90% tax on US AIG bonuses
- Thread starter DominicStar
- Start date
Not at all. It has nothing to do with the amount of money or fat cats. I would be arguing the same points. For anyone what ever their pay was.
Following on from my last post, and with a bit more digging, the reality of the matter is that these bonuses were retention bonuses to those working to wind down the financial products division at AIG. That is, people who agreed to stay in a dead end job working to close something down.
Source (Yes, I'm aware it's a blog, but the above comes from AIG CEO Edward Liddy's presentation to congress)
Are we really saying these people shouldn't get the payments they are contracted to get, given that they have nothing to do with the problem?
http://www.newser.com/article/d970d...nuses-in-testimony-before-congress-today.html
Another source
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They should be glad to still have a job. Expecing a bonus on top of that is just silly. How many other people do you think are affected by this "situation" who have "nothing to do with the problem"?
Do you think the situation would have been improved had these people left and been replaced with less experienced ones? Even if AIG had been allowed to go bankrupt (which is what should have happened, followed by support for those companies suffering if stability was a concern, but supporting foreign businesses directly was seen as unpalatable) the winding down work would still need to have been completed, and if you want to do it well, you need to pay well to attract/keep the good staff.
So it would have been better that these people had left AIG and got jobs elsewhere and left AIG with $1.1 trillion more exposure? You don't offer retention bonuses to people that couldn't find a job elsewhere.
Soldato
peanuts anyway.
Dont be so case specific. The law does not only apply to AIG does it?
Thing is, you make them look like victims while they were rescued with government money. This money is supposed to keep the company afloat for long enough till they can stand on their own legs again. Wasting this money on bonuses while the company is in trouble is irresponsible.
They were at risk of losing it all and now they cant live with without a bonus? I understand that people will get angry if they dont get what they expected when signing a contract - but they should not be angry at the governemnt but rather the companies that created this whole mess.
Thing is, you make them look like victims while they were rescued with government money. This money is supposed to keep the company afloat for long enough till they can stand on their own legs again. Wasting this money on bonuses while the company is in trouble is irresponsible.
They were at risk of losing it all and now they cant live with without a bonus? I understand that people will get angry if they dont get what they expected when signing a contract - but they should not be angry at the governemnt but rather the companies that created this whole mess.
To be honest I don't really care about the specifics of the case, I just don't like the idea of passing retrospective laws and allowing the government to ignore contract law via that method. Do you honestly think it is a good idea for a government to decide that something you did which was legal is now illegal and charge you for it? do you think it is a good idea for a government to suddenly decide that you have too much money and then enact a law to retrospectively tax it?
No, it applies to several companies who have already taken bailout money on specific terms, which makes the retroactivity of the legislation more unacceptable.
They are victims due to the ex post facto nature of the legislation, not because they took bailout money. As for the bonuses, would wasting it fighting lawsuits for contracts they had to honour be any better? They would still have to pay the bonuses, and then they'd have to pay legal fees as well...
It is the government that is trying to retrospectively alter several contracts, or retrospectively remove contracted benefits by alternative means, therefore the government is exactly who people should be angry with.
You got a point there. I agree with you that trying to retrospecively alter contracts is very undesirable. But thats not my point.
My point is that the bailout money is not meant to be spent on boni and in my opinion this is what the government is trying to discourage. According to your posts the people from AIG really seem do deserve this bonus money, but as I have mentioned this law does not target AIG alone and I belive it is the better alternative to tax bonus money then to not bail anyone out.
My point is that the bailout money is not meant to be spent on boni and in my opinion this is what the government is trying to discourage. According to your posts the people from AIG really seem do deserve this bonus money, but as I have mentioned this law does not target AIG alone and I belive it is the better alternative to tax bonus money then to not bail anyone out.
See, this is the crux of my (and RDM's) point. In my opinion it negates all other points about the bonus being undesirable. Retrospective or ex post facto punative legislation is unacceptable, with no exceptions. (It's also unconstitutional in the US, so it could be interesting to see if this passes constitutional muster if challenged)
I would agree, if the restrictions had been a condition of the bailout, rather than applied retrospectively.
If these bankers want to play a game of " my legal contract says i can get this much, then I dont see why the Gov cant play the same game of legal loopholes to get back what they gave them.
What most poeple loose scale of is the fact theat most Govs put thier finacial systen into the hands of all the big banks and the poepe who ran them.
They failed, utterly and totally, they deserve nothing. Im tired of idoits having protection because of a piece of paper.
What most poeple loose scale of is the fact theat most Govs put thier finacial systen into the hands of all the big banks and the poepe who ran them.
They failed, utterly and totally, they deserve nothing. Im tired of idoits having protection because of a piece of paper.
Soldato
Without the bailouts the people would have lost their jobs and not got any bonus money; I think this gives the government the right to re-adjust contracts. If the employees don't like it, they should be allowed to opt out and be treated as if the company has gone bust.
Associate
people mention bonuses as part of their contracts... surely somewhere they mention its performance related - or am I being naive? So cleary, they should not be getting any bonuses. How then by doing this are the government breaking contracts? - unless there was no mention of a link between performance and bonus?
They are holding onto technicalities and loopholes and am glad the government is doing the same.
They are holding onto technicalities and loopholes and am glad the government is doing the same.
So you have no problem with retrospective legislation? You have no problem with signing a contract that could be later voided by the goverment? You have no problem with something being legal and later the law being changed so it is illegal and then you getting charged for it?
Forget for a moment about the bonuses and think about the wider implications of retrospective legislation.
Soldato
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But this piece of retrospective legislation is, as far as I know, only being put in place because of the lack of regulation applied to the bailout bills by the Bush Administration.
So essentially, Obama is having to deal with Bush's mistakes therefore he's playing a political game and needs to be seen to be doing something about these bonuses that he initially had no real say over.
Is any of that right?
Get a grip man dear, we are talking about fat cats who have spent money on all sorts of crap from these bailouts, AIG spent 10million on new offices and branded it restructuring lol, yea good'un, and still think they are deserving.
Most of us will work jobs with short contract saying in a nutshell " you do you work right you keep your job, you don tyour fired, andif times get tuff we can let you go a short period of notice", no big payoff no bog Gov sponsored rescue plan coming to save us, we ar out on our todd.
This does not set a president for legitration in the future it will have no bearing on any such thing, it can't and wont.
Just to go firther, we are in the same boat, we have no legal connection to the financing banks and companies we have huge stakes in, that Obama and the Senate want is a legal connection to at leasthave some control in what is done with their money, that seems fair.
As said, if you have read the bill propsed, this can have nothing to do with any other gov contract.
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Soldato
RDM, obviously you are twisting this to suit your POV. Remember, just for a minute, what these people would be doing if the government hadn't bailed out their company? They wouldn't have a job, let alone a contract and certainly not a sniff of a bonus. I think, even if they got 0% of their bonus, they have come out of the situation a lot better than most. After all, they still have a job.