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AIG, their payoff, and now they party???

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jamma

Oct 8, 08 10:26

Post #1 of 29 (672 views)

AIG, their payoff, and now they party???	Can't Post

How is AIG still being funded by the government? This is a joke. They use taxpayer money to prop up these clowns and then they run up
nearly $500,000 for an executive retreat at a resort? The Govt should recall their loan, fine the pricks, and let the bastards sink into the
slop they created. Great to have oversight. This is just like giving money to a junkee to fund their habit. I also saw they were attempting to
sell off units of AIG to pay off this loan. Hmmm, maybe they should have done that before coming and asking for a payoff/bailout. And there's no
guarantee that the gov't will get the loan back. Insane.

http://consumerist.com/...ig-goes-on-vacation/

Marco in BC

Oct 8, 08 10:50

Post #2 of 29 (646 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

rock and a hard place, this is what execs are used to nowadays, if you start treating execs like normal employees (who fly economy, usually are capped on per-diem so they have to stay in the cheapest hotels they can find, sometimes two to a room even) they will go to another company with a board that's more 'friendly' to this kind of expenses.

--
A wise man can learn more from a foolish question than a fool can learn from a wise answer.

(This post was edited by Marco in BC on Oct 8, 08 10:51)

jedi_tri_guy

Oct 8, 08 10:58

Post #3 of 29 (629 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

Looks like more people need punches in the face just like the Lehman's guy got. And that is getting off easy. I'd like to volunteer!

=====================================

Use the FORCE!

If that doesn't work then just hang on tight.

(This post was edited by jedi_tri_guy on Oct 8, 08 10:59)

big kahuna

Oct 8, 08 11:35

Post #4 of 29 (595 views)

Re: AIG, their payoff, and now they party??? [Marco in BC] [In reply to]	Can't Post

rock and a hard place, this is what execs are used to nowadays, if you start treating execs like normal employees (who fly economy, usually are capped on per-diem so they have to stay in the cheapest hotels they can find, sometimes two to a room even) they will go to another company with a board that's more 'friendly' to this kind of expenses.

It's only because we let them get away with this sort of nonsense. If any of them had any sense of what real leadership is, or their fiduciary duty to their shareholders and internal customers (their employees, for the most part), they wouldn't engage in any foolishness. The problem is they think they're some kind of masters of the universe or something.

Andrew Grove, founder of Intel (and Chairman Emeritus), ate his lunch in the employee cafeteria, with the rest of the Intel team. And parked his car in the employee parking lot, with the rest of the team. And any junior officer in the military worth his salt knows the troops always eat first, before any of the officers. And they get bedded down first, before any of the officers.

Ridiculous. I can't believe they're paid the sort of money they're paid, just to run the company down enough to need 85 billion dollars from the government and, by extension, US.

T.

IAMike

Oct 8, 08 11:37

Post #5 of 29 (589 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

Actually, they have been looking at selling of units for a while now. What the government loan gave them was the time to try to get the best deal on those units as opposed to holding a fire sale. There has been a fair amount written about AIG in the past month or so, this is hardly news.

By the way, I don't disagree at all with your feelings on the executive retreat (but I couldn't get your link to work, so haven't read this particular article about it).

Mito Chondria

Oct 8, 08 11:49

Post #6 of 29 (573 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

Not that I agree with the behavior and business actions of many C's out there, but wouldn't you feel like partying either after such a generous bailout that guaranteed your financial future?

Disgusting though.

A House of Cards ::: CIA Blowback ::: The Corrupt Banking System ::: US National Debt Clock

(This post was edited by Mito Chondria on Oct 8, 08 11:49)

MJuric

Oct 8, 08 12:44

Post #7 of 29 (547 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

$400,000 for a week long retreat at the resort. The bill included $200,000 for rooms, $150,000 for meals and $23,000 in spa charges.

I guess that's not too bad if there where 1000 people at the retreat. I'm guessing there weren't that many though.

~Matt

jackmott

Oct 8, 08 12:47

Post #8 of 29 (545 views)

Re: AIG, their payoff, and now they party??? [big kahuna] [In reply to]	Can't Post

bk

strangely I am in complete agreement with you

=)

jamma

Oct 8, 08 12:49

Post #9 of 29 (541 views)

Re: AIG, their payoff, and now they party??? [IAMike] [In reply to]	Can't Post

For those who couldn't get the link to work. After The Bailout AIG Bought Themselves A $440,000 "Retreat" At A California Resort

Now that AIG has been nationalized, some folks are wondering just how their tax dollars are being spent. If you're among them, we have some bad news for you from ABC. They are reporting that papers uncovered by congressional investigators show that "less than a week after the federal government committed $85 billion to bail out AIG, executives of the giant AIG insurance company headed for a week-long retreat at a luxury resort and spa, the St. Regis Resort in Monarch Beach, California." Ouch.
ABC says that the documents show that the company, yes the company, paid more than $400,000 for a week long retreat at the resort. The bill included $200,000 for rooms, $150,000 for meals and $23,000 in spa charges.

"They're getting their pedicures and their manicures and the American people are paying for that," said Cong. Elijah Cummings (D-MD).

AIG's former CEO told Congress today that AIG was a victim of a "crisis in confidence" and an "unprecedented global catastrophe," but records show that there were serious concerns about the way the company was being managed.

In March, 2008, the Office of Thrift Supervision wrote AIG, "We are concerned that the corporate oversight of AIG Financial Products�lacks critical elements of independence, transparency, and granularity."

Congressman Waxman also said that there was evidence that the former CEO changed the bonus schedule in order to insure that top executives would continue making multi-million dollar salaries, even as their company went broke.
"Mr. Sullivan and the other top executives should have had their bonuses slashed due to poor performance," said Waxman.
Sullivan received a $15 million golden parachute payment when he was let go in June, says ABC.

fitzie

Oct 8, 08 12:54

Post #10 of 29 (535 views)

Re: AIG, their payoff, and now they party??? [MJuric] [In reply to]	Can't Post

What is really amazing is they went on the retreat just a week after the bailout.
But then again, this is how these bastards (and their wives) live all the time.

"We thought that we had the answers, it was the questions we had wrong."
Bono

Marco in BC

Oct 8, 08 12:56

Post #11 of 29 (527 views)

Re: AIG, their payoff, and now they party??? [big kahuna] [In reply to]	Can't Post

In Reply To

It's only because we let them get away with this sort of nonsense. If any of them had any sense of what real leadership is, or their fiduciary duty to their shareholders and internal customers (their employees, for the most part), they wouldn't engage in any foolishness. The problem is they think they're some kind of masters of the universe or something.

there is no 'we' here, compensation at the executive level is set by, you guessed it, other executives (serving on each other's boards). It's just like when you see politicians voting themselves 30% raises to 'remain competitive in the market'. There is the widespread perception that once you are in 'the club' (execs & top tier politicians) you will never have to deal with issues normal people have to deal with, hence the compensations, 'retreats', private jets and so on.

The shareholders have been totally fine with all this for the past years where the stock price kept going up, and after this sudden crash when things will recover people will again forget all about it as long as their 401(k)s will recover. There is not much anybody can do to rein in exec compensation given that the perception among the people who could do something among it is that it's warranted.

--
A wise man can learn more from a foolish question than a fool can learn from a wise answer.

IAMike

Oct 8, 08 12:58

Post #12 of 29 (525 views)

Re: AIG, their payoff, and now they party??? [MJuric] [In reply to]	Can't Post

The more I read about this, the less upset I am by it. Yes it was at a swanky resort. No, it was not an Executive Retreat. It appears as if it was more of a convention where they celebrated the achievements of their independent agents than an executive retreat. Expensive, yes. But it looks like they had one $1600/night suite, a bunch of $425/night rooms, and even more $375/night rooms. My rough guess is that there were 80-100 rooms booked.

Washington Post link

Tri N OC

Oct 8, 08 13:10

Post #13 of 29 (508 views)

Re: AIG, their payoff, and now they party??? [IAMike] [In reply to]	Can't Post

I agree. Not exactly the Caligula moment people were envisioning.

American International Group Inc. Chief Executive Edward M. Liddy said a subsidiary's event that was criticized during a House committee hearing Tuesday was for top independent agents, not employees.

In a letter to Treasury Secretary Henry M. Paulson, Mr. Liddy said the agents were top business producers for the company, and of the 100 attendees, only 10 were employees of the subsidiary.

"No AIG executives from headquarters attended," the letter said, also noting that the meeting was planned months before the federal government gave the insurance giant an $85 billion loan to help it survive a liquidity crisis.

http://online.wsj.com/...l?mod=googlenews_wsj

fred_h

Oct 8, 08 13:16

Post #14 of 29 (497 views)

Re: AIG, their payoff, and now they party??? [MJuric] [In reply to]	Can't Post

[$400,000 for a week long retreat at the resort. The bill included $200,000 for rooms, $150,000 for meals and $23,000 in spa charges. ]

Being an AIG execs must suck, you have to pay with your own money for prostitutes....

Fred.

big kahuna

Oct 8, 08 13:51

Post #15 of 29 (469 views)

Re: AIG, their payoff, and now they party??? [Marco in BC] [In reply to]	Can't Post

The shareholders have been totally fine with all this for the past years where the stock price kept going up, and after this sudden crash when things will recover people will again forget all about it as long as their 401(k)s will recover. There is not much anybody can do to rein in exec compensation given that the perception among the people who could do something among it is that it's warranted.

Executives, or those earning their MBAs and the like and hoping to be executives, know this sort of stuff is flat-out WRONG. It sets a bad example for the troops, and it certainly isn't consonant with how management likes to inculcate a feeling of team spirit up and down the chain of command within the company. Simple fiduciary prudence, and a little good taste and CLASS, should have told these fellows that just the appearance of living high off the hog would hurt the company in the long term, and it has. "We" (shareholders) should have held them far more accountable than has been the case.

When I was getting my MBA, decades ago ;-), it was thought that a good rate of compensation for a top-flight CEO was on the order of 15 times the rate of the highest-paid hourly worker in the company. What is it nowadays, 400 or more times the rate? I'll bet you that number isn't far off.

T.

Marco in BC

Oct 8, 08 14:05

Post #16 of 29 (448 views)

Re: AIG, their payoff, and now they party??? [big kahuna] [In reply to]	Can't Post

In Reply To

The shareholders have been totally fine with all this for the past years where the stock price kept going up, and after this sudden crash when things will recover people will again forget all about it as long as their 401(k)s will recover. There is not much anybody can do to rein in exec compensation given that the perception among the people who could do something among it is that it's warranted.

Executives, or those earning their MBAs and the like and hoping to be executives, know this sort of stuff is flat-out WRONG. It sets a bad example for the troops, and it certainly isn't consonant with how management likes to inculcate a feeling of team spirit up and down the chain of command within the company. Simple fiduciary prudence, and a little good taste and CLASS, should have told these fellows that just the appearance of living high off the hog would hurt the company in the long term, and it has. "We" (shareholders) should have held them far more accountable than has been the case.

When I was getting my MBA, decades ago ;-), it was thought that a good rate of compensation for a top-flight CEO was on the order of 15 times the rate of the highest-paid hourly worker in the company. What is it nowadays, 400 or more times the rate? I'll bet you that number isn't far off.

last I heard it was in the 350-ies, so you are not that far off. The fact is that a GREAT officer IS worth that amount of compensation in my opinion, because an officer can make or break a company very easily, the problem is that great officers are few and far between, but that the average spread in compensation between executives is not nearly commensurate to their abilities. Also unfortunately the performance is often judged on a quarterly basis, where especially for larger companies you really would need to adopt a longer yardstick.

I am really not sure how things could be fixed, in an ideal world everybody at the officer level would be thrilled to be in a position where they can make such a big difference, and try to shepherd their company to a brighter future by focusing on long term goals (even at the expense of short term gains, outsourcing your entire development department and canning all your R&D will for sure make your options jump for 2 quarters making you a ton of dough, only of course to tank the company in a few years due to lack of innovation, but who cares, you've retired already or moved on) but then again human nature is what it is, and usually the people that would be running companies that way don't have the ruthlesness needed to rise to the top.

If your selection encourages lying, brown-nosing, backstabbing, image over substance and so on, there should be no surprise that people at the top will behave that way. The only advantage of a ruling class by birth (whether in a company, or in politics) is that due to the law of averages for every Caligula there was going to likely be a Marcus Aurelius, things the way they are the odds are a lot lower than an 'enlightened' person will rise to the top, this is why usually when the founder of a start-up leaves (usually because he's good at ideas, but not at politics) things go south.

I don't mean to sound pessimistic, but as I said, when you have an ecosystem that rewards a certain set of traits, it makes it really hard for other traits to emerge.

--
A wise man can learn more from a foolish question than a fool can learn from a wise answer.

(This post was edited by Marco in BC on Oct 8, 08 14:06)

Mito Chondria

Oct 8, 08 15:58

Post #17 of 29 (401 views)

Fed grants AIG $37.8 billion loan [In reply to]	Can't Post

Fed grants AIG $37.8 billion loan

http://ap.google.com/...QIcHaqKfQeQD93MJ6080

"CHARLOTTE, N.C. (AP) � The Federal Reserve on Wednesday agreed to provide insurance giant American International Group Inc. with a loan of up to $37.8 billion, on top of one made to the troubled company last month"

Edit: Where will they party this time? Maybe the Ritz down the Street, it's just a 2min walk from the St. Regis they are already familiar with...

A House of Cards ::: CIA Blowback ::: The Corrupt Banking System ::: US National Debt Clock

(This post was edited by Mito Chondria on Oct 8, 08 16:06)

MJuric

Oct 8, 08 16:14

Post #18 of 29 (392 views)

Re: AIG, their payoff, and now they party??? [fred_h] [In reply to]	Can't Post

I know I'm getting f'd and I'm actually paying for the pleasure...so not a bad deal for them :-)

~Matt

Mito Chondria

Nov 9, 08 17:36

Post #19 of 29 (291 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

And the AIG party continues....

http://biz.yahoo.com/...109/aig_bailout.html

Already at $150Billion...I know, preferred stock but in order to cash in some day this thing has to be profitable at some point...

A House of Cards ::: CIA Blowback ::: The Corrupt Banking System ::: US National Debt Clock

Dapper Dan

Nov 10, 08 5:17

Post #20 of 29 (240 views)

Re: AIG, their payoff, and now they party??? [Mito Chondria] [In reply to]	Can't Post

AIG exec's were spotted at a local resort here (Scottsdale) last week having a conference, but attempts were made to hide the fact that it was an AIG meeting. You can read the article and decide whether it is justifiable or not. In any case they were unsuccessful in hiding it from the press. They don't exactly appear to be controlling costs.

http://www.abc15.com/...f7-af14-3714d80b9107

kittycat

Nov 10, 08 5:47

Post #21 of 29 (223 views)

Re: AIG, their payoff, and now they party??? [Marco in BC] [In reply to]	Can't Post

In Reply To

rock and a hard place, this is what execs are used to nowadays, if you start treating execs like normal employees (who fly economy, usually are capped on per-diem so they have to stay in the cheapest hotels they can find, sometimes two to a room even) they will go to another company with a board that's more 'friendly' to this kind of expenses.

are you freaking kidding me?

let them fucking go to another company who will pay for their incompetence!!!

i wouldn't be so worried that the people responsible for the failure would try to find another job. my god.

why aren't these guys in prison!?

(This post was edited by kittycat on Nov 10, 08 5:47)

fitzie

Nov 10, 08 6:54

Post #22 of 29 (204 views)

Re: AIG, their payoff, and now they party??? [Mito Chondria] [In reply to]	Can't Post

And the AIG party continues....

"WASHINGTON � The government on Monday provided new financial assistance to troubled insurance giant American International Group, including pouring $40 billion into the company in return for partial ownership.

The action, announced jointly by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company. All told, the moves boost aid to the company to around $150 billion in what is likely to be the largest bailout to a single private firm. Fed officials, however, expressed confidence that the money would be repaid to taxpayers.

The $40 billion infusion comes from the recently enacted $700 billion financial bailout package. The government is buying preferred shares of AIG stock, giving taxpayers an ownership stake in the company. In turn, restrictions will be placed on executive compensation at the firm.

As part of the new arrangement, the Federal Reserve is reducing a $85 billion loan it had made available to AIG to $60 billion. The Fed also is replacing a separate $37.8 billion loan to the insurance company with a $52 billion aid package.
The actions were needed to "keep the company strong and facilitate its ability to complete its restructuring process successfully," the government said."

http://news.yahoo.com/...on_bi_ge/aig_bailout

"We thought that we had the answers, it was the questions we had wrong."
Bono

bcn0204

Nov 10, 08 10:10

Post #23 of 29 (171 views)

Re: AIG, their payoff, and now they party??? [Dapper Dan] [In reply to]	Can't Post

AIG exec's were spotted at a local resort here (Scottsdale) last week having a conference, but attempts were made to hide the fact that it was an AIG meeting. You can read the article and decide whether it is justifiable or not. In any case they were unsuccessful in hiding it from the press. They don't exactly appear to be controlling costs.

Taken from the article: "We also watched as half a dozen of the executives went to dinner at McCormick & Schmick's at the Camelback Esplanade, racking up a bill of more than $400 for drinks, appetizers, and meals."

That only comes to about $66 per person. Those guys weren't drinking enough.

MJuric

Nov 10, 08 10:16

Post #24 of 29 (168 views)

Re: AIG, their payoff, and now they party??? [fitzie] [In reply to]	Can't Post

I also heard, although have not confirmed, the "2 year loan pay back" was changed to "5 years".

Call me skeptical but it will then be changed to 10, 30...ahhh forget about it.

~Matt

jkca1

Nov 10, 08 11:05

Post #25 of 29 (146 views)

Re: AIG, their payoff, and now they party??? [jamma] [In reply to]	Can't Post

In Reply To

How is AIG still being funded by the government? This is a joke. They use taxpayer money to prop up these clowns and then they run up
nearly $500,000 for an executive retreat at a resort? The Govt should recall their loan, fine the pricks, and let the bastards sink into the
slop they created. Great to have oversight. This is just like giving money to a junkee to fund their habit. I also saw they were attempting to
sell off units of AIG to pay off this loan. Hmmm, maybe they should have done that before coming and asking for a payoff/bailout. And there's no
guarantee that the gov't will get the loan back. Insane.

http://consumerist.com/...ig-goes-on-vacation/

And you expected less from the bailout? Everyone that supported it/voted for it, where were the guarantees on HOW the money would be spent? It makes me sick to see my tax dollars being wasted. You just wait and see how much more of OUR money will get wasted.

"No one is remembered for the Novel they almost wrote."

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