AIG bonus outrage has employees living in fear

[disneysteve]

the only thing that sucks is that if they don't give them the bonus that can just sue them later because it is a bindding contract.

Why is that bad? Do you think your employer should not be legally obligated to observe the conditions in your employment contract? Do we really want to start making employment contracts just suggestions of what might happen?

[financialnut]

I would be livid if I were one of these guys NOT getting what was due to me. If you contract with somebody, you better pay up. The government got involved and seemed to "overlook" those contracts.

If you're going to purchase 80% of a company, you better know what's going on. And if there are contracts in place already, do something about it before you buy.

You bought those contracts. You better honor them.

I think it's unfair. That's what the government gets (and us as taxpayers) when you hurry something like buying AIG.

[cptacek]

The government got involved and seemed to "overlook" those contracts.

Wrong. The government got involved and specifically put in the stimulus package that these contracts would be honored.

Senate Banking committee Chairman Christopher Dodd told CNN Wednesday that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.

Source: Dodd: Administration pushed for language protecting bonuses - CNN.com

[EEinNJ]

Contracts get re-negotiated unilaterally all the time. Companies change health insurers, or raise your contribution. They might stop contributing to your 401K. You took the job with one deal, and they changed it. Oh Well, so quit. How about utilities, like cable companies changing your rates or channel line-up, or power company rates. They don't ask you, they ask the Government-why? Because they are REGULATED- (and you are nobody).

[disneysteve]

Contracts get re-negotiated unilaterally all the time. Companies change health insurers, or raise your contribution. They might stop contributing to your 401K. You took the job with one deal, and they changed it. Oh Well, so quit. How about utilities, like cable companies changing your rates or channel line-up, or power company rates. They don't ask you, they ask the Government-why? Because they are REGULATED- (and you are nobody).

The examples you are giving are totally different. Those are not contracted services. Those services are "at-will" and can be changed at any time.

A more accurate comparison might be my cell phone. I DO have a 2-year service contract that spells out in great detail what I will pay each month and what services I will receive in return. The phone company can not come back to me after 6 or 9 months and say they are going to hike the rate for the remainder of the contract term or that they are going to cut back how many minutes I get each month. Why? BECAUSE I HAVE A CONTRACT and they are legally obligated to honor the terms of that contract.

I am not currently a contracted employee, but I have been in the past (as I mentioned earlier). Before taking that job, I was presented with the employment contract. My attorney reviewed it and made changes and it went back and forth a couple of times between the employer and the attorney until everyone was in agreement on the terms. Once that contract was signed, I fully expected every single line of it to be honored as stated. If the employer failed to hold up his end of the agreement, I can assure you that my attorney would have been right on top of it.

You seem to be suggesting (and please correct me if I'm misreading your comments) that an employment contract is really not a contract at all and the employer can decide to change the terms unilaterally without the agreement of the employee. That most certainly is not true, nor should it be.

[PetMom]

This company gave out huge bonuses at a time when the economy is forcing many companies/cities are haivng to restyle their benefits and programs.

The auto workers have had their contracts renegotiated, people have had their 401K's not matched up by their employers. Some cities are telling their workers they are getting days off without pay. Some are getting less medical benefits. I assume some of these benefits started off in an employment contractural arrangement.

Desperate measures for desperate times that many Americans are having to accept when cost of living is going up.

And then here we sit and this windfall of bascially our tax dollars to be paid for by us who are already making concessions, just watching dollars being wheelbarrowed in for these fat cats.

Small wonder people got so mad.

Sure there may be some reasonable facts that the public may not be calmed enough to look at and put in perspective - but that just did not
happen. Too much anger.

The ones who gave back their bonuses did the right thing and might have calmed some of the angry people.

AIG did not do any good PR with this whole thing except the guy who will work all year for a dollar - now that is impressive.

[PetMom]

Make no mistake about it: AIG would have sued to get their bonuses because it was a contract (a clause left in by Dodd). This would have cost the US (or us the taxpayers) millions of our money to defend ourselves with a company which we have majority ownership.

Their slick lawyers would have had that tied up for a while.

Seems we got some quicker results by the strong public outrage. People have just had enough of this nonsense.

And another point, last holiday season I know of many people who did not get their bonuses at all. Not even a fruit basket.

[PetMom]

Mom in Missouri: you might want to get a consumer reporter aware of what AIG is doing to you and some others - this is obviously not the result of one mistake that you keep trying to clear up.

AIG is in the news and some consumer reporter might be interested. Couldn't hurt and they are cheaper than attorneys.
Most newspapers and local tv. stations have a consumer reporter.

[wnlbutterfly]

My thoughts were with regulation. How did they "get to big to fail" happen? Aren't there suppose to be regulations in place so this doesn't happen? Everytime you hear about mergers and such, they have to jump through hoops due to regulations.

Banks have basically done the same thing. They seem so focused on buying more banks and merging then serving the customers. Yet the cost of services keep going up, not down as they get bigger. My small town bank got bought out this year....and my other bank has been "seized" and will become another bank. I have seen so many banks here change names so many times I have lost count and can't remember what the name is "today" of the bank. And I am not an old-timer either, just been here in this town 20 yrs.

Bigger isn't always better. Especially for the little people!

Thanks DisneySteve for putting it into perspective on the "bonuses". I think they should have just kept mum about it or written it as "employee wages" because that is what it is with some of these contracts. I think the media distorted it and made it look as if all those fat cats were the ones walking away with the money, and to the average person...that is a lot of money.