AIG Screws America
Dear editor:
In my business experience over the years, with both large and small companies, end of the year bonuses were something that everyone looked forward to. It was something that all employees hoped the company would be in a position to reward those people who were, in one way or the other, responsible for the financial health and continued prosperity of the company that occurred that past year. There was never a guarantee that bonuses would be paid and everyone knew that. After all, this was something employees and the company had to earn each and every year.
Normally, prior to the granting of these rewards a number of conditions had to first be satisfied. First, the company had to have been profitable during the past year. Second, the business needed to show growth for the period in question. Third, there had to be funds available for the rewarding of bonuses that did not affect the company’s need for cash in the future. Fourth, the bonuses were given in recognition to those who were responsible for the increased financial and business health and growth of the company during the past year. Fifth, the granting of bonuses would be good for the owners (or shareholders) and the future success of the corporation. Sixth, it would be a good way to retain excellent employees.
With these six prerequisites in mind we can now consider the bonuses of $165 million recently paid to the executives of AIG. None of the six have been met.
First, the company has been nowhere close to profitable and stands no chance whatsoever to be so in the near future. Second, there has been no growth in the company at all. Third, cash availability doesn’t exist except for the billions in taxpayers’ money that was needed to save the corporation. In fact there is doubt that enough cash exists without additional government bailout in the future. Fourth, since there has been no increased financial and business health and growth of the company, why should anyone be rewarded? In fact, the people receiving these toxic bonuses are the very people who almost bankrupted AIG, and had a major hand in the current worldwide financial crisis. They need rewarding? Fifth, how will giving away taxpayer money to scheming incompetents be good for the owners (80% American taxpayers)? Sixth, retention? According to New York Attorney General Mario Cuomo fifty-two of the executives receiving this largess have already left AIG. And good riddance.
It would seem that the federal government needs to do something about this abuse of “our” money. After all, we, the American taxpayers, are the majority stockholders (80%) of AIG. If we can’t get the money back after the fact then maybe we should consider taxing individual bonuses received from bailout assisted companies at a 75% rate. That should put a little vinegar in their scheming sugar.
In my business experience over the years, with both large and small companies, end of the year bonuses were something that everyone looked forward to. It was something that all employees hoped the company would be in a position to reward those people who were, in one way or the other, responsible for the financial health and continued prosperity of the company that occurred that past year. There was never a guarantee that bonuses would be paid and everyone knew that. After all, this was something employees and the company had to earn each and every year.
Normally, prior to the granting of these rewards a number of conditions had to first be satisfied. First, the company had to have been profitable during the past year. Second, the business needed to show growth for the period in question. Third, there had to be funds available for the rewarding of bonuses that did not affect the company’s need for cash in the future. Fourth, the bonuses were given in recognition to those who were responsible for the increased financial and business health and growth of the company during the past year. Fifth, the granting of bonuses would be good for the owners (or shareholders) and the future success of the corporation. Sixth, it would be a good way to retain excellent employees.
With these six prerequisites in mind we can now consider the bonuses of $165 million recently paid to the executives of AIG. None of the six have been met.
First, the company has been nowhere close to profitable and stands no chance whatsoever to be so in the near future. Second, there has been no growth in the company at all. Third, cash availability doesn’t exist except for the billions in taxpayers’ money that was needed to save the corporation. In fact there is doubt that enough cash exists without additional government bailout in the future. Fourth, since there has been no increased financial and business health and growth of the company, why should anyone be rewarded? In fact, the people receiving these toxic bonuses are the very people who almost bankrupted AIG, and had a major hand in the current worldwide financial crisis. They need rewarding? Fifth, how will giving away taxpayer money to scheming incompetents be good for the owners (80% American taxpayers)? Sixth, retention? According to New York Attorney General Mario Cuomo fifty-two of the executives receiving this largess have already left AIG. And good riddance.
It would seem that the federal government needs to do something about this abuse of “our” money. After all, we, the American taxpayers, are the majority stockholders (80%) of AIG. If we can’t get the money back after the fact then maybe we should consider taxing individual bonuses received from bailout assisted companies at a 75% rate. That should put a little vinegar in their scheming sugar.
posted by Sam Schoolsky | 7:25 AM
0 Comments:
Post a Comment
<< Home