For most of these guys, they are only paid a small percentage of their annual salary as regular income. This is done for the ease of bookkeeping and tax reporting. The "bonus" portion is actually more like a 1099 that an Average Joe independent contractor gets. Kind of like a plumber on a large hotel project.
The regular income for these guys is usually only around $300K to $400K per year, and the balance is paid all at once at the end of the year.
Another thing that most people don't understand is that these AIG Traders are used to getting much more. The AIG guys that got $1 Million bonuses are used to getting more like $10 Million or $20 Million bonuses. So this is a serious reduction in their income.
And the last thing is that these guys worked the desks during the toughest time in AIG's history. Over the last year, some of these guys were in the office 9 or 10 hours a day! There is no 9 to 5 on Wall Street, especially when the financial markets of the world are collapsing. They even had to come in on the weekends, especially on the weekends before each of the bailouts. They had to get all their papers photocopied and three-hole punched.
So if you find yourself wishing they would just commit some sort of Asian suicide ritual, just remember, they have mothers and fathers, sons and daughters, just like you do. And their families count on them for the money they need to go on vacation every month, just like yours do.
And lastly, remember that there are two sides to every story. There is the truth that you are told, and then there is the truth that someone else might tell you. So don't always judge a story based on only one truth. An honest day's pay for an honest day's work, right? That's what it's all about. And look how they worked. They were practically penned up like children in a Chinese sweat shop. How can you put a price on that? And how can you put a price on the humiliation they have suffered for the past six months? How about cutting these guys some slack? After all, it's not like they destroyed the world or anything.
Click to enlarge
(Photo is not actually AIG in order to protect the innocent)
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FLASHBACK (October 7)
9 comments:
Well, there is some truth in that statement. On the other hand the AIG employees did blow up big time, as was convicingly proven by the required bailouts.
If I start my own company it doesn't matter how much time I put in and how dynamic my market is: if I fail to generate a profit I will earn no money in return for the time sacrificed. The same holds for the AIG employees: the chose to work for a company they should/could have figured out was not doing ok. The effort they have invested has not turned out to bring anybody any good, hence has no value and should not be rewarded.
It's becoming clear to me that this brouhaha and outrage over the employee bonuses is merely a smokescreen designed to protect the bigger scam...the counterparties who were the recipients of the bailout...and whose names were only revealed last weekend....
Instead of the outrage over these counterparties, big banks..the media is now downplaying those revelations and instead highlighting the paltry employee bonuses! The situation is really hopeless now....the rout of the ordinary people complete.
jcortez is honing in on the real stinking fish. AIG gets "bailed out" with taxpayer debt, and turns around and writes a 10 figure check to Goldman Sachs. Now who is living large on the taxslave's dime?
jcortez,
Good point. Like the 70 billion in executive bonuses last year may have been a smokescreen to cover for the 600 billion those same executives paid themselves over the past few years. Do something so outrageous that it will draw the ire of the people and then we can just give it back and they won't notice we kept the rest. Only in this case they are throwing the employees to the wolves to save the big banks.
I agree. I guess I too fell victim to this deceit by poking fun at the easy target.
Martijn,
Welcome! In a fair market AIG would have been dissolved halfway through last year, if not earlier. So those employees were lucky to be working at all. It is pretty indefensible that they should all make full compensation in a year when so many Americans became unemployed. And especially when you consider the size of those compensations, and where the money came from.
And don't forget the big AIG retreat they took in Dana Point, California right after the first big bailout. I grew up near Dana Point. It's very nice and expensive down there. There is definitely something wrong with this AIG picture.
And according to many sources, AIG is the biggest player in the OTC derivatives/CDS game which is bringing down the house. So, as if it wasn't bad enough that the US Taxpayer is covering their gambling losses, we are also paying multi-million dollar salaries to the gamblers themselves for doing the job of delivering our money to their bookies. What a scam.
Anyway, I thought that no one was sticking up for these poor guys after I read Denninger yesterday. (LOL). So there you go.
FOFOA
I swear I wrote this before I read what you said in your last comment on the argentina post
http://ispeakofpeak.blogspot.com/2009/03/ben-trekdegeneration-next.html
Captain Ben " Helm....Set a course for Zimbabwe...Maximum Monetization....Engage".
You should see this.
http://www.financialsense.com/fsu/editorials/amerman/2009/0212.html
and part 2 posted today
http://www.financialsense.com/fsu/editorials/amerman/2009/0318.html
Thanks Mad,
Somewhere on this blog I linked that part 1 when it first came out. Great article. I've been waiting for part 2. Will read it tonight or tomorrow.
You should look at this. Jim Willie thinks that what Ben announced today has actually been going on covertly for quite a while (through freshly printed money going to offshore accounts under the disguise of hedge funds and Arab sovereign funds and purchasing Tbills to paint a picture they want painted). I tend to agree. It makes sense both logically and through empirical evidence. The only way it doesn't make sense is if you have faith that Bernanke and Paulson would not break the rules. (Yeah, right!) This would make today more of a coming out party than something new entirely.
Of course the inflationary implications are huge.
FOFOA
I just had to post this link. It's a very short but important read, from Porter Stansberry:
Paulson is either stupid or criminal, Pt. 2
Another good AIG article. This one from William Engdahl.
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