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- dupswapdrop, on 11/16/2008, -1/+301Can I claim AIG executives as dependents on my tax return this year?
- unusualbob, on 11/16/2008, -2/+197AIG to Pay Millions To Top Workers
Move Comes on Heels Of Revised Bailout
By Carol D. Leonnig
Washington Post Staff Writer
Friday, November 14, 2008; D01
American International Group plans to pay out $503 million in deferred compensation to some of its top employees, saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant.
News of the payments to top AIG talent comes as the federal government has just put more money into saving the company from bankruptcy, beefing up the total public commitment to $152 billion. Meanwhile, members of Congress are questioning the company's expenditures -- including lavish business trips to resorts -- during a time when taxpayers are on the hook for the bailout.
AIG's troubles stem from bad bets it made guaranteeing and buying risky mortgage investments. On Monday, the U.S. government announced that it would have to expand its rescue of the company to nearly double the $85 billion loan it first provided in September when AIG was unable to pay billions of dollars in claims.
Treasury officials said earlier this week that they had imposed some of the most stringent limits ever on AIG executives' bonuses and compensation in exchange for the broader bailout.
AIG's plans to crack open its deferred compensation bank for payments early next year is conveyed in a two-sentence paragraph buried inside a quarterly financial report filed with the Securities and Exchange Commission on Monday. But some compensation experts and AIG stakeholders yesterday said they considered the exodus of $503 million in AIG money dubious at a time when the company is drenched in red ink. The company reported losses this week that brought total losses to $37.63 billion for the first nine months of the year.
AIG spokesman Nicholas Ashooh said yesterday that the company is desperately trying to keep top talent from leaving, and that giving them deferred compensation works as a carrot to keep them on board. He said more than 6,000 employees are covered by AIG deferred compensation plans, but declined to name any employees or the number of top executives who will receive the early payouts.
Companies over the past 20 years have increasingly use deferred compensation as a way to attract and retain highly paid executives. Under these plans, top talent can postpone taking some of their large annual salaries for years -- often until a set date -- and can put off being taxed on it. Some wait to take the funds until they retire, when they would presumably be in a lower tax bracket.
Most deferred compensation plans are arranged to encourage employees to stay at a company by holding money back, not paying it out early. Ashooh acknowledged that the company takes a significant risk that employees will leave immediately after they receive their deferred earnings in the first quarter of 2009. But he stressed that the funds are not from the government.
"This is not taxpayers' money they are going to run away with," Ashooh said. "We are trying to take the incentive away for people to leave now, until we have time to get the company running right again."
The issue of taking deferred compensation ahead of schedule arose during the Enron scandal, when top company executives who had reason to know the company was financially ailing quietly demanded that their staff pay them their deferred earnings ahead of schedule.
"If this involves putting the same responsible parties first in line [for AIG money], that is clearly not appropriate," said Lee Wolosky, an attorney for Starr International, the largest shareholder of AIG stock. "Half a billion dollars could clearly be better spent paying back the American taxpayer, rather than rewarding the same executives responsible for AIG's current condition."
Congress has also been complaining about how AIG's top executives are running the company and spending AIG money while taxpayers are bearing the brunt of keeping it afloat. Rep. Henry A. Waxman (D-Calif.), chairman of the House Oversight and Government Reform Committee, has been investigating how AIG has spent taxpayer money and demanded documents specifically on its bonus and compensation plans. - ridium, on 11/16/2008, -2/+130"Top talent"? Aren't most of those executives the people who got AIG in this mess? I would hardly call them "top" of anything.
- mikesoba, on 11/16/2008, -3/+102AIG should fail.
- elshizzo, on 11/16/2008, -0/+96Actually we got a lovely thank you note in return
it says "Thanks for the bailout money, but unfortunately we accidentally spent it all on bonuses and vacations, please deposit another 152 billion, OR YOUR WHOLE SYSTEM IS GOING TO COLLAPSE, HAHAHAHAHAHAHAHAHAH" - unusualbob, on 11/16/2008, -0/+96Class-action lawsuit?
no seriously, is this possible? - petitveritas, on 11/16/2008, -15/+87(note to "the grantman" - You have to sign in every decent paper - its free.)
The $503MM goes to the top executives as deferred compensation - not across the company. That is sick. Email and call your congress person and tell them a half a BILLION for failed executives is BULL. - thegrantman, on 11/16/2008, -57/+117Sign up to read the article? Buried.
- martalli, on 11/16/2008, -0/+42How about mob action? I can see now why people used to get tarred, feathered, and ran out of town on a rail. Time to return to our traditions, folks.
- slickrocktrail, on 11/16/2008, -1/+41Manager: "I am going to quit my $425,000 a year job and take $379 a week in unemployment unless I am guaranteed that $3,000,000 deferred bonus."
Board: "Damn, he is serious. We might lose him. We better pay."
WTF - hamobu, on 11/16/2008, -1/+36If top executives leave because they did not get their deferred compensation, I say good luck to them in finding a new job in this economy.
I think that companies should declare bankruptcy before they receive any government help. Bankruptcy does not mean the end of the company, but rather reorganization. Government should make sure that there is no liquidity crisis to avert larger calamity, but other than that, I could not see why is it important that AIG, GM, or any others survive this process. - omjeremy, on 11/16/2008, -1/+35***** AIG!!
- dafragsta, on 11/16/2008, -0/+32"We're not going to give them golden paracutes!"
Instead we're going to give them diamond encrusted PLATIUM parachutes. - stoanhart, on 11/17/2008, -0/+30You should, simply because it's true.
- IAmTheGuy, on 11/16/2008, -6/+33I had no problem with it.
- gleongelpi, on 11/16/2008, -0/+25Everyone I know who has a policy with AIG has cancelled it. If you are going business with them, stop. If you know anyone who is doing business witht them, explain to them why they should stop.
- macross9321, on 11/16/2008, -0/+25were in a global recession companies are trimming people every day - if their top people want to go let them good luck getting a new job
- blitzkriegpunk, on 11/17/2008, -0/+24If I could Digg you thrice, I would.
- pstroll, on 11/16/2008, -2/+25He voted for the bailout bill which pretty much gave Paulson the power to spend the money any way he wanted.
- V1ncent, on 11/16/2008, -3/+26I'm reading over you shoulder and was able to read it.
- sleestak240, on 11/16/2008, -0/+21Let me clarify...our plan is to compensate the high ranking individuals and executives that are highly skilled and intelligent and oversaw our company's decline. We definitely want to keep these talented people on board by giving them outrageous compensation packages. Then we will go ahead and layoff the lower employees that had nothing to do with creating this mess. We're trying to provide maximum return for YOU the taxpayer. The layoffs will be done in a classy fashion though...no emailed pink slips here...the executives will be giving a webcasted layoff message to our valuable employees from a yacht and resort vacation off the coast of Hawaii.
- thegrantman, on 11/16/2008, -0/+20Thanks...but that's only the second time I've come across that in thousands of articles.
I agree that it is bull. No one would consider this to be fair or even sane.
So why would our representatives allow it?
Money.The donations to our congressmen's campaigns(and probably offshore accounts) speak louder than do our letters. - quomen, on 11/16/2008, -2/+22I'm using Google Chrome on Vista SP1 with no account with Wash.Po. and I was able to read it.
- patpl22391, on 11/16/2008, -2/+22If you don't like the pay that your boss receives, then YOU should get a different job. They should have never got a bailout in the first place, and I hope all these stupid companies go under.
- dogfood, on 11/16/2008, -0/+19Thank you.
- eth3l, on 11/16/2008, -5/+23He voted for it, he encouraged it.
- neo991lb, on 11/16/2008, -0/+17***** them. They should have gone the way of the dodo bird by now. When companies can't stay afloat through their own efficiency- ***** THEM. We can't be expected to bail out a company that does this kind of *****. Subsidies for Boeing is one thing- this is just outright theft.
Oh, and it's ironic that a tanking company needs to keep on it's top employees in the first place. Double ***** those douchebags. They're still part of a company that's losing hand over fist. Maybe they should think of hiring different people and going in a different direction. Like maybe.. turning a profit? - Khast, on 11/16/2008, -0/+17Please remind me why we are bailing out these failed systems? I mean, between all these vacations, resorts, and benefits packages that the financial institutions are paying for, it's like a party up in the financial institutions.
They probably would have done better starting at the bottom, and having a trickle up effect.... I don't like welfare as much as the next guy, but if we are needing the little boost, we are likely to spend the money (which would help businesses), or put it in banks to save. (Which would aid the banks themselves.) - lemonfire, on 11/16/2008, -0/+16I'd digg you twice if I could. If we want to treat the cancer in these failed companies we have to cut it out, I very much doubt they want to leave their highly paid jobs voluntary.
- Edudris, on 11/16/2008, -0/+16If by removing this compensation they will lose employees, it will save them the trouble of having to do layoffs.
So lets be afraid of losing people thus giving "top valuable employees" buttloads of money we don't have and then later on realize that we don't have the money to keep operating so we have to lay off buttloads of employees. - grungegbunny, on 11/16/2008, -0/+16"Top Talent" my ass if they are so talented AIG wouldn't be in the position it's in.
- martalli, on 11/16/2008, -4/+20I hate to break this to you, but this is Bush's plan. I think you should look into a mirror.
- randypanda, on 11/16/2008, -0/+15Well at least I bought volcano insurance from AIG.
- workharderscum, on 11/16/2008, -2/+17'loan'? Ha! No american will ever see any of that money ever again. I can't tell you what weasel accountant ***** they'll explain it with, but that money is gone.
- inactive, on 11/16/2008, -7/+22probably will start off by saying "look...." and then meander off the subject to a story about a man in Iowa who can't support his family because he just lost his job and how this country needs change
- martalli, on 11/16/2008, -0/+14Lets confiscate all their stuff and sell it. I don't see why they can't operate out of an empty box store or two.
- inactive, on 11/16/2008, -3/+17I'm blind and I was able to read it.
- yesplease151, on 11/16/2008, -3/+17I'm illiterate and I was able to read it.
- remccain, on 11/17/2008, -0/+14"Companies over the past 20 years have increasingly use deferred compensation as a way to attract and retain highly paid executives. Under these plans, top talent can postpone taking some of their large annual salaries for years -- often until a set date -- and can put off being taxed on it. Some wait to take the funds until they retire, when they would presumably be in a lower tax bracket.
Most deferred compensation plans are arranged to encourage employees to stay at a company by holding money back, not paying it out early. Ashooh acknowledged that the company takes a significant risk that employees will leave immediately after they receive their deferred earnings in the first quarter of 2009. But he stressed that the funds are not from the government. "
***** them - they made a "bet" that the company would be around so they could take their deferred compensation, now the company is bankrupt and they lost that bet.
/cranky because I lost a bundle when my 401k tanked and no one is offering me a bailout for my 'deferred compensation". - reubensandwich, on 11/16/2008, -0/+14Do government civil service employees get bonuses? No they don't.
Do government bailout company employees get bonuses? Yes they do.
It's happened so many times in sports, companies, ect. You get rid of the people at the top, people at the bottom will move up. This is beginning to turn into the greatest bank robbery in history. - HolyMan28, on 11/17/2008, -2/+16I'm black and I was able to read it.
- omjeremy, on 11/16/2008, -0/+13Stop trolling your comments all over the place. The reason why people have a big problem with this is because we the taxpayers are bailing out these companies. Corporations need to be accountable for their own mistakes. I am and was against the bailout, so I could have written ***** the bailout also but figured this was more appropriate.
- everlast88, on 11/16/2008, -1/+14Jello Biafra says it best, "We have minimum wage, how 'bout a maximum wage"
- remccain, on 11/17/2008, -1/+14"I told all four that there are going to be some times where we don't agree with each other, but that's OK. If this were a dictatorship, it would be a heck of a lot easier, just so long as I'm the dictator," Bush joked.
-- CNN.com, December 18, 2000 - KSUdesigner, on 11/16/2008, -0/+13"We" aren't going to get a dime of it, interest or not.
- alexacastro, on 11/16/2008, -1/+13This is the same story in countless other firms being bailed out. Some are giving out up to 6 billion dollars to their top executives for "fear of them leaving"
LET THEM ***** LEAVE. They got us in this mess. They want to take their overpriced services elsewhere? Good ***** luck getting hired in THIS climate, *****. - diggit08, on 11/16/2008, -0/+12"...saying it must tap the funds to keep valuable workers from exiting the troubled insurance giant."
I personally would get rid of every ***** that caused a multi-billion dollar company to fail - trer, on 11/16/2008, -2/+14And if you really believe that, you are not in a position to judge stupidity...
"...fool me once, shame on — shame on you. Fool me — you can't get fooled again."
George W. Bush - osko2052, on 11/16/2008, -0/+11My car insurance renewal comes up in January. I will definitely be moving.
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