While many of us lean right here at Mod-Blog, we try to tell both sides of the story whenever possible. So, it was with great interest that I saw the NYTimes had posted a resignation letter from an AIG executive who was in the middle of the bonuses scandal. It gives an eloquent defense of the bonuses and is worth a read.
The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers...As most of us have done nothing wrong, guilt is not a motivation to surrender our earnings. We have worked 12 long months under these contracts and now deserve to be paid as promised. None of us should be cheated of our payments any more than a plumber should be cheated after he has fixed the pipes but a careless electrician causes a fire that burns down the house.
Many of the employees have, in the past six months, turned down job offers from more stable employers, based on A.I.G.’s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.’s promises and are not inclined to return the money as a favor to you.
8 comments:
I think that "leaning right" would be THIS side of the issue. All of this congress special tax is garbage. I was down in Wilton yesterday and there were vans of protesters driving around to the bonus recipient's houses. Some of these people had nothing to do with the "creative financial packaging" and are having their family's threatened by protesters. I believe that the issue was framed with the inflammatory tone of "bonuses" for a reason. If it had been explained that this pay was part of their compensation package, people would be more understanding. Many of these people deserve the blame they are getting for the ruin that they have brought to the economy. But others are literally staying at a crappy company and working themselves out of a job. The only reason they agreed to do this is because they will get paid. I don't understand what all is going on, but I do know that this rash reaction is not the right reaction.
PS. This is the kind of garbage that stems from government intervention and "bail out". I am sick to death of the words "bail out" and "stimulus".
You're no longer allowed to have indentured servitude, so retention bonuses are the flip side. Assuming everything in this resignation letter is true (and I don't doubt that it is), I'm even more for giving these people what they're owed. We can debate whether the government should have renegotiated the retention pay back at the beginning of the government takeover, but the truth is that we agreed to keep those promises and now should - without a 90% tax.
I actually do NOT come down on the same side as most of you. I think many of the bonuses WERE egregious, and that AIG should have seen this coming. However, I agree that the 90% tax was a foolish overreaction. Not every injustice can be righted by taxation, and this SPECIFIC taxation is likely to be overturned in court as an ex post facto law.
The right move - in my opinion - would be to release ALL the info that the regulators have collected on who is responsible for the problems at AIG, and let shareholders take back this money in civil lawsuits. I am betting the judgements would have been for more than the bonuses, for those guilty. And those innocent would have been safe.
By, I am not a lawyer.
How many times do we have to kill the spammers?!
I've already seen an answer to this letter.. see http://weblogs.swarthmore.edu/burke/?p=784 if interested.
Take care,
Julie
I agree that bailouts are a bad idea and that the bonuses weren't the best idea. Though if employees did defer salary in expectation of a bonus such as this then I have more sympathy.
Mainly I think this is the result of the lenders (the US Gov.) not reading the terms and conditions close enough. If any of us enter into a contract that has horrible terms without reading those terms and the other party takes advantage of those terms we have to live with it. We have no recourse because we agreed to the terms - whether we read them or not. I know there's outrage over the bonuses, but had the government read the terms and thought them through we wouldn't be in this situation. I think the government needs to bend over and take it in this situation and make sure it doesn't happen again.
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