Outrageous! Bailout dough spent on skin cream
July 21, 2009 by StaffPosted in: Uncategorized
Some companies might find it difficult to justify giving executives spa treatments at a fancy resort when times are good, let alone now.
So the outrage over AIG, Inc., spending $440,000 on a retreat for its executives while it was tapping into an $85 billion bankruptcy bailout loan from the federal government shouldn’t come as a surprise.
The retreat came to light this week at a Congressional hearing that revealed findings of an investigation into AIG’s meltdown.
Rep. Henry Waxman said the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa at the St. Regis Resort in Monarch Beach, CA.
Bonuses OK’d despite big losses
The $440,000 expenditure seems like a drop in the bucket compared to executive’s compensation packages which were also revealed at the hearing.
Documents from AIG show as the company’s risky investments were imploding, executives’ pay plans were altered to pay out regardless of losses.
AIG lost more than $5 billion in the last quarter of 2007. When the company’s compensation committee met in March 2008 to award bonuses, CEO Martin Sullivan urged that those losses not be considered. Including the losses in calculations would have slashed executives’ bonuses.
The board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of more than $5 million. Sullivan also got a new compensation contract with a $15 million golden parachute.
Sullivan countered that he was mainly concerned with helping other senior executives.
The hearing also showed that AIG executives hid the full impact of its risky financial products from outside and inside auditors.
Of course, there are obvious financial management lessons to be learned by the AIG story. But what about an employee morale angle? How do employees feel when company executives are treated to multi-million dollar salaries, bonuses, and special perks? Does it hurt morale, or are these compensation packages for executives easily explained because of their responsibilities? Let us know your thoughts in the Comments Box below.
July 22nd, 2009 at 3:42 pm
Trust me, you do NOT want to hear my thoughts…
July 22nd, 2009 at 4:24 pm
These people are UNBELIEVABLE…in the worst way. The company lost $5 billion and the CEO got a $5 million bonus…How does that make any sense at all? And the executives’ retreat paid for by bail out loan dollars is just ridiculous; there is not a whole lot more to say about that. It’s unfortunate that such ignorant, selfish, greedy people exist.
July 22nd, 2009 at 5:03 pm
CEO Martin Sullivan must have friends on the board! Sullivan was CEO during the $5 billion lost in the last quarter of 2007, his and the other executives should have taken a loss. This type of example diffinitely effects the employee’s morale.
I ask why our government is so quick to bailout these companies without stipulations! This useless spending has to stop!
The corportation I work for upper management took a ten percent cut in pay, we did not have to ask the government to bail us out. Our employee’s are taken care of and are glad to be working.
I hate to admit that I have some AIG stock, I wonder what it will be worth when their bailout money runs out?
July 23rd, 2009 at 7:44 am
It is greed and mismanagement. No thought was given to the average worker.
July 23rd, 2009 at 2:51 pm
I wonder how they justified the spending and bonuses? It defies all common sense, logic, and sense of right and wrong.
July 23rd, 2009 at 6:10 pm
Getting paid exhorbitantly for failure. I love it. So comforting to know what American business and industry has come to.
And the “unleaders” of large corporations wonder why the general working lcass in this country has less and less sympathy for the gubmint wanting to crack down and reinstitute tighter regulation of these industries.
What a bunch of greedy, selfish morons.
July 24th, 2009 at 10:46 am
Why don’t people get over the fact that CEOs get paid more than they do and maybe strive to become one themselves instead. Executives run the companies and deal with far more stress than any of the average workers could imagine. Does that mean I feel they are not overpaid? Of course not. They are overpaid but what is the sense of harping about it ad infinitum. Get over it and work to make your lives better and stop worrying so much about what others make. If someone came to your desk today with a check for several million dollars would you turn it down because it was hurting the little guy? I suspect not. As the lefties like to say: move on.
July 24th, 2009 at 10:53 am
Gee Mel, yeah, let’s just pretend it never happened! Move on! I’m a bit of a ‘leftie’ and I would never just forgive what is going on so don’t blame this on Democrats just because you are a Republican with blinders and want to just hang the blame on anyone but your own pathetic party! What color is the sky in your world?
July 24th, 2009 at 10:54 am
One more thing, why not write about the outrageous resort trip given to staff of the Social Security Administration? You talk about a grievous misuse of public funds and trust? That is beyond disgusting to hear of govt workers going to a luxury resort in AZ on the people’s dime and not feeling the least bit sorry about it. Successful salespeople for Wells Fargo are shamed into giving up their hard earned trip to Las Vegas last year yet there is no outcry about the SSA trip. Just like there was no outrage about a president going on a date to NYC or to Paris on the people’s dime. If you are going to be outraged about AIG or GM or whatever, be outraged at the govt too.
July 24th, 2009 at 10:59 am
Well Lori,I thought this board was above personal attacks but I guess I was wrong. My statement confirmed I think executives are overpaid. I am over any kind of grousing about what people make because it doesn’t help anyone. If you could not understand that point I guess you never will.
July 24th, 2009 at 11:03 am
“Successful salespeople for Wells Fargo are shamed into giving up their hard earned trip to Las Vegas last year…”?
Wells Fargo only earns money by sucking the life out of their customers – They admitted to taking bail-out money when they didn’t even need it! They are so patriotic-they only cancelled their trip so that it would not call attention to themselves. They top the list for capitalist greed.
July 24th, 2009 at 11:11 am
It’s OK if ‘rightees’ make attacks on ‘lefties’ (-as you pointed the finger first)- but when the shoe is on the other foot, suddenly it’s a personal attack. That’s usually the way this goes…
July 24th, 2009 at 11:32 am
Like the government, AIG, auto & financial companies (Freddie & Fanny are both federal) that benefitted from taxpayer money do not care or appreciate where the money came from and never will when they can just seize it from us. The abuse of power is now so blatently put in our faces. It’s the nature of politics. Obama’s crony Holbooke (board member) gets his bonus (negotiated AFTER the knowledge of the company’s losses), then he jumps ship for a job @ the White House (what?!). Guess what; the former CEO of Fanny is now the economic advisor to Obama. Obama denies any relationship to the AIG bailout. He denies any favors for his government cronys from the financial bailout. All the GM dealerships that were closed: gave political contributions to GOP, or Dems other than Obama. Officials say they used household incomes, revenue & other factors, but not political. I’m just guessing here, that whatever data they accessed included political contributions. What a liar. More and more people are waking up to the lies and corruption. It’s been going on since the start, but we’ve given the government too much control. Now they are free to put it in our face and what are we going to do about it? They’re in OUR business. When the economy gets better, the government (or to be more specific) whatever party is the majority at the time, will have control over our auto, banking & insurance industries. Now they want a piece of the medical industry, too. That’s what our stimulus money really did.
July 24th, 2009 at 11:38 am
Lilly, nice to see some reason added to the board today. Lori, if you consider that an attack you have awfully thin skin.
July 24th, 2009 at 12:43 pm
Mel … it’s not about CEOs being overpaid. It’s about them obtaining huge bonuses for failure. If any working class employee were to be the cause of their company hemorrhaging money like a trauma victim, not only would that employee not be getting a bonus … THAT EMPLOYEE WOULD BE FIRED.
Pay for performance only seems to apply to the workforce – the laborers who actually make industry run. Please don’t preach to us about stress. I’m currently in a fairly high level management position and I get paid well. I don’t work nearly as hard or have half the stress of many of my staff who struggle to provide for their families on far lower wages and often have to take a second or third job just to pay the bills and have a little extra. If you honestly believe the “unleaders” are more important than laborers, wow … just wow.
Income disparity in our country is an ever increasing problem and when you add to that by shelling out unjustified bonuses to the highest paid executives in the country, lower wage workers have every right to be angry.
July 24th, 2009 at 12:52 pm
Oh … and lets not forget that the same corporations that wine and complain about excessive government regulation and taxation are many of the same ones who went running to the feds with their hands out after they ran their own companies into the ground.
Less regulation in the housing, banking, and financial sectors … yeah … that’s worked out real well for us lately. I say: regulate the large multi-national corporations like crazy and let them burn when they fail miserably. I have no idea why we are so concerned with protecting major shareholders at the expense of the workforce and financial stability of our nation.
July 27th, 2009 at 12:50 pm
Mel
What is the difference between AIG & SSA and their misuse of money? Why do you imply it is more disgusting for the GOVERNMENT to make such ventures…AIG is sitting on the GOVERNMENT funded money and doing the same thing….There is no difference…I wonder why it is that you would bring that up as a comparison….? (And unfortunatley this website cannot post all of the cases of where Government Funded money is misused…there is not enough “staff” in the world to be able to keep this website updated with all of that even with the the current rate of the unemployed.)
And I don’t think anyone is attacking you but pointing out that your ‘opinion’ has been done with little research and sounds to be quite bias.
Have a bad day?