Bonuses for bailed out companies Options

[dauss]

So, I'm trying to think of an example that would be close to the situation that AIG is facing to get a gauge on this particular situation.

Let's pretend that Brinker International Restaurants(Chili's, Maggiano's, On the Border, and Romano's Macaroni Grill) got a bailout with your tax dollars because they're in financial trouble. So, let's also pretend that one of their concepts was the main cause for all their profit loss, On the Border in this hypothetical case. So, On the Border has such massive losses that it causes Brinker to have to report a loss for the fiscal year.

Now, let's just say that you work for Chili's and don't really have any connection to On the Border because that's a different division. You've been doing your job and Chili's, Romano's, and Maggiano's not only made budget, but actually had profit for the last year. Should you get bonus, along with the guys from Romano's and Maggiano's?

[impala454]

Except that paying you $10 million isn't part of a contract for a business the government is trying to keep afloat.

You are dead on on why people are ticked, and was exactly the point I made in the other thread. Because people are "living large". It's all about perspective, and you and everyone else who's ticked fails to see it in perspective. You just see the word "millions" and "executives" and draw your own conclusions based on your decidedly non-millions non-executive lifestyle. All you see is someone doing better than you and you feel that knocking them down to your level is the only solution.

The bottom line is, you have no idea how this business is run, you have no idea who the people receiving the bonuses are, and you have no idea about their job performance, or what their contracts entitle them to. So bitching about it is stupid.

Lastly, understand the concept of how business people work. Many work similar to waiters. They have a base salary, and then receive a "bonus" based on their performance. No doubt that, even with the bonuses, these people are probably only receiving a fraction of what they might normally make in a year. Part of keeping the company afloat is keeping employees working there. Obviously the ones that met their marks well enough to receive their bonuses are the ones you want to keep. You think hacking all these people's pay and having them leave the company is what will turn it around??

[Billy]

Except that paying you $10 million isn't part of a contract for a business the government is trying to keep afloat.

You are dead on on why people are ticked, and was exactly the point I made in the other thread. Because people are "living large". It's all about perspective, and you and everyone else who's ticked fails to see it in perspective. You just see the word "millions" and "executives" and draw your own conclusions based on your decidedly non-millions non-executive lifestyle. All you see is someone doing better than you and you feel that knocking them down to your level is the only solution.

The bottom line is, you have no idea how this business is run, you have no idea who the people receiving the bonuses are, and you have no idea about their job performance, or what their contracts entitle them to. So bitching about it is stupid.

Lastly, understand the concept of how business people work. Many work similar to waiters. They have a base salary, and then receive a "bonus" based on their performance. No doubt that, even with the bonuses, these people are probably only receiving a fraction of what they might normally make in a year. Part of keeping the company afloat is keeping employees working there. Obviously the ones that met their marks well enough to receive their bonuses are the ones you want to keep. You think hacking all these people's pay and having them leave the company is what will turn it around??

I laughed when you started explaining to me what a "bonus" was.

For you non-corporate types, I will let you in on a little secret: Bonuses are typically paid out based on company performance. If your company doesn't meet its financial goals, no one gets bonuses. Now while I do not know how AIG pays out its bonuses, it is a pretty good bet that they pay out bonuses based on company performance like most other giant coorporations. Because in large coorporations, individual performance is very difficult to measure since so many people are involved, the general policy is to simply award everyone for a good overall company performance, rather than try to reward individuals, since that is prone to corruption and misappropriation of funds.

Now to my point. What I am infuriated about is not about the bonuses, rather that they consider the bailout as income (since they paid out bonuses to their employees). We can equate that to your 20 something spoiled brats who get themselves into a lot of financial trouble and then ask mommy and daddy for some cash. And instead of learning from their mistake, they treat parental help as a source of income and never try to fix their financial situation, but instead, keep partying and rely on that gift over and over again. I am mostly afraid that AIG will not mature from this experience. Their actions display to me that they are the spoiled brat, and instead of taking actions to slim down, become efficient, and work through this, they are taking our money and celebrating as if AIG is doing great! And when they mess up again, then what? Another bailout? When will it end? Will it end?

I am so happy that my government decided for me that I become a customer of AIG. And the great thing for AIG is they don't have to provide me with anything!

[impala454]

I do not know how AIG pays out its bonuses

Thanks, that's all I needed from you.