AIG uses bailout money to pay employees.

[ASTalumna06]

Originally Posted by UGAalum94

I apologize for not knowing how the bonus structure worked.

It still doesn't seem unreasonable that someone with knowledge of how things worked in the field couldn't have attached stipulations to their receiving the money.

Maybe the companies could have renegotiated contracts with their employees. Surely the employees couldn't have expected the contracts to be honored in bankruptcy, and we're we lead to believe that was what was looming for them if they didn't get the money, right?

Maybe you are right and the employees could have sued for breach of contract, but it seems kind of unlikely under the circumstances.

ETA: who expects to keep drawing the same salary when the company is on the verge of going under?

The problem isn't with the COMPANY installing stipulations. The problem is with the GOVERNMENT implementing them. If they were to say, "We will bail you out, but none of this money may be used for paying bonuses or outrageous expenditures," then they would be limited in where the money could be spent.

You said, "Sure the employees couldn't have expected the contracts to be honored in bankruptcy..." But AIG never filed for bankruptcy. And you can't preemptively dismiss someone's contract because you MIGHT file for bankruptcy.

[UGAalum94]

Originally Posted by ASTalumna06

The problem isn't with the COMPANY installing stipulations. The problem is with the GOVERNMENT implementing them. If they were to say, "We will bail you out, but none of this money may be used for paying bonuses or outrageous expenditures," then they would be limited in where the money could be spent.

You said, "Sure the employees couldn't have expected the contracts to be honored in bankruptcy..." But AIG never filed for bankruptcy. And you can't preemptively dismiss someone's contract because you MIGHT file for bankruptcy.

It's too late now. I agree. My point in my most recent post was that it might have been possible for someone in the government to make the company agree to these terms before they authorized the bailout money. In turn, the company could have renegotiated with the employees.

I think you could probably compel people to accept a renegotiation of their contracts if they honestly believed that the company wouldn't get funding if the bonuses were still in the contracts and that without the funding, they'd go under. Sure, a couple of people might have insisted on the original contracts, but I'd feel better about the whole thing has it been attempted. (ETA: I'm laughing at my standard here. Guys, it's not about the national economy or government assistance to private incompetent industry. It's about my feelings. I think what I intend to imply is that I'd have greater faith in the government's ability to do a damn thing about the economy generally had they indicated more foresight about how the money would be spent, have they done a better job explaining standard payroll in this industry like you have, or had they just not given the companies the money.)

As someone who makes less than 100,000 dollars, I have a hard time understanding why anyone would get 600,000+ in additional pay called a "bonus" in a year when the company's performance sucked this bad.