Big Score 1 Posted September 17, 2008 Share Posted September 17, 2008 Robert Willumstad only became CEO of AIG in June. After the Feds take over of AIG, he was asked to step down. Per his safety net employment contract, Willumstad is gonna walk away with a cool $5,000,000.00 And just to pour gas on the fire, salt in the wounds, etc...etc...etc... that's $5,000,000.00 of our tax money. Only in America Quote Link to comment Share on other sites More sharing options...
WaterMan Posted September 17, 2008 Share Posted September 17, 2008 Go team. Quote Link to comment Share on other sites More sharing options...
Tboogs Posted September 17, 2008 Share Posted September 17, 2008 Go team. Of our money is right!!! Like i said AIG is now PIG = The Peoples Insurance Group! Quote Link to comment Share on other sites More sharing options...
Tboogs Posted September 17, 2008 Share Posted September 17, 2008 What's gonna turn this market around???? AMERICANS demand new "bubble" to invest in! Quote Link to comment Share on other sites More sharing options...
muck Posted September 17, 2008 Share Posted September 17, 2008 Robert Willumstad only became CEO of AIG in June. After the Feds take over of AIG, he was asked to step down. Per his safety net employment contract, Willumstad is gonna walk away with a cool $5,000,000.00 And just to pour gas on the fire, salt in the wounds, etc...etc...etc... that's $5,000,000.00 of our tax money. Only in America Honestly, he was brought in to fix the errors of the predecesssor. Be pissed at them; not Willumstad. Oh, and it's $4 million of tax money since we only own 80% of the company. :oldrolleyes: ...and, he will be paying taxes on the whole $5 million at approx. 40% (state and federal) ... so, after taxes, the tax payers are paying the guy $2 million. While $2 million is tough for some to swallow, it's not the $5 million. Quote Link to comment Share on other sites More sharing options...
Savage Beatings Posted September 17, 2008 Share Posted September 17, 2008 I gotta apply for a job like that. Quote Link to comment Share on other sites More sharing options...
Big Score 1 Posted September 17, 2008 Author Share Posted September 17, 2008 ....the tax payers are paying the guy $2 million. Well that makes me feel better...............NOT!!! Quote Link to comment Share on other sites More sharing options...
TimC Posted September 17, 2008 Share Posted September 17, 2008 Bend over, America. It only hurts a little at first and you eventually get used to it. Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted September 17, 2008 Share Posted September 17, 2008 Robert Willumstad only became CEO of AIG in June. After the Feds take over of AIG, he was asked to step down. Per his safety net employment contract, Willumstad is gonna walk away with a cool $5,000,000.00 And just to pour gas on the fire, salt in the wounds, etc...etc...etc... that's $5,000,000.00 of our tax money. Only in America It's not our tax money unless AIG goes belly up. AIG has borred the $ from the govt which it used 80% of its assets as collateral to the govt which of course if it goes belly up, the assets wont be worth 80% so then it will be the tax payers money. Quote Link to comment Share on other sites More sharing options...
Big Score 1 Posted September 17, 2008 Author Share Posted September 17, 2008 It's not our tax money unless AIG goes belly up. AIG has borred the $ from the govt which it used 80% of its assets as collateral to the govt which of course if it goes belly up, the assets wont be worth 80% so then it will be the tax payers money. And where did the $ the govt lent AIG come from? Quote Link to comment Share on other sites More sharing options...
MrTed46 Posted September 17, 2008 Share Posted September 17, 2008 (edited) And where did the $ the govt lent AIG come from? Borrow means AIG will pay it back with interest. So we are not directly paying for the 5mil. They will get it back with interest on top of that. Edit to add: Also, the govt didnt just give him the 5mil to walk away it was in his employment contract which he is entitled to by law. I see nothing wrong with him getting the money. I dont think he deserves it but blaim the board of directors of AIG who employed him and gave him this contract. Edited September 17, 2008 by MrTed46 Quote Link to comment Share on other sites More sharing options...
Big Score 1 Posted September 17, 2008 Author Share Posted September 17, 2008 Borrow means AIG will pay it back with interest. So we are not directly paying for the 5mil. They will get it back with interest on top of that. Well we hope we get it back, but be that as it may, until it's paid back, yes it is a $5,000,000 tax payer funded Golden Parachute. Edit to add: Also, the govt didnt just give him the 5mil to walk away it was in his employment contract which he is entitled to by law.So keep him employed, but slash his salary. I see nothing wrong with him getting the money. I dont think he deserves it but blaim the board of directors of AIG who employed him and gave him this contract.I blame both. I'm sure he negotiated his contract with AIG's board of directors. Both culpable. Quote Link to comment Share on other sites More sharing options...
muck Posted September 18, 2008 Share Posted September 18, 2008 It's not our tax money unless AIG goes belly up. AIG has borred the $ from the govt which it used 80% of its assets as collateral to the govt which of course if it goes belly up, the assets wont be worth 80% so then it will be the tax payers money. Wrong. AIG used 100% of its assets as collateral. Additionally, the USG owns 79.9% of the company. This is a common structure, however, its generally only used for high growth companies in need of capital where they'll borrow $$ at (say) 12% interest for three years, and the lender also receives warrants on ___% of the company's common stock, which acts to only increase the total return the lender receives. First time its ever been used for a company with $1 trillion of assets. Quote Link to comment Share on other sites More sharing options...
Clubfoothead Posted September 18, 2008 Share Posted September 18, 2008 Honestly, he was brought in to fix the errors of the predecesssor. What a crock. One wouldn't even have to know what AIG even does to not fix something so bad the federal government has to take over. AIG could have employed me for $162,438.00 and I could have run it into the ground in less than the 60 days it took Willumstad. He was brought in to fix it and could not. His contract wasn't with the government and obviously AIG can't afford to pay him that money. Quote Link to comment Share on other sites More sharing options...
Perchoutofwater Posted September 18, 2008 Share Posted September 18, 2008 What a crock. One wouldn't even have to know what AIG even does to not fix something so bad the federal government has to take over. AIG could have employed me for $162,438.00 and I could have run it into the ground in less than the 60 days it took Willumstad. He was brought in to fix it and could not. His contract wasn't with the government and obviously AIG can't afford to pay him that money. Unless AIG files bankruptcy, his contract is still good. You forget, that in a way this is the government making an investment, and AIG will be essentailly buying back it's stock. Just because I buy a big chunk of stock in company XYZ does not mean that I can turn a blind eye to the contracts company XYZ wrote prior to me buying the stock. Quote Link to comment Share on other sites More sharing options...
Jimmy Neutron Posted September 18, 2008 Share Posted September 18, 2008 Unless AIG files bankruptcy, his contract is still good. You forget, that in a way this is the government making an investment, and AIG will be essentailly buying back it's stock. Just because I buy a big chunk of stock in company XYZ does not mean that I can turn a blind eye to the contracts company XYZ wrote prior to me buying the stock. Very true. The company I work for paid $305M (a WR Grace subsidiary) in fines given to a company we bought even though we as a company did nothing wrong. Quote Link to comment Share on other sites More sharing options...
muck Posted September 18, 2008 Share Posted September 18, 2008 (edited) What a crock. One wouldn't even have to know what AIG even does to not fix something so bad the federal government has to take over. AIG could have employed me for $162,438.00 and I could have run it into the ground in less than the 60 days it took Willumstad. He was brought in to fix it and could not. His contract wasn't with the government and obviously AIG can't afford to pay him that money. When a new CEO takes over a company, there is (generally) a period of a couple of months required to dig into the entire business to have a handle on what is going on and what sort of strategy you want to develop and eventually deploy. AIG is / was substantially larger than most typical businesses... Willumstad was just getting his seat warm. I put 0.5% of the blame on him, and 99.5% of the blame on his predecessors. PS - Perch is right ... contracts mean things, even if we do not like them. Edited September 18, 2008 by muck Quote Link to comment Share on other sites More sharing options...
Ursa Majoris Posted September 18, 2008 Share Posted September 18, 2008 PS - Perch is right ... contracts mean things, even if we do not like them. On that subject, haven't the CEOs of Freddie and Fannie been told they aren't getting their golden parachutes even though they are also contracted? Quote Link to comment Share on other sites More sharing options...
muck Posted September 18, 2008 Share Posted September 18, 2008 On that subject, haven't the CEOs of Freddie and Fannie been told they aren't getting their golden parachutes even though they are also contracted? It's possible that either (i) their contracts spelled out the circumstances under which they would not receive payment, (ii) there is a difference between the USG putting them into receivorship (which is sorta like 'bankruptcy-lite') and buying 80% of a company that remains publicly traded (AIG), or (iii) the USG is claiming something akin to imminent domain on those $$s that were otherwise spelled out to those executives. Quote Link to comment Share on other sites More sharing options...
BeeR Posted September 18, 2008 Share Posted September 18, 2008 Honestly, he was brought in to fix the errors of the predecesssor. And what a bang-up job he did Personally I see nothing wrong w/this [/circuit city] Quote Link to comment Share on other sites More sharing options...
muck Posted September 18, 2008 Share Posted September 18, 2008 And what a bang-up job he did [/circuit city] Seriously, how much would you expect him to have accomplished in two months? Quote Link to comment Share on other sites More sharing options...
Czarina Posted September 18, 2008 Share Posted September 18, 2008 (edited) I haven't read a ton on the AIG stuff, but isn't this "loan" to AIG a 24 month repayment deal? It's basically going to keep them afloat long enough to sell off a bunch of assets and close up shop or something, right? I know the bail out sucks, but the fallout from a failure this large would have put our economy (and the world economy) into a huge( r) tailspin, correct? Edited September 18, 2008 by Czarina Quote Link to comment Share on other sites More sharing options...
Big Score 1 Posted September 18, 2008 Author Share Posted September 18, 2008 I haven't read a ton on the AIG stuff, but isn't this "loan" to AIG a 24 month repayment deal? It's basically going to keep them afloat long enough to sell off a bunch of assets and close up shop or something, right? I know the bail out sucks, but the fallout from a failure this large would have put our economy (and the world economy) into a huge( r) tailspin, correct? As far as what is being reported, this is correct. The problem is this company knew it was in dire straits & to keep itself from completely collapsing, what our government is going to do (sell off parts of the company), is what Willumstad needed to do. But instead of doing this, Willumstad overvalued the company's assets, failing to adjust the price he was asking for various sell-able divisions of the company. Basically dug his heels in until the company was on the brink of the precipice. Enter the government & it's bailout, which will now do what Willumstad should have done a month ago. Of course now the sharks are circling, so it's gonna be a fire sale. The share holders have already definitely taking a beating on this & depending on what AIG's assets ultimately bring, quite possibly the tax payers. And Willumstad? Thanx for doing nothing & here's $5,000,000.00 Yeah Willumstad had an employment contract which is completely legal, but what the government could have easily done is to make the tax payer financed bailout conditional upon all AIG executives voluntarily making their golden parachute contracts null & void & made this condition public knowledge. I guarantee you that would've worked. The top level exec's at AIG know that if they had refused that condition, after it being made public knowledge & instead let the company go belly up so they could collect a few more million for themselves, they would've been literally torn to pieces. Quote Link to comment Share on other sites More sharing options...
Furd Posted September 18, 2008 Share Posted September 18, 2008 Even a brief period of executive experience is worth much, I've heard recently. Quote Link to comment Share on other sites More sharing options...
Chavez Posted September 18, 2008 Share Posted September 18, 2008 And where did the $ the govt lent AIG come from? Iraqi oil? Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.