The march towards socialism, or at least facism, conitinues. I am not sure why they would stop at financial institutions. Poor judgement on the part of investors could also cause failures in other enterprises where salaries are just as high, if not higher.
Paying an actor too much for a shitty proformance could certainly effect the profitablity of a movie. These investors must be protected as well.
We don't have to worry about the heath care industry, they will be delt with shortly.
What about spending too much on an athelete that doesn't perform? That could cost the team dearly and may even force the sale or take the team away from the fans in a particular city. Certainly they (fans and community) have investments in the stadium, surrounding businesses, etc that need to be protected.
I think we can make a case that investors in any company should be protected by the SEC. They are certainly in a better possition to set salaries and protect us all from mal investment. The fed sure is helping us out on our gold investments.
This is also a perfect tactic to insure companies seized with tax payer money remain competitive. If tax payers are going to demand lower salaries for executives in gov't owned companies, it only makes sense that you would also want to limit the salaries of the competition. Maybe we should just force the unionization of all executives? That would certainly be much more effective in structuring salaries. I think I'll go ahead and trade mark the United Financial Executives now.
What, exactly, is wrong with restricting a company, whether a financial institution, auto maker, vacuum repair shop or actors and athletes, that accepts public bailout funds from giving a big chunk of that money to it's executives?
Your argument seems to be that anyone can go to the government and ask for a bailout, even if the purpose of the funds is to make the boss's payroll. Bullshit. That isn't socialism, it's just plain common sense.
"Dear Uncle Sam, we need $2 billion in order to remain viable. By the way, the executive compensation committee says that I get $750 million this year. Have a nice day."
It is with deep regret that I submit my notice of resignation from A.I.G. Financial Products. I hope you take the time to read this entire letter. Before describing the details of my decision, I want to offer some context:
I am proud of everything I have done for the commodity and equity divisions of A.I.G.-F.P. I was in no way involved in Ã¢?? or responsible for Ã¢?? the credit default swap transactions that have hamstrung A.I.G. Nor were more than a handful of the 400 current employees of A.I.G.-F.P. Most of those responsible have left the company and have conspicuously escaped the public outrage.
After 12 months of hard work dismantling the company Ã¢?? during which A.I.G. reassured us many times we would be rewarded in March 2009 Ã¢?? we in the financial products unit have been betrayed by A.I.G. and are being unfairly persecuted by elected officials. In response to this, I will now leave the company and donate my entire post-tax retention payment to those suffering from the global economic downturn. My intent is to keep none of the money myself.
I take this action after 11 years of dedicated, honorable service to A.I.G. I can no longer effectively perform my duties in this dysfunctional environment, nor am I being paid to do so. Like you, I was asked to work for an annual salary of $1, and I agreed out of a sense of duty to the company and to the public officials who have come to its aid. Having now been let down by both, I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.
You and I have never met or spoken to each other, so IÃ¢??d like to tell you about myself. I was raised by schoolteachers working multiple jobs in a world of closing steel mills. My hard work earned me acceptance to M.I.T., and the instituteÃ¢??s generous financial aid enabled me to attend. I had fulfilled my American dream.
I started at this company in 1998 as an equity trader, became the head of equity and commodity trading and, a couple of years before A.I.G.Ã¢??s meltdown last September, was named the head of business development for commodities. Over this period the equity and commodity units were consistently profitable Ã¢?? in most years generating net profits of well over $100 million. Most recently, during the dismantling of A.I.G.-F.P., I was an integral player in the pending sale of its well-regarded commodity index business to UBS. As you know, business unit sales like this are crucial to A.I.G.Ã¢??s effort to repay the American taxpayer.
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 Ã¢?? directly as well as indirectly with the rest of the taxpayers.
I have the utmost respect for the civic duty that you are now performing at A.I.G. You are as blameless for these credit default swap losses as I am. You answered your countryÃ¢??s call and you are taking a tremendous beating for it.
But you also are aware that most of the employees of your financial products unit had nothing to do with the large losses. And I am disappointed and frustrated over your lack of support for us. I and many others in the unit feel betrayed that you failed to stand up for us in the face of untrue and unfair accusations from certain members of Congress last Wednesday and from the press over our retention payments, and that you didnÃ¢??t defend us against the baseless and reckless comments made by the attorneys general of New York and Connecticut.
My guess is that in October, when you learned of these retention contracts, you realized that the employees of the financial products unit needed some incentive to stay and that the contracts, being both ethical and useful, should be left to stand. ThatÃ¢??s probably why A.I.G. management assured us on three occasions during that month that the company would Ã¢??live up to its commitmentÃ¢?? to honor the contract guarantees.
That may be why you decided to accelerate by three months more than a quarter of the amounts due under the contracts. That action signified to us your support, and was hardly something that one would do if he truly found the contracts Ã¢??distasteful.Ã¢??
That may also be why you authorized the balance of the payments on March 13.
At no time during the past six months that you have been leading A.I.G. did you ask us to revise, renegotiate or break these contracts Ã¢?? until several hours before your appearance last week before Congress.
I think your initial decision to honor the contracts was both ethical and financially astute, but it seems to have been politically unwise. ItÃ¢??s now apparent that you either misunderstood the agreements that you had made Ã¢?? tacit or otherwise Ã¢?? with the Federal Reserve, the Treasury, various members of Congress and Attorney General Andrew Cuomo of New York, or were not strong enough to withstand the shifting political winds.
YouÃ¢??ve now asked the current employees of A.I.G.-F.P. to repay these earnings. As you can imagine, there has been a tremendous amount of serious thought and heated discussion about how we should respond to this breach of trust.
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.Ã¢??s assurances that the contracts would be honored. They are now angry about having been misled by A.I.G.Ã¢??s promises and are not inclined to return the money as a favor to you.
The only real motivation that anyone at A.I.G.-F.P. now has is fear. Mr. Cuomo has threatened to Ã¢??name and shame,Ã¢?? and his counterpart in Connecticut, Richard Blumenthal, has made similar threats Ã¢?? even though attorneys general are supposed to stand for due process, to conduct trials in courts and not the press.
So what am I to do? ThereÃ¢??s no easy answer. I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldnÃ¢??t disagree.
That is why I have decided to donate 100 percent of the effective after-tax proceeds of my retention payment directly to organizations that are helping people who are suffering from the global downturn. This is not a tax-deduction gimmick; I simply believe that I at least deserve to dictate how my earnings are spent, and do not want to see them disappear back into the obscurity of A.I.G.Ã¢??s or the federal governmentÃ¢??s budget. Our earnings have caused such a distraction for so many from the more pressing issues our country faces, and I would like to see my share of it benefit those truly in need.
On March 16 I received a payment from A.I.G. amounting to $742,006.40, after taxes. In light of the uncertainty over the ultimate taxation and legal status of this payment, the actual amount I donate may be less Ã¢?? in fact, it may end up being far less if the recent House bill raising the tax on the retention payments to 90 percent stands. Once all the money is donated, you will immediately receive a list of all recipients.
This choice is right for me. I wish others at A.I.G.-F.P. luck finding peace with their difficult decision, and only hope their judgment is not clouded by fear.
Mr. Liddy, I wish you success in your commitment to return the money extended by the American government, and luck with the continued unwinding of the companyÃ¢??s diverse businesses Ã¢?? especially those remaining credit default swaps. IÃ¢??ll continue over the short term to help make sure no balls are dropped, but after whatÃ¢??s happened this past week I canÃ¢??t remain much longer Ã¢?? there is too much bad blood. IÃ¢??m not sure how you will greet my resignation, but at least Attorney General Blumenthal should be relieved that IÃ¢??ll leave under my own power and will not need to be Ã¢??shoved out the door.Ã¢??
He said he was asked to work for 1 dollar a year by his companey. From that article it doesnt say his salary was capped. The govn't didnt ask people to reduce their salaries, they forced it.
He may not have been doing the credit default swaps personally, but he and rest of his companey certainly werent too concered as long as the huge money was flowing in.
As said before, when you make a deal with the devil, its never on your terms.
None of these comapnies were forced at gun point to take funds. They could have said no.
They failed to rout out their own cancer, of course they'll cry that it wasn't thier fault so they can keep thier salary.
Thier salary is paid out by the government, those who pay out the salary decide the wages they will offer, thats how it works. If the companies tanks when people leave, so be it, it was going to tank anways.
I believe the bail outs were a complete waste, the govn't needed to let things reset, sure it would have sucked harder, but in the long run its healthier.
But all these government employees at AIG and elswhere need to sack up or leave. They went for the carrot but they still go the stick. That is thier own fault.
Since the people who earn those salaries either were lucky to inherit intelligence or money, they didn't really earn those salaries. They were just lucky. So, since it was just a matter of luck, they have to understand that they can't keep all the good things in life. They have to share, even if they don't want to! We the People have a big club full of thugs (IRS agents) and we will force those lucky greedy thieves to be moral and surrender their money!
that doesn't change that their boss is the US government now. And from your article is does not sound like his 1 dollar a year salary was handed down by the govn't, i never saw any details in the bailouts about people making one dollar a year. It sounds like an agreement with his own company. But i certainly could be wrong, i just haven't seen it.
they're not all that talented, they and the rest of these institutions were warned by plenty of people that their practices were going to collapse sometime, but they were too greedy.
First, yes, some companies were FORCED to take money, not all had a choice. They may not even let them pay it back to get out from under the government. So some may be both forced to take and to keep the money. THEY WERE NOT ALLOWED TO SAY NO.
Second, the guy in question was in an unrelated part of the company that apparently has always done and continues to do well and profit the company honestly.
Third, many of these individuals are under contract for salary and bonuses. They are breaking contracts.
I am so surprised that the Wall Street Journal is complaining about the looming regulations, it was they who were not happy with the astronomical profits that they made. That is why Obama is going to limit wages and bonuses. We allow banks to loan $10 for every $1 that they have in deposits, I do not believe there is one bank that pays their depositor more than %5. Even at conventional loan rates I have heard of %30 interest rates that they charge people to barrow the money. What is wrong with these companies? It is simple they are robbing the banks with their Wages and bonuses to our detriment. Theses are public companies; it is not like they have a boss.
Then they have this right wing faction that is doing their bidding, acting like we are losing liberties that we have lost many decades before. This is why I think Republicans are retarded. They do not even act in their best interest. They cling to this free market rhetoric like it was written in the bible at the same time acting intellectually superior.
Not a Republican, but really your post, where you throw around the word "retarded" for others while stating the things you do, is just too much to let pass.
Are you actually unaware that when borrowing money, a borrower is not forced to pick a particular lender? Let alone forced to take the loan?
If he is paying for example 30%, it is because:
1) He is voluntarily agreeing to pay it (or perhaps is so damn stupid that even though the APR is plainly listed he doesn't have a clue that high interest involved, but if so that is his fault), and
2) He has cheated others by borrowing from them and not repaying, and therefore has a truly crappy credit rating.
Somehow you analyze this as the person being "robbed" !
Do you know what "robbed" means?
You are aware that a further part of the reason he cannot obtain a loan, in this case, at less than 30% is because there is a competitive market of lenders each seeking to obtain business by offering the most attractive deal possible that they are still confident on, on average, making money?
You find something wrong with this?
You are aware that in fact very many credit card companies and divisions are losing money despite these high rates due to the deadbeats such as the one you're so outraged "has" to pay 30% to get any credit at all? ("Has" being in quotes because no one is forcing him to take the loan.)
You are aware that banks are private companies?
You are aware that anyone who meets given requirements can start their own bank? There are such things as local banks started by local people.
You do know that larger banks are owned by shareholders, who either voluntarily choose to buy the stock as personal direct decision or do so as a result of voluntarily empowering another person to make the decision for them. These shareholders voluntarily choose to have the directors be the authority over the company, and (if choosing to have voting stock) vote on the directors.
Your idea that no one is "boss" of these companies (or has the right to be, except Obama of course, not exactly sure just what your attempted point was) is just beyond belief.
Really, where do you get off calling others "retarded"? If nothing else surely that is not constructive commentary?
I am sorry the word RETARTED offended you Mr. Roberts. I do not know what else to call it when some one does not act in their own best interest
I hope you are not thinking I am complaining that the banks are fucking (hope that does not offend you) the people, which they are and that is not even my point. My point is we allow them to lend $10 for every $1 deposit they only have to pay the original depositor %5 even if they could charge no more than %5 interest on the money they loan. There profit before overhead should be %50 of the original deposit
All the bank is supposed to do is take deposits lend the money make a profit split with the depositor and everybody made money and every body is happyâ??
Robbing in my own words is taking what is not rightfully yours
These wages are so high, and the only ones that could change it are getting inflated wages also
I am pretty sure you work for T.C., if T.C. were like I, he would pay you wages that are comparable to what other people in your field should make. But in corporate America, where the boss is spending somebody elseâ??s money, the first priority of the game is what goes in my pocket and not what does the bottom line say.
I will not argue about a 30 percent loan, it should be a crime, we are allowed to disagree on this point... But I do not know the last loan you had but there are so many fees and closing costs that some how are not considered interest, this should be drawn in and factored in as interest
I personally do not know of one bank that is not a public corp.I could be wrong though.
The average stock holder does not know how, or even what their best vote should be for their best interest. And that is exactly how these public companies want it
Again I apologize if the word retarded offended you, if I know you are reading certain thread I will not use it, but personally I think you should develop a little thicker skin.