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The message you send when you deny bonuses because other departments failed is simple promises don't mean shit even if thy are in a contract. how you figure that's going to go over with prospective and current employees?

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I'm simply saying before we demonize every AIG employee who got a bonus that we actually try to see which folks deserved the bonuses and which ones didn't.
and look beyond the first glance when doing it.

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ORIGINAL: Archer

The irony of Congress lecturing AIG about pay for performance when Congresses own performance has sucked so badly does not slip by me.

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ORIGINAL: Archer

Ah so we devolve into a nation ruled by the whim of the masses from a nation ruled by laws.

We allow the congress to pass a law specifically prohibited by the US constitution (article 1 section9) because it makes us feel good to punish the employees.
all without giving them any due process.

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ORIGINAL: Archer

The bonuses were in contracts that the employees had met the requirements of, that were written BEFORE the bailout.

If the employee does A,B,C,D then they will receive a bonus of X.

The Employee met the goals/ requirements in the contract to receive the bonuses, the bonuses are legally obligations of the company.

So those saying that they (the employees) post fact are trying to get around the new law are just ill informed, spouting off.

Passage of this bill may in fact violate the US Constitution under the  Post Facto law making and Bills of Attainder prohibitions.

The reason the (after Feb) date That Dodd has disowned from his amendment, was placed in the law to begin with is likely because some legal staffer was trying to avoid this constitutional law problem of passing retroactive punitive laws.

Many of the bonuses were paid as a retention bonus to retain the people who are the best informed and educated about the sub prime market problems.
The question is simple is it cheaper and more practical to pay bonuses to folks who know the problem well already or to lose them and hire in someone and have them take time to learn to that level? Which course of action is most likely to handle the problem as quickly as possible? WHich choice is likely to drag out the problem longer?

BTW nobody has examined the fact that some departments of AIG were actually profitable and had nothing to do with the sub prime problems that caused their insolvency. Do we really want to deny someone who works in another department entirely and had nothing to do with the sub prime real estate area of the company the bonuses they have earned?

When they start to divide out those that were involved in the bad decisions from those who were not then I'll start to think maybe they have gotten past the knee jerk reaction and started to actually look at fairness.

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ORIGINAL: Archer

Voiding a contract because the masses are upset at something they don't get is precisely mentioned and responded to from your post.

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ORIGINAL: Archer

Viable points to be considered, not based on emotional factors, refreshing.

I asked the question about which would be better keeping the experts or dragging it out with new people. and you went straight to that and I am not sure I disagree with your finding. I asked the question because it is at the heart of the matter of the bonuses in question.

Personally I think they should have three categories, those executives who warned about this and then followed orders after protesting, should be paid their bonuses and retained, those folks who were not really involved in the decision but are experts and followed the orders of the decision makers, retained for the most part paid their retention bonus, lastly those who made the decisions and actually brought on the problems not retained and thus not owed any further retention bonus. Bring in new smart folks to fill the ranks back in.

That way you keep some of the talented ones and replace the ones who need to be replaced. This could be handled outside of congress by the Government calling for a proxy vote of stock holders to elect new board of directors and working from the inside. I'm not sure why the Government has not appointed or legislated a stock holder's representative to the board of directors as part of the process this far.

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ORIGINAL: Honsoku

The "tax" is being imposed because AIG claims that they have to give that amount in bonuses because they are contractually obligated to do so (though that does beg the question; why the hell are the bonuses obligatory? Doesn't that defeat the point?).

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ORIGINAL: ThatDamnedPanda

If they don't like it, nationalize the goddamned company and feed every contract into the shredder. Start from scratch, and any employee who thinks they can do better someplace else is free to leave.

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ORIGINAL: Raiikun
I wonder if people are hung up on the word "Bonus"...but yah, bonuses being written into a contract are pretty common, and often considered part of the person's income.

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in another thread I mentioned a person who is very good at her job in bringing money into Bank of America, who in January alone met her quota for the whole quarter, who has a bonus in her contract for meeting her quotas, is considered an important part of her income and part of why she took the job, which bonuses could soon be taxed at 90%).

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ORIGINAL: Honsoku
Highly unlikely. Unless her family income is over $250,000/year, her bonus will be not be affected. If her income is that high, and they are filing jointly, that bonus would have been taxed at a 33% rate anyway. They could have just said they were tripling the tax rate on those bonuses, which would have meant the same thing and wouldn't have gotten people defensive about it.

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  Another part of the issue is that a lot of these aren't "performance" bonuses, but retention bonuses. People hear bonus and almost always think performance bonus, which is part of the immediate recoil to this. Instead, they were being paid for not quitting, which also seems a bit off.

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ORIGINAL: Raiikun

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ORIGINAL: Honsoku
Highly unlikely. Unless her family income is over $250,000/year, her bonus will be not be affected. If her income is that high, and they are filing jointly, that bonus would have been taxed at a 33% rate anyway. They could have just said they were tripling the tax rate on those bonuses, which would have meant the same thing and wouldn't have gotten people defensive about it.

Well as mentioned in the other thread, she worked for Bank of America, and was damned good at her job...and is married to a doctor which pushed their income over $250k, thus her bonuses would be subject to the punitive tax removing 25% more of her take-home income through no fault of her own.

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Another part of the issue is that a lot of these aren't "performance" bonuses, but retention bonuses. People hear bonus and almost always think performance bonus, which is part of the immediate recoil to this. Instead, they were being paid for not quitting, which also seems a bit off.

Would you feel any better then if instead of an 80k salary with 20k bonus, they just paid a 100k salary with no bonus? That would seemingly solve everyone's gripes. Or people could just realize that out of $170,000 million in bailout money given to AIG, $165 million of it was used to pay contractually obligated expenses that were components of their employees salaries.