you got it backwards on the retention bonus. In situations like these, employees are told that if they stay to date XX/XX/XXXX they will received a retention bonus of $XXX.
The fact that the retention bonus was paid out indicates that the employee was already retained for the period in question.

The real question is why do they need this level of retention bonus at all. There are plenty of out of work people in the finance industry and not a lot of places for people to go who have the unique skills of having created new financial products that brought the global economy to its knees. Great skills and all, but that was so five years ago!

People are not rioting in the streets yet. Therefore, they are not mad enough yet.

These guys will be on the beach in Aruba sipping mohitos by the time the FoxNews-watching mob finally gets fired up enough to do anything.

Malefactors of great wealth, anyone?

History repeats itself.

Ahhh, the Party of Responsibility (TM) again asserts that rich folks should have all the freedom with none of the responsibility.

You do not pay retention bonuses in the normal course of operations. They are designed to keep certain skill set available, usually when a company is purchased so that the purchasing company has the ability to make a smooth transformation of power and duties. They are paid at the end of the retention period dictated by a contract, both in date and in value.

Maybe Cuomo could ask to see the retention contracts.

The AIG bonus babies are just lucky we aren't like the Republicans. A few extraordinary renditions and enhanced interrogations and they would all be begging to give the bonuses back. After all, they do represent a bigger existential threat to our country than Sadam ever did.

I have no experience in the financial sector, but one thing that's been bothering me about this idea of keeping the people who are getting big bonuses around to fix the problems they caused: In my experience in corporate America, the big bonuses likely went to the top executives, not the lower-level employees. These executives were responsible for telling the lower level people to create the CDOs and CDSs that caused all the problems. If the goal is to untangle the mess, then the executives who said "make it so" aren't the ones who can do that --- in fact, they can and should be tossed out the nearest window. What you need are the people further down the org chart who actually did the work --- they would be in the best position to resolve the mess. But did these employees get huge bonuses too?

How long until we start hearing that not letting government-owned companies (which is what AIG is now) pay out multimillion dollar bonuses to people who lost billions of dollars for the company is "punishing success"?

Because, really, nothing says "success" like a global financial crisis that's causing government collapses and riots around the globe. Good job, AIG! Here's a couple million more for your terrific work in collapsing the entire financial system!

Yes, of course take names at AIG as Andrew (looks like a "people's man" AG) prepares to swing some punches - yet just remember also, that's the way most big corporations behave. We have to think about the big picture and not just, AIG shouldn't get away with misbehaving and sharp practice "just" because they are now supported/supervised/majority-owned by our Government.

Who owns this cock up?

NYT:

A.I.G. executives said they would never have proceeded with the bonus payments before getting approval from the Treasury and the Federal Reserve.

“We would never make any important business decisions without discussing them with our government managers and owners,� said one executive, who did not want to be identified because of the sensitivity of the matter.

The tangle over bonuses highlighted a broader confusion over who actually controls the insurance conglomerate. The Treasury and the Federal Reserve have both pumped vast amounts of money into the company, but the two agencies have never made it clear which of them is in charge.

Both agencies have insisted that neither of them “owns� A.I.G., or controls its management decisions, even though the federal government owns almost 80 percent of the company. As a result, the Treasury and Fed officials have repeatedly resisted forcing the company to disclose more about how A.I.G. was spending taxpayer money.

Jesus but that is bad government work...

Could at least some the bonuses be nothing less than hush money? Perhaps some of the "lost" billions ended up in the pockets of crooks, and the pay outs were made to insure that people kept their mouths shut. It sounds far fetched, I know, but it wouldn't surprise me a bit if it proved true.

A.I.G. altered some of its practices last fall after discussions with Mr. Cuomo. The company canceled about $160 million in planned expenses for conferences as well as $600 million in payouts in deferred compensation plans after Mr. Cuomo threatened to sue the company. - NYT first link in the post.

Something sure is missing. Were these bonuses pre-approved back then? Were they hidden?

Kudos to Sen Kyl (R-AIG) - protect the private sector from President Hussein's blatant socialism!!!

Paging John Galt...Mr Galt, you have a phone call.

The problem was that we gave away money without enough control on how it was to be used. A special tax on individuals or a specific company would be tantamont to a bill of attainder and probably unconstitutional. There's also a problem passing ex post facto legislation to impose penalties on behavior that was previously legal.

One solution would be to post, on the white house blog, google streetview photos of the mansions and penthouses owned by these leeches, with public records of their compensation levels and new bonuses (comp levels should be public now that "we" own AIG). They have given up their right to anonymity and deserve to be publically excoriated. Shame these leeches into doing disgorging their ill-gotten gains. Once people start gathering at their doorsteps or writing the local paper to call them out, they may find the millions aren't worth the bad press.

If these folks took the money and ran, doesn't it defeat the purpose of a "retention" payment?

Folks, you have it all wrong. These are "rendition" payments.

"Could at least some the bonuses be nothing less than hush money?"

I think the reality is that it is both more and less than that.

It is the executive class taking their due.

The people in treasury and the federal reserve are part of the executive class just like the leaders of AIG and the people receiving these bonuses. As the years go on today's giver's will find themselves wanting some cash and they will turn to the people they made sure were paid Friday for their next consulting fee, board appointment, compensation committee member, etc.

"Sen. Jon Kyl (R-Ariz.), the second highest ranking Republican in the chamber, started pushing back in the other direction this morning, accusing politicians of being quick to "demagogue" the AIG issue. Some far-right blogs are also, oddly enough, offering tacit defenses of AIG."

FYI, they got their marching orders from Limbaugh, who defended the bonuses on the air yesterday.

Cuomo says "WHAT?????"

I think the payouts are a combination of hush money and down payment for their legal defense fund.

Can't we just kill them, or coerce them into killing themselves?

The word "bonus" makes everyone angry. One normally thinks of "bonus" as a supplementary payment for successful performance. By this definition, no profit, can't be a bonus. But the word is being used more expansively- the "retention" payments seem to be an amount promised to be paid at the end of a period if you work for the period. I can understand why such a payment (set aside the issue of magnitude) may be necessary even if the company is losing money- that is you may have to pay people to minimize the loss.
I've read statements that say "bonus" payable regardless of performance, it is virtually part of regular salary. This is the part that is mystifying to me- is compensation structured this may for some tax advantage either in US or in UK? This is the way the media seems to be characterizing the AIG bonuses- and it is perplexing- if salary why call it a "bonus"?

Apparently many of the recipients are in UK. Perhaps, the UK govt would cooperate by taxing away the "filthy lucre".

I understand why the whole of AIG cannot be allowed to fail, but what of this particular subsidiary? why not let it fail- either immediately or as of some date- (April 1 seems fitting).

There is so much mystery. I suspect if we knew, it would turn out to actually be simple to fashion an appropriate remedy- just not much fun for AIG.

"Sen. Jon Kyl (R-Ariz.), the second highest ranking Republican in the chamber, started pushing back in the other direction this morning, accusing politicians of being quick to "demagogue" the AIG issue. Some far-right blogs are also, oddly enough, offering tacit defenses of AIG."

FYI, they got their marching orders from Limbaugh, who defended the bonuses on the air yesterday.

Rush Limbaugh is a spokesperson (person?) for the extreme wealthy class.

Thanks for the heads up, CJ.

Want them to give it back?

1. Publish the names, addresses, and amount of bonus received.
2. ?????
3. Profit.

The dems are in a fight with JP Morgan, who now they have bailout money are going to invest $400 million in outsourcing jobs to India.

I'm usually not given to project foul language, but this AIG story deserves the following questions:

Who the fuck do these execs. think they are to take money for failure? What the fuck do these same people do to make themselves right with the human race? Why the fuck wouldn't I spit on each and everyone of them when given the chance? Where can I get a list of these fuckers? And, How can I make sure these fuckers won't do this fucking thing to us again?

Get the picture AIG execs? We, and I mean the we that carries the weight of a majority of the hoi polloi, are not satisfied with your smarmy attitudes and no-holds-barred raping of our economy. I mean this in only a metaphoric sense, but we would now like to hunt these execs down and put them down for the sake of our beloved nation! -Kevo

FYI, they got their marching orders from Limbaugh, who defended the bonuses on the air yesterday.

What was his defense?

http://www.atlargely.com/2009/03/aig-bcci.html

While the torches and pitchforks energy regarding recipients of bonuses is seductive, there is something troubling to me about the concept of Congress passing a special tax on a particular company, any company. Although I have exceptions, such as "clean-up" taxes for companies who, say, build faulty ash ponds that break and lay waste to thousands of acres of land.

AIG is contractionaly obligated to provide some (possibly all) of the moneys it is paying out. At the time of the TRAP II payments Senator Dodd (D-Connecticut) put in an amendment that effectively OK'd this type payment if the contract pre-dated Feb 2009.

My question is why do people who are considered intelligent business men, deem it necessary to pay large sums of money to hold onto certain key personnel during troubled times? Once its public, who cares if you high paid CFO abandons ship?

1. Demagoguery is right, and bipartisan too.

2. What exactly is "voluntarily" in "give the bonus back voluntarily or we'll pass a law and tax it at 90%+"?

3. Some scheme like this (90% tax to confiscate the bonus) seems like the functional equivalent of a "bill of attainder" Of course the fact that this is prohibited by the constitution won't stop these dumb-ass Senators from carrying through with their plan.(Constitution of the United States, Article I, Section 9, paragraph 3)

I like the solution proposed by commenter EJ, reported by Glenn Greenwald at salon.com, to enable AIG to not give the bonuses:

"Couldn't Congress just give poor, well-meaning AIG immunity from lawsuits?"

Greenwald notes that Obama has experience with this sort of immunity from lawsuits for telecoms who illegally spied on customers.

"recipients of those bonuses will not be able to keep all their money --"

What does he mean "their" money? It certainly looks to me as though it's *our* money.

I'm with doubtful.. publish their names and addresses. We knew all the criminals in Saddam's regime - if you are responsible for almost bringing the world to its knees financially, your name should be known. Maybe put them on trading cards like they did with Saddam's regime..

Tim Geitner is a douchebag.. has he no clue? What world is he living in??

Well, here's a start..

AIG Names