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Posts Tagged ‘Aig’

In numerous instances, media reporting on AIG’s employee retention bonus packages did not point out that it was the Bush Treasury Department that worked with the Federal Reserve in carrying out last year’s bailouts and bought AIG stocks notwithstanding the existence of these bonus contracts.

Ok, there you have. The AIG Bonuses happened on Bush’s watch. Do you people who found them without fault–do you now feel that you should be man, or waoman, enough to stand up and say you were?

I'm eager to hear your comments...

As a result of extraordinary abuses of the public trust by companies rewarding employees with excessive compensation while receiving billions in taxpayer assistance, today the House passed legislation (HR 1586) to hold companies, including American International Group (AIG), accountable for the bonuses that were paid to their executives. The bill will impose a new 90 percent tax on bonuses received by executives who worked at companies, such as American International Group (AIG), that received more than $5 billion in taxpayer assistance. After receiving more than $170 billion in taxpayer funds, AIG paid $165 million in retention payments to executives most of whom have mismanaged their company into near bankruptcy. The top recipient received more than $6.4 million and more than 73 of these executives were paid over $1 million in retention bonuses. After receiving their retention bonuses, at least eleven recipients left the company.

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“Harvard student takes on Rep. Frank” tinyurl.com Fox 25 My Fox Boston www.myfoxboston.com often is chock full of good content and is one of my regular stops when Im surfing the net for news. In this clip from last Monday, April 6, 2009, Fox 25 My Fox Boston has captured an exchange between Rep. Barney Frank (D-Mass) and a conservative Harvard law student CAMBRIDGE, Mass. (myfoxboston) – It all started with a question: “How much responsibility, if any, do you have for the financial crisis?” Rep. Barney Frank (D-Mass) and a conservative Harvard law student debated over how Frank should have handled his role as the House Chairman of the Financial Services Committee. Frank was at Harvard University for a speech at the Kennedy School of Government. Read the entire Fox 25 My Fox Boston www.myfoxboston.com story here: tinyurl.com And oh, Rep. Franks explanation of events is inconsistent with much of my reading. In October 2008, I wrote a three-part series, called Congress and the Rattlesnake in The Tentacle. Part 3 was published on October 3, 2008 and it addresses some of the history of the ultimate subprime mortgage economic crash of September 18, 2008 It may be found here: www.thetentacle.com And while you are there, check out some of these video/stories also on Fox 25 My Fox Boston: Rep. Frank calls Scalia a ‘homophobe’ Massachusetts Rep. Barney Frank called Supreme Court Justice Frank assails AIG bonuses Rep. Barney Frank charged Monday that a decision by fin Frank hopes to …

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Copyright (c) 2008 Drew Stevens PhD

I just completed my morning coffee and dose of Wall Street Journal when I read that AIG the world’s largest insurer, spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, the expense-spent days after a massive billion-dollar bail out. These egregious individuals used money-borrowed money for an annual sales feast.

Not only is there issue with the timing of the event, but also once again, we take issue with leaders that lacking critical thinking, empathy, and humility. While many pundits find concern with interest rates and liquidity, the true issues lie in the leadership of many banking and credit institutions. The avaricious leadership of many organizations operates in a callous vacuum with little concern for its most vital assets- employees and customers. The items binding these assets to leaders are trust and respect, which appear to feverishly diminish. The problem with many of these leaders is creating a Darwinian environment. It is difficult to question the morale and productivity issue when so many leaders are narcissists and employees abhor their leaders.

Fortunately, there is a microcosm of these leaders. Many others understand the value of the employee and the mantra of customer first. Curiously, what is it that separates quirkiness from exemplary? We believe it comes down to six basic premises.

Exemplars. It seems ages ago, but leaders once were within organization. Names such as Iacocca, Lincoln, Ford, etc, were associated with pragmatism and trust. Very few leaders allow innovation, collaboration and excel at organizational communication. Present leader must illustrate vision and value. They need to say what they mean and mean what they say. When more leadership personifies with names such as Jobs, Kelleher and Barrett, the trust factor will return.

Accountabliity. Our firm speaks of this much simply because there is not enough. Leadership simply does not hold individuals accountable. In addition, current boards of directors do not hold leaders accountable. Ethically – speaking boards and their directors continue morale corruption stemming from perennial relationships. These must terminate. Boards must develop from strangers and stakeholders that desire organizational best interests. Further, boards and executives must be accountable. Rather than pacify with bonuses, and options, underperforming leaders must amend or terminate

Action. Similar to issues of accountability, organizations must require timetables and action steps. Employees and executives bemoan work. We often hear how occupied individuals are. We constantly hear of the complaints related to massive workload. However, statistics show that workload relates to procrastination. If organizations are so busy individuals would not have time for cigarette breaks, lunch or in the case of AIG spa outings. Ethics. Where are the ethics in organization? After the debacle of Enron and World Com, Congress developed the Sarbanes-Oxley Act to protect against flagrant behavior. Organizations cannot provide an ethics assessment for each leader, but clearly, organizations with issues lack leaders with integrity. When Boards of Directors place more checks and balances on the leadership, perhaps there is a return to normalcy.

Communication. Where is the feedback in organizations? Leaders must provide consistent and constant communication. A study by the Corporate Leadership Council in 2003 reveals leaders have a tremendous impact on an employee’s level of commitment, of which 70% is relationship. If communication is the core of any relationship, leaders cannot overlook the most vital tool. If leaders are too absorbed begin leaders, perhaps it is time for a change.

Trust and Respect. When leaders lose trust, they lose everything. We use an exercise in our workshops comparing good and bad leaders. The core or each is charisma and trust. Followers that trust leaders, do anything for them. Review history for great examples, from Attila the Hun, to Hitler to Saddam Hussein; the respective followers right or wrong, place all their faith because of trust. Similar to communication, trust is the core of great leadership.

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out of your greedy little hands?
Chuck has given them a clear choice. The choice he gives them is that they have no choice. Don’t do it mr . liddy!

Should it come to this showdown, will republlican senators try to block passage of a bill to take the bonuses back should AIG be arrogant enough to proceed with them?

What do you think? Please comment below to tell me.

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Sen. Christopher Dodd on Monday suggested a tax provision to recoup the bonuses for executives of ailing insurance giant AIG.

good idea? Heck yeah!

What are your thoughts on the subject?

Representative Thaddeus McCotter lays out the case for wanting to recoup all of the bonus money, but not through taxation akin to a Bill of Attainder

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Out of 180 billion dollars of bailout AIG received from the Government,more than 170 billion dollars were directed to the payments of the insurances to the counterparties.And who are these counterparties?Among the counterparties receiving payments there are Societe Generale, Deutsche Bank, Goldman Sachs, Merrill Lynch,Barclays bank, Citadel and municipalities in 20 states including California and Virginia.Goldman received an aggregate $12.9 billion. Among European banks, SocGen was the biggest recipient at $11.9 billion, Deutsche got $11.8 billion and Barclays was paid $8.5 billion, Reuters reported. I offer to those who are loudly screaming to crucify AIG to explain to us what the consecuences would be if AIG did not pay what it had to pay by the agreements signed with these counterparties?The most probable outcome would be that dozen of the biggest European and American companies and banks would have by now been broke,and the crisis would become much more serious than it is now.
AIG accepted the losses-but saved the world economy from the total collapse.And AIG Chairman and Chief Executive Officer Edward M. Liddy was absolutely right whn he said at the press release disclosing the names of its counterparties “that billions in government assistance flowed to dozens of financial counterparties and municipalities during a time of acute stress in the economy.”
The main outcry about “this bad AIG” raised when the unit responsible for AIG’s near collapse,AIG Financial Products( AIGFP) announced that it is distributing bonuses of $165 million. AIGFP is responsible for writing billions of dollars in credit default swaps. CDS’s as they are known are essentially insurance contracts against a bonds default. Shielded by AIG’s then triple A credit rating, the unit did not adequately reserve against these contracts, leaving AIG in need to raise billions and billions of dollars when its rating was cut. It´s all true,AIGFP demonstrated unbelievingly poor management. But the problem is that this does not liberate AIG from the obligation to pay the bonuses AIG is contractually obligated to pay,even if it agrees that the AIGFP executives are a bunch of idiots.
AIG is trying to fulfil all its contractual obligations,as any honest insurance company must do. Should we criticize AIG for trying to be honest even in the hard times?
BTW,have you noticed that the shares of AIG have risen 70% in the last two days, in spite of the screams about how AIG “spent the money of the honest taxpayers”?The investors who are no one´s fools, understood the situation – and rewarded AIG for the effort and sacrifice.
“The folks willing to take the bonus show a complete lack of character and if the company is concerned the execs will leave because they did not get enough compensation – you should say good riddance! They are the same leaders that took them to the point where they needed the bailout in the first place!”
Totaly agree.But Ihope you understand that the morals will not be taken into consideration in Court?The folks,if AIG refuseso pay,will sue it-and get their money all the same.And AIG will have to pay the exorbitant fees,plus the bonuses.
I think AI is doing what it has to doIt will most probably fire these guys,but it has to pay what was agreed.
If I signed the contract with you,it´s my obligation to fulfil it,even if you put on fire the orphanage and steal he money from the childrens´charity fund.

What do you think? Please comment below to tell me.