant money to help us out.

      8. Maybe work with CALPERS and create a sweetheart package to encourage older faculty to take early retirement. If they start drawing from their pension funds, then at least their salaries won’t be drawing from our operating budget.

      9. Turn off the air conditioning. So what if we smell? I lectured in Nancy, France, and everyone on that campus had strong body odor — they got used to it and nobody died.

      10. Beef up intensive English programs offered to wealthy foreigners. My brother-in-law from Korea is shelling out $5,000 to the Northridge English institute, for a program that’s only a few weeks long. Those standalone programs can charge whatever they want and it seems like pure profit.

      11. Offer corporate sponsors the right to pricey exclusive marketing events in the main quadrangle.

      12. Raise tuition by $2,000 per student per year. With 30,000 students, that works out to $60,000,000.

      My suggestions, as you might predict, were met with laughter and derision. Instead the union keeps sending out letters describing how bad the Chancellor is and how it’s somebody else’s fault and we need to get together and get really angry. There is simply no sense among the faculty, that I can see, of a need to come up with solutions in conjunction with administration and Sacramento.

      This is a huge American tragedy. The only silver lining for me is that my induction into the US Army Reserves protects my job somewhat and I have a plan B (go active duty in a year) if I lose my job at CSU. But how sad.

    • proreason says:

      Professor, it’s just another example off libwits’ willingness for other people to bear any burden.

      Or in other words, “the buck stops somewhere else”.

  4. tranquil.night says:

    Good doggy. Yes, you may have your treat – err bonus. This time.

    Master’s got bigger fish to fry.

  5. Liberals Demise says:

    Remember the little dog sitting in front of a phonograph with the big sound horn on it? I believe it was the logo of RCA records and the saying on the record was, “Listening to his masters voice.”

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