Commentary: "We owe you more"

We saw what we saw

Well said, Ms. Schlesinger. I'm glad you posted this. I was wondering about the counterpoint to the rapid populist arguments.

I was watching at 7:30 this morning and I really wanted to hear what you had to say but Mr. Mack kept acting like a child and screaming over you. It left me frustrated enough to send an e-mail to AM@CNN.COM but I'm sure, since it wasn't complementary to the way they ran the interview, they threw the comment right in the trash.

While Mr. Mack was childish in his appearance, the real blame should fall on Ms. Chetry. She appeared to disagree with you, also interrupted you and didn't control Mr. Mack's behavior. She is normally one of the better interviewers around and the reason I switched to American Morning when she left the other network. It was disappointing to see her act so unprofessionally this morning. She even said you could have the last word and didn't follow through.

I can see Mrs. Schlesinger point on the bonuses; however, Wall Street still needs to wake up and smell their odor. Apparently, they are not the best of the best. Even if they were, no one should make millions in bonuses. Yes, the government should have had better oversight, but they didn't. I believe in college there is a class called ethics in business that wal-street and the government employees must have flunked. As for doing what our parents have taught us and live within our means; try putting 2 children through college, have one still in Jr. High, pay utilties which the gov. continues to let go up, buy food which continues to go up, pay for the outrageous price of gas, and remember housing has tripled in the last 6 years. Now take my salary of 35,000 a year. What is left to save? Nothing!!!! Barely, get by and put food on the table. Oh by the way, I am a college graduate. Should have went into Finance.

Finally some sense. Yes the "bonuses" were silly to dole out, but it is really nothing more than part of their pay. Just deferred. I don't want the government coming in and taking away these people's paychecks anymore than I want them taking away mine. Be mindful of how much power you give the government. Just like when Bush was in office and we gave away freedoms because of "terrorism", don't give it away because of a poor economy.

"....comprised of a $100,000 base salary and up to $200,000 of cash and stock “bonus” that is discretionary based on her performance. Jennifer’s bonus was not intended to be subject to the profitability of the firm,

Horsefeathers. Call it what you want. When people in this business are compensated based on their performance then it is subject to profitability.

You are dead WRONG....and you are just as OUT OF TOUCH as those AIG executives. There are people out there with no jobs or low paying jobs that are struggling to pay their bills and you people think nothing of buying a $500 suit. There is NO ONE in the world that deserves millions of dollars in bonuses, I do not care what contract they had or what they did. In order for you to understand how ticked off people are, get out of your big house, drive your fancy car..... and go work in a factory for 8 hours a day, collect your check on Friday, dead tired, and then read the tax line on your check and realize those taxes went to people who are sitting on millions of dollars. Frustrating.

This wouldn't be about class warfare if people's financial woes were not so extreme. Unfortunately it's past that point and we are witnessing the french revolution of our day. Whether deserved or not, no one can justify even a $200,000 bonus to anyone working at AIG to a person struggling to feed their family under the current economic climate. Couple that with a relatively common (and not completely inaccurate) perception that AIG and its ilk are the root cause of this climate and it's easy to see anger rising. Lucking for those execs at AIG this isn't 1790's France so the worst that will happen to them is they feel the shame of the millions of unemployed on their shoulders when they cash those 6-7 digit checks.

Are you kidding us? Perhaps those bonuses were intended for individual performance. However, a company that takes $170 billion from the taxpayers does not have a single success story in it and therefore nobody should receive a bonus. Listen, in times of national crisis like this the word "legacy" is irrelevant. To create the perception of a make-believe little free enterprise system within this company in which individuals can still be grandly rewarded while the entire ship sinks is ludicrous. The haste with which the U.S. government worked to rescue AIG does not give AIG the right to ignore common decency.

Your example of a $300,000 salary (OK, salary + bonus) still does not create any sympathy with me when most people I know don't even get close to such a salary. So please, get real. I feel your "pain", poor Wall Street. (NOT!)

Ridiculous! We are to feel sorry for these poor 100k per year earners who work for a company that shouldnt even exist? Oh poor them, they wont get there 300k per year promised to them. What about all those mortgage brokers out there who were making 100k a month, should we feel sorry for them too because there industry is dead? Lets see where they would be today if we didnt gve them billions of dollars of our tax money. I'll tell you, they would jobless and et's see if they wuld have the nerve to demand a 300k salary or take a "pay cut" from their last job. You are unbelievable in todays world to even try and justify people receiving a million dollars of our taxes.

Thank you for the article, people are way over stimulated by what the media wants them to see. Some of these people are entitled to the compensation they were promised. Last I looked it was a free market place and one is free to choose their vocation, so I wish people would stop saying I make this amount it's not fair. Point is you pretty much rise to the level that you seek.

Thank you for posting your view point. I was watching the program and was annoyed at the other person's behavior which was extremely rude. The host was unable and appeared unwilling to control the debate.

I would like to echo Mr. Heichman's response above – the scuffle this morning was inexcusable.

(I also emailed CNN. I also expect it to be ignored).

I hope in the future that Ms Chetry is more professional and promotes real debate rather than fanning the flames for her viewpoint. Otherwise, we might as well be watching Fox News.

These employees could not be considered the best of the best. I question their integrity. If any other industry failed as miserably as this industry has, heads would be rolling and the heads would have rolled before, not after, the bonuses. I don't buy Ms. Schlesinger's version of events.

Hey, Schlesinger. when you and yours start behaving ethically, THEN we can start again to talk about bonus pay. To pretend that the financial industry is anything other than a rat's nest of corruption, incompetence, and greed is really disingenuous.

Not too long ago, I watched, not happily, as our large oil companies made $10 – 15 billion a quarter. I thought that was excessive. Now AIG puts them far in the shade – it loses that much per month. We want to pay extra to keep the people who figured out how to do this? WHY? Had AIG bankrupted, NONE of these 'bonuses' would have been paid. Would we have been worse off if the all-time greatest wealth destroyers had gone elsewhere for employment? I just can't believe it. In no way did they deserve further pay for helping enable this catastrophe.

One can argue that the high salary Wall Street employees, especially some smart graduates just out of college, get is the result of market forces in action, which in fact is true. But I think if we regulate their salaries then some smart chaps might leave but a lot of good will happen. Wall Street businesses will continue as usual, with ups and downs on the way, and those smart chaps will find creative employment in some technological sectors or go back to graduate school and do research and thus raise the overall competitiveness of the country.

That unfettered capitalism is always good for the country is just an opinion, not a fact.

I wonder what we have come to that there can be anyone who believes that the AIG bonuses, or bonuses paid to staff of any financial institution that has received billions in bailout funding, are in any way justifiable. This is an atrocity. Taxpayers should not be required to reward the recklessness, gluttony, and incompetence that have brought us to the brink. If there are no other means of correcting this situation, the Congress should act to amend the federal tax code to provide that such bonuses will be taxed at an effective rate of 100% (with retroactivity, if necessary.)

Your argument sounds extremely weak to me. My wife and I have worked very hard through our entire lives. We have not overspent, we have lived well within our means. We are both professionals and our combined income at the end of our careers is not more than the $100,000.00 you throw out like it was yesterdays newspaper. We had planned on retireing this year, however because of the greed on wall street that will not happen. Our system is broke. I hear defense arguments in your rebuttle but it rings hollow. Where is our bonus?

Re: your interview/ambush. I'm sorry you were set upon so rudely.

Re: your comment on class warfare. Do Wall Street financial types consider themselves a separate "class," entitled to a total compensation scheme (and I use the word with all its negative connotations) that the lower classes don't equally deserve? Most Americans get a paycheck, maybe some employer contributions to insurance costs, and perhaps a Christmas bonus worth 10% of the regular paycheck. (One employer of mine–a credit card processing company within the banking community–gave us a tree ornament one year.) Beyond basic salary and a pay-for-performance bonus is all that the Wall Street nobility deserves to get, in my opinion. And that bonus shouldn't be more than a % of the basic salary.

I think the basic problem is that the AIG folks still have their jobs AND their deferred compensation courtesy of the taxpayers. Many taxpayers, however, have lost their jobs (= all compensation) even as a portion of their previous income went to support AIG. Even the $100K base salary in your example sounds like a LOT of money to most people. There is a lot of pain around, and yet the apparency is that the well-paid AIG folks are insulated from it even though their actions caused some of that pain.

I understand your point, but the issue is a matter of 1) emotion and 2) over-complicating something very simple.

If I make the world's best lemonade, and people want to pay me a $1M a year for it, I'm rich, good for me. If I did that for 20 years, I'm even richer. No one is mad at me.

When in year 21 I don't sell a drop, and b/c of my costs I'm at -$1M, it is a loss. I better have some cash on hand to get by. If my lemonade is so well integrated into the fabric of America, and the government sends me $2M to stay afloat, I don't then go and pay myself a high salary, and a bonus.

See, it's not that complicated.

The young lady in your Wall Street example – shouldn't get the $300K. That's how life works. If the company does well, you should be rich beyond comprehension. If the company does poorly, you don't still reap the benefits. I guess she'll have to try to live on her measly $100K, 2 times the average household income in America.

This is no different than why many conservatives hate handouts and welfare – there is a disdain with giving people something they did not earn. If your company loses money, and needs help, you don't reward people. You simply don't. Sad.

Wanna know how to determine if a person is talented enough to retain? Easy. If your company had to get government cash to stay afloat – you really aren't that talented.

Please forgive me if I seem one of those "irrate" people, but as your example given, you state the delayed compensation was based upon how the company and the individual performed their said duties. How do you justify awarding folks millions of dollars in bonuses for taking extreme risks and subsequently driving their company to the point of ruin. Given any other job, from plumber to taxi driver, if we in the non-financial business performed as well as the upper management of these marvelous financial institutions, the only reward we would have been given is a pink slip and a swift kick in the backside. I agree that those who spent fiscally wise and saved, have for the most part walked away unscathed, but please don't try to justify the outlandishness of these perks.

That's funny; I was told I'd get a raise every year, but I've already been told no raises at all this year. I'm barely scraping by and I've got a master's degree. I really have no sympathy for someone who *thought* they were getting a 6.4 million dollar bonus. Let them eat cake?????

Ms. Schlesinger's point is not valid. Bonus's are predicated on not just one's own performance, but on the performance of the firm. If the firm is not profitable, then discretionary bonuses should not be paid. That accrual is reversed. As to the claim that good people would leave, where would they go. The government should sue to collect all bonuses from all the firms who had to be bailed out. Only those firms who were actually profitable and solvent should be allowed to pay bonuses. What AIG is doing is criminal and their executives should be punished ! Accountability needs to begin now.

I work in a hospital every day, do I get a bonus for not killing my patients? I haven't killed one yet, 32 years and counting. Where's my bonus? I assume ridiculous risks every day too, disease, germs that could kill me. Those bonuses are an example of PURE GREED. No amount of justifying them will ever be enough.

Sorry, I refuse to buy it! As a small businessman, I promise you that a losing season does not create bonuses. However, let us focus on Wall Street. Are you expecting me to buy the notion that Wall Street was set-up by a government that created less regulatory oversight, and thus these poor executive who walked away with millions in bonus compensation, were nothing more than pawns of a system gone awry? Home Loan Brokers were misleading borrowers. I personally spoke with many young couples who were given 110% to 125% loans, with loan brokers making thousands of dollars based on falsified documents. All of those folks lost their home when the bubble came due. This shell-game was started on Wall Street, and sold to banks in Europe, the Middle East, and China. When AIG failed, it was caused by foreign banks and investors asking for the insurance coverage to kick-in, and the U.S. Treasury was set-up to cover the scam of the century. Hank Paulson went to President Bush, explained the mess they faced, and the run on the U.S. Treasury started. However, please explain to me, in layman terms, how these executives at AIG deserve the bonuses they received three to five years ago, and deserve an additional bonus when the U.S. Treasury, via the U.S. Tax Payer, bailed them out in November 2008. What we see here are the Money Changers in the Temple. Maybe Jesus needs to visit Wall Street.

I read your article and am even further dismayed. Wall Street and the media who cover it JUST DON't GET IT.

The average American taxpayer who will never even after 40 years of labor see a six figure annual income, simply cannot and will not support this kind of extravagant lifestyle with their hard earned tax dollars.

To pay a bonus or even a million dollar salary to executives of a company like AIG that has been a miserable failure as a business enterprise simply doesn't make any sense.

The media has failed and as witnessed by this article continue to fail the American taxpayer. I support the President and reluctantly the stimulus and bailouts, but these bonuses are patently absurd The world has changed, Wall Street has failed and Main Street is no longer interested in the defense of its arrongant and extravagant lifestyle. Unfortunately you and the Wall Street media that you all too often represent are not part of the solution, alas, you are part of the problem.

Using the "everyone's at fault" excuse here doesn't cut it. If my company is losing money and laying off employees (forget about causing the downfall of the economy and countless retirements), there is no way that anyone would get a bonus, raise, or the like regardless of who's fault it was. It appears to me that two basic principles are at work here, one being overused and one being drastically underused – GREED and COMMON SENSE. It's despicable no matter how you frame.

Yes, all that Ms. Schlesinger says seems to make sense. But it still does not excuse or even assuage the bitter reality of how my retirment has been ruined by the economic downturn. Sure, younger people can hold on...they've got time. But after working, paying taxes,
mortgages and bills fully and on time, saving as much as I did, to see whatever you have to live on get sliced in half...now that's why we are increasingly bitter and dispondent. OK, so the Wall Street tycoons get paid millions for making money...but where is their soul, their sense of responsibility to the American public, to the people who work all their lives in hopes of at least a few years of a nice life. We don't aspire to their yatchs, private jet planes, Miami beach condos, and all the rest that they enjoy. Just the kind of security we've lost for all that greed to make a fast buck at the cost of an entire nation.

If I understand, Ms. Schlesinger argues that if a broker makes a ton of money then they should be rewarded with a bonus. Perhaps so, if there was a quantum of integrity or honesty in the approach used to earn that money. But there was no honor or integrity, simply greed. So while I agree that the bonus issue is chump-change financially, I think it is important to expose those culpable and if possible exact some punishment on them. Maybe that will help discourage the next gang of crooks from trying the same tricks.

I really appreciate your online explanation – No one ever communicates through shouting matches. However, As you said in your excellent example of 'Jennifer': "...up to $200,000 of cash and stock “bonus” that is discretionary based on her performance." So indeed with AIG the 'legacy bonuses' – weren't the workers were entitled to their 'base salary' BUT should NOT have been paid last year due to their wreckless and unprofitable performances.

You also mentioned they were contractually bound, but I would assume 'again' the word 'bonus' implies some sort qualitative assessment/evaluation of their performanace. The bonuses should only to be added to their base salary if the company financial status improved based on each of the individual's performance.

Otherwise – if the additional monies are in no way related to job performance or the company's fiscal situation based on their work/performance – should it just be called deferred compensation or their base salary – especially if it is inevitably going to be paid?

Unfair? Darn right it is unfair.......If AIG was contractually obligated to pay out the bonuses then we the American people should never had bailed out such a poorly run company and they deserved to fail! I really don't believe that the world as we "what used to be middle class" would cease as we know it. My company is on a wage freeze and they have already told us that we should not expect to get a bonus next year. I do not own my own home because I can not afford to buy. As my rent now goes up my salary does not. You want people to start acting like responsible adults??? Try walking in the millions of Americans shoes that can't put food on the table or make their mortgage payment let alone afford any luxury items.......it is insulting to see these bonuses paid to very people who ran their companies in the ground and then said that it wasn't their fault, it was the every day American that bit off more than they could chew.

No one has the right to tell anyone else how much they should or should not make as a salary or bonus. It is fine to tell others not to be greedy and live within their means and take a modest salary blah blah blah. There are plenty of situations the law governs which have nothing to do with ethics. The fact is these employees had this written into their contract and so it should be honored. As was stated before, if it were such an outrage our government should have caught this before handing out the money. Blaming the 'haves' regarding a drop in the bucket of their bailout funds will get you no-where.

You do NOT deserve a bonus for doing the job you were hired to do. You deserve a bonus when the company turns a profit because you went above and beyond what you were hired to do.

I agree with Ms. Schlesinger about the mutiple causes of the situation. I totally disagree with Ms. Schlesinger about AIG being in a bigger hole if these executives left because they were not getting a big bonus. How could AIG have wound up in a bigger hole than they currently are? There are lots of smart, hungary people within AIG who would be willing to fill those empty executive shoes for substantially less compensation and they certainly couldn't do any worse. Wall Street is the only place outside of politics where you make money for failure. Everywhere else you get fired.

alas, i missed ms. schlesinger's appearance because i can no longer bear to watch chatty-cathy CNN in the morning. my channel of choice is BBC america, where interview subjects are permitted to fullyanswer questions, and are rarely interrupted by interviewers. having said that, i don't fault the many, many people whose reputations have been collectively sullied by the excesses of a few. we should all fault, as ms. schlesinger notes, a confluence of events of which AIG is but one component. finally, here's hoping at some point we're able to return to basic manners in public discourse, but i'm not betting the farm on it happening anytime soon. too many of us are taking our cues from what/who we see on TV.

Mrs. Schlesinger you have no point, as your premise is that we all created this mess. You forget that some people were prudent or could not afford country club dinners and spas in California. We decided to put money into our houses. This mess is greed and arrogance. Let's put safe food on the table by paying farmers for their effort, before we lose that rural attitude that was laughed at by the Big City Boys because they were the Rulers of The Universe. That arrogance doesn't allow people to get along.

"We got into this together and we will emerge from it together"

You hang with a much different crowd than most of us. You might want to get real. I love when financial advisers get to blame us.

I got news for you, I had nothing to do with this crisis, yet I sure am at risk because of it. There a lot more Americans who don't fit into any of these commentators categories of who is to blame than the out-of-touch Ms Schlesinger has a clue about.

I think the real question is not whether bonus should have been given, but where would the money have come from to pay the bonuses if we taxpayers did not provide it. And, were we bailing out the company or executives that created the problem?

Maybe some clarification of "stock bonus" or "stock compensation" would be in order. If these items are merely stock options that's one thing. An option would only be as good as the option price vs the current stock price. If they are actually paid in company stock, then they would be paying taxes on a the bargain element currently. Could someone shed some light on this?

Well said. However, everything goes null and void when you "take the money" from the US Government versus "make the money" in profits.

Where in these 'contractual' obligations does it state the bonus' are 'guaranteed' by the US Government? Please note that a reply equivalent to "Where does it state that the bonus' are not" is just a childish response. Is my deferred compensation guaranteed by the US Government too? Is yours?

This is a grown up world and this company run by these individuals made grown up mistakes. And then had the audacity to reward themselves with taxpayer money (not Shareholder money).

To place the blame otherwise, Ms. Schlesinger, is naive and immature.

These individuals need to be tracked down and made to pay the money back directly to the US Government (read ME).

Sorry, I think the criminal behavior of the big bonus recipients negates any "contractual obligations". I don't think you made a reasonable case for their payment, Jill.

Your explanation would be valid except for your very loose intrepretation of the following scenario...." Yes, the second part of her pay is discretionary, but in most years, as long as Jennifer performed her job and her business unit did its job, she would earn $300,000"

They did not do their jobs!!!!! ...and now we should not only bail them out but reward them over and above for a job "NOT WE"LL DONE". The arrogance, the unmitigated gall to believe you are "entitled" to anything is ludicrous.

@ Alesia- if your take home is only $35,000 as you state, then why did you bring three kids into the world and continue to live BEYOND your means? I make much more than you and have two children in college for which I have been saving since they were born. I also went to college, I save no less than 10% of my pay even if it meant we ate hot dogs for a week. There were times where I didn't have enough money to buy lunch in the company cafeteria and so I ate leftovers from the night before. I recall having to forgo a $3 bottle of wine for a promotion celebration so that I could buy diapers for my daughter. I sacrificed and scrimped then so that I don't have to now. I was ALWAYS able to save 10% of every paycheck by paying myself first. Your crying about not being able to save anything now is a clear demonstration of the "I am owed!" mentality. If you can't afford it, then don't buy it. You made the decisions to get you where you are so quit whining about it and trying to blame everyone else.

"as long as Jennifer performed her job".

Well, Jennifer was part of an organization that did not do it's job. So, why did anyone get the rest of the compensation. Call it what you want, but compensation means payment for services. They lost billions of dollars because they encouraged and participated in a ridiculous process that gave low cost mortgages to people who could never, ever, afford them once they adjusted. I had to prove my income and so did my wife when we got a mortgage. If AIG missed the boat on this one, they should be fired. They did not perform their job. Especially Jennifer!

This would be a moot point if these people would just do the honorable thing and not accept the bonuses.

I'm sure they all would like the money, but I'm also sure they've likely been making very good money for several years too.

Isn't helping the country and its people worth the sacrifice?

Jill Schlesinger,
No, matter how you wrap it up the bottom line is you should be compensated for your work. If you make horrible decisions and cause your company and it's investors to lose everything you should lose your job and not receive any compensation. I would have preferred that AIG went out of business along with all the other business welfare recipients. If I have to suffer for Wall Street mistakes I feel it only fair that they ALL suffer as well. Million dollar bonuses just doesn’t seem like suffering to me.

As I said no matter how you wrap it up it still stinks like you know what.

Here's what they don't understand–THEY MAKE TOO MUCH MONEY! One guy got a 6 million dollar bonus? 6 million? I have a master's degree and I will not make 1/3 of that in my LIFETIME. It is not us who is out-of-touch, it is their entire industry. The rich make too much money in this world. Athletes who make more for 1 game than I make in a year? Really? Entertainers who make $20 million for one movie? 6 months of working for $20 million?
It might not be the cause of this crisis, but it is CERTAINLY a symptom and a problem.

Sounds nice but its hogwash.

The salaries are too high. The "bonus" in deferred compensation is basically trying to cheat taxes by not having a regular salary.

The moneyed types have ruled the country for too long and have proven to be not as good as they are in their own minds.

Populism? Yes. We need to stop being slaves to capitalists who make up insane rules just to keep themselves propped up.

Why in the world should retention money be paid to retain obvious incompetents?

Their contracts SHOULD be no more solid than the contracts foisted on other workers that have had to suffer in this economy created by those incompetents.

If you defend those incompetents and their ethically questionable at best actions it puts in question your own competence.

Could we please have an example of a legacy bonus?

Ms. Schlesinger, your argument lacks touch with reality, as any of those that support the AIG bonuses. or deferred payments, or whatever you want to call them. People should not make money for losing massive amounts of money, regardless of all the flowery financial rhetoric, or what has happenned in the past.....

I'm sorry. I work in an environment with so-called "deferred" income. That portion is clearly received based on company performance. If the company does well, we receive it and sometimes a bit more. If the company doesn't do so well, it is factored down, or maybe doesn't exist. In the AIG case, I cannot imagine a worse performing company. Contractural obligations are two-fold. AIG was obligated to pay IF the employees performed, enabling a profitable year for the company. I'd hardly say that was the case here.

I am glad you have the opportunity to speak your side. It still does not make the AIG situation any easier to swallow. People, just Google AIG and why they "can't" fail....see for yourselves that the game is soo deep you should be angery! Politicians, banks, wall street, the list goes on. Pigs get fat, hogs get slaughtered! LET THEM FAIL!!!!!!!!!

Schlesinger, its your type of "no accountability" thinking that has got the country in this mess. The bottom line is that the only reason AIG is still alive and AIG execs getting paid is because its been deemed too big to fail. Any smaller business in a similar situation would have already filed for bankruptcy and those "best" people would have gotten what they deserved – nothing. Now these execs get to take their 6 and 7 figure paydays and coast through this most severe of recessions that they caused because of their greed.

AIG is holding the US taxpayers and the government hostage and stealing money blatantly from the taxpayers. You want a financial recovery? Then "justice" is more than just a catchy term because people will not regain their faith in the financial system until there is some accountability and deterrence.

PUBLICLY PUBLISH THE NAMES OF EACH AIG BONUS RECIPIENT AND THE AMOUNTS OF EACH BONUS. Let the public opinion do what legal avenues cannot.

Once again, a financial analyst defends these crooks. There is no grey area here Jill.
Also, the "differed income" argument is a real bad one. The fact is that these people should be unemployed, either due to the company going bankrupt, or from being fired for being so reckless. But you can always count on one thing here in NYC.
THESE PEOPLE WILL ALWAYS MAKE SURE THEY GET THEIR MONEY! The "club" still exists and they watch each others backs to ensure no one in it gets left out. It's an unwritten rule that goes back to the early days the market.

This is a misleading op-ed.

Ms. Schlesinger says that Wall Street individuals have been making

"a TON-precisely because over the past umpteen years, they have been extremely profitable and have been in the business of making what everyone wants: money,"

but they've been using other folks' money to make it. The money didn't just appear out of thin air. It's probably more accurate to say that Wall Street individuals have been making a lot of money because they positioned themselves at the intersection of a lot of transactions and figured out how to leverage their position to skim a lot of money off the top.

Ms. Schlesinger says that the bonuses were actually "deferred compensation," but bonuses on Wall Street have in fact been tied to individual and collective firm performance. This is one of the causes of the crisis because traders were only concerned with their performance until year-end, due to the bonus structure, and didn't take longer-term risks into account. So no, it wasn't just "deferred compensation," it was a bonus.

As for the notion that everybody contributed to the crisis, while this is true, it's obvious that one of the two biggest culprits was a Wall Street that failed to self-police (the other culprit being the real estate market). The criticism is justified.

The unwillingness of Wall Street to own up to its failures, e.g. as in this op-ed, is one factor that is enhancing current public outrage.

Your example of base salary of $100,000 and the remainder $200,000 to be paid as a bonus or stock option is keyed to the wording PERFORMANCE. If the employee's(assuming she is an executive of the highest order) has in some way allowed her organization(subsidiary) to LOSE tons of money, then her PERFORMANCE is UNSATISFACTORY and is NOT entitled to additonal compensation. Such is the cas at AIG.

Oh and one other point – most contracts have an escape clause for when performance becomes impossible. Say for example the company posts massive losses in successive quarters. A good – heck, a non-suicidal contract – would say that bonuses, or deferred compensation, or what have you, is not paid out of a company's coiffers in that situation. Let's look at it another way: what if there were no bailout? Would AIG then be forced to pay 165 million in bonuses with money it didn't have? Paying out this kind of money when the company is in that much trouble is a violation of the company's fiduciary duty to its shareholders. So is entering a contract with its own executives that obligate the company to bleed itself dry in order to pay executive bonuses. I'd watch for a class action suit in the near future.

I think the point is that the American people are tired of seeing insiders, with political ties and obvious loyalties to big business and their own pocket books, trying to convince us that the shennanigans going on on Wall Street are to be expected or are "okay."

The point is, these companies engaged in stupid, high risk trading of portfolios with no actual value to them, and then act shocked when the bottom falls out of the market and they have no capital left.

And yes, in that instance, where a company has lost so much of its capitial because of ITS OWN ACTIONS, we the people, who were called on to bail them out, absolutely are against those same people receiving large cash bonuses.

If we don't put a stop to this behavior NOW, and unfortunately that will call for a change in the basic way Americans do business, then we will see this exact same situation again in a few decades.

In the end, the super-rich are greedy. You know what would be fair? Let them keep the bonus but require that 90% be given to a charity. That's a better use for it than private jets, multi-million dollar homes, vacations, etc... all as a reward for running a company into the ground.

Doesn't anyone see the moral problem here?

You also have to realize that AIG is a HUGE company. It is also possible that some people did their job very well and actually deserved bonuses despite the company losing money overall. These were contracted bonuses though, and should have been paid either way.

Look ma'm. There's not an employment contract or bonus promise in the world that stands up to the problem of a company no longer existing, and that is exactly what happened here. AIG as a company failed. Its people failed. The firm, and therefore the ability to even pay salaries let alone bonuses would not exist today if it wre not for my money and the money of teachers and police officers and other hard working Americans. So while we suffer while you use money that is being taken from us, you can bet that nobody is going to be given extra.

You can all be happy you have jobs like some of us, and be happy at that.

Having worked for a multi-billion dollar oil field company. I have worked for bonuses. All my bonuses were contingent on performance not mention profitability. If the company didn't make money I didn't make anything above or beyond my salary. Do you think this made my coworkers and I work are butts off, you bet your million dollar bonus it did,or should I say your red ink billion dollar stimulus package.

But Jill - the word "discretionary" is still in there, and to all of us middle class types out here, that means that if the company is in NO position to pay bonuses because it is hemorrhaging money and had to be bailed out by Washington, then these AIG people should not have received another dime. In better times, their "bonuses" were probably much greater. In these horrible times, there should be no bonuses, period.

And I am one of the owners of this company, since we the taxpayers now own 80% of the stock. I say NO.

Well put. Thank you.

No, I don't buy your argument. AIG didn't need to give 73 people each $1M+ in bonus money to have them help with the"orderly wind down" of their mistakes. Almost every senior executive bonus package has a base of company performance in order to prevent exactly this sort of scenario. This is another example of Wall Street at it's wGreed at it's worst.

Bonuses should be performance based. I'm a partner in a small law firm – we don't perform, not only do we not get paid, we get sued.

Why should we reward foolish people with blinders on who sold crap to meet quotas and now seek rewards from a company with little cash other than bailout funds – funds ostensibly destined for lending – unconscionable is too much an understatment?

You're all wet Ms. Schlesinger.

Basically, Ms. Schlesinger's reasoning boils down to this.....the AIG executives weren't the only ones to blame for the financial meltdown, so it's OK for them to get their bonuses. What a pant load. Where is the executive's sense of shame and responsibility? How can they accept these bonuses after having operated in such craven, greedy, unethical, but legal ways to maximize profits for the company and its shareholders. The financial instruments these "best and brightest" dreamed up had the sole purpose of deceiving investors. A lot of things in this world are 'legal'. That does not mean they are always the right thing to do.
If AIG has to pay the bonuses, so be it. That does not mean that those receiving the bonuses need to remain employed by AIG. Anyone accepting a bonus at AIG (or any firm that has accepted bail out funds) should have a pink slip stapled to the bonus check.

You are right lady... Great article... congratulations...

Outsource them all. Mrs.Schlesinger speaks of 'performance' as a key requisite for the bonuses – please show me the performance. BTW – somehow getting $170B out of the public coffers is NOT performance!

BTW – where was the oversight and what else is being swept under the rugs? I hate to say this but the US is quickly becoming a place to be FROM.

Defending these thieves makes her (and StrategicPoint) look foolish.

Although I understand your logic and can follow the trail. I also find it hard to swallow as my hours have been cut, my wife's hours have been cut and our take home pay has been cut in half. Our mortage is due again this month, I have 2 cars that must be repaired, and we are having trouble making ends meet. BTW I was downsized in 2001 and no one helped me then either.

I don't know – Just doesn't seem to make cents.

Here is my take on the "bonus." First, if there is the legal belief that the employees are "entitled" to the bonus, I also believe that everyone of the so-called best of the best, should be FIRED for doing the job that they did do. It is a fact that this division of AIG was greatly responsible for the financial meltdown. With that being said, the so called bonus checks should be really considered severance pay, and good riddance!!!!

Miss Schlesinger,

Miss Schlesinger,

I have four counter points. 1). Systems (private) are fine and should be untouched, unless the public is harmed. Even laws and rights are suspended when actions can harm public (i.e., shouting fire in a theater). Compensation is tied to public/tax payer funds now and damage has been done not just to share holders, but public (i.e., retirement funds).

2). Lots of economic analysts say the market’s decline have not just been a result of *over-valued* companies and assets. In could be easily the case that compensation has been overvalued.

3). Justifying the magnitude of compensation by using performance of the stock market is an invalid argument as much of the performance was either over-valued (not real) or illegal. Rewarding a worker based on a systems performance without context is the shallow.

4). Your avocation for not punishing executives because you believe there was a systemic failure (multiple factors) does not excuse or prohibit the public to admonish the executives especially when these executives where at the source of the problem and a significant role in the the systemic problem, especially when their compensation is from public/tax payer funds.

We would be better off if these "quality" executives who ran this company into the ground actually did flee.

I get the point that it is not just Wall Streets fault., but the pain of recovery must be shared. The average person is already paying by losing our jobs, even the people who did not take take loans they could not afford. In addition to losing our jobs, we get to bail out the other factions that acted irresponsibly with our own money. Take back the bonuses any way we can. Let Wall Street share in some of the pain. At least the bonus babies will still have a job.

Just remember as much as we like to blame Wall Street, equally to balme are the politicians whom not once but multiple times gave this money to AIG with out any strings attached.

I believe if the corporations are to take pay cuts until they become responsible and profitable, then let us do the same to the leaders that we appointed. Let us insist on our lawmakers/ leaders to cap all of their pay and make them pay for their own health care until the our Nations balance sheets start swinging the other way and then balance.

I know a few of these Wall Streeters and it has always baffled me that they make so much money. They certainly are not geniuses. I think the argument of best and brightest is weak. Maybe a systemic overhaul is the best course of action. Sure a lot of people will flee Wall Street...good riddance! Time for them to come back and work for a living.

Your point that the bonus's may be legally binding is valid. But your article promises nuances and barely scratches the surface.

You touch on but do not delve into the concept that bonus's are not appropriately handled correctly in the financial world. You start with the concept that workers take a small salary and if the firm does well get merit bonuses and then divorce the firm doing well from merit bonuses. This is ridiculous and goes to the heart of the issue. Their should be no merit to these "experts" in their field. They risked the company and lost. They shouldn't have been allowed to do this by the board, however, if they had done well, they would be rewarded. How is it merit if they bankrupt the company and still get merit pay. As you point out, bonus's have just turned into a cute trick at deferred compensation to keep employees from leaving before bonus time and make it sound like they are not getting large salaries. If you believe this than address this issue, don't avoid it.

The login is absolutely stupid...if the exec's left how could they have left the company worse than it already is?? How can you do worse than losing 100 bbillion dollars in a year?? Get real...bringing in new "qualified" people would have been better for the health of the company going forward.

Thanks much for your perspective. Regarding the "contractual obligation" argument, I wonder why we these contracts are sacrosanct, but corporate employee pension and health insurance obligations are so easily dissolved or "restructured" (e.g., Enron and many, many others)?

Good article. It was interesting to see at least a little bit of the otherside in this discussion.

This is an interesting choice of words, and it's why most are not satisfied with your explanation:

"Boards of these firms rubber-stamped compensation packages that were astronomical and didn’t appear to understand that risks that underlie returns"

They didn't APPEAR to understand? In other words, they did understand, but chose to ignore it. This is why Wall St. is the scapegoat. Do you expect anyone to believe that these folks, with their 'umpteen' years experience, couldn't see the incongruity?

Very articulate. I do see your point about the bonuses and the contractual 'obligation' on them, BUT, I think as an owner of the company (it appears that taxpayers own 80% of AIG now), I should have a say in whether bonuses should be paid to the very people who made the poor decisions that resulted in my having to bail them out in the first place. At the very least, we could simply include a pink slip with the bonus and hire a 5th grader to replace these 'brightest & best' in the industry.

"no one should make millions in bonuses" . . . scarier words you will not find; somewhere Karl Marx is smiling. I hear Albania is nice this time of year.

Jill,
thank you for providing the "other side of the coin". While I understand about bonuses and deferred salaries, I can't agree that they still should have been paid. If the "bonus" portion of their salary was really not a bonus, then I think they should be entitled to it. However, if the bonus, is as I suspect, something that really is based on performance, and normally paid in normal years, then for 2008, which was an abnormal year in all manners of calculation, then the bonus should not be paid. And, if this money were related to retention, why in the world would you want to retain the people who drove your company into the ground? If AIG will hire me, I will promise to drive them into the ground for half of what the last guy did.

I take complete exception to your statement "We got into this together and we will emerge from it together". I have been hearing a lot of this recently. It is nonsense. True – a lot of people's boats rose as the water level rose but I did not get into this and I know millions who did not get into this. So, stop making such generic statements and I have absolutely no sympathy for wall street now. If these people knew what they were doing (other than raking in the money as long as the party lasted), we would not be in such deep mess. So, let these wall street execs keep their chin up and take a couple of shots. Ofcourse, I have not seen that happen either.

The wall street constructed some ridiculous rules to benefit themselves. When they use tax payer's money to follow those rules, it is simply fraud. Mrs. Schlesinger forgot, or chose to ignore, that those pay structures are constructed by the wall street to benefit themselves, so that they could take on un-reasonable risks. It the bet works, they take bonus. If the bet fails, they hold the public hostage and take the bail-out money. They KNEW it would happen because they've made themselves "too big to fail". There is no "risk" to them left or right.

Mrs. Schlesinger, you may say "the rule is the rule". I say the fraud is the fraud.

what is this.

"We got into this together and we will emerge from it together"

Who are you kidding. 80 % of the population has done nothing but worked their butt off to pay their bills and save as much as they can into a 401K so that they will have some kind of retirement savings. They are stuck in an economy created by who know who that requires them to spend every cent they make so it does not go under because we have outsourced all of our manufacturing jobs and know how to other developing countries so that we can create a ficticious economy based on skimming a few extra dollars off of each part sold and thereby forcing out of buisness companies the stay in America and stores that sell their products.

What is the payback.

1% of the population has gotten rich and left the rest holding the bag. Not only have they taken us to the cleaners but they stuffed our noses in it by cuasing so much havoc that our 401K loses approach 50-60%. There is no social security because we all know that they raised the soc tax in the 1980's to cover the baby boomers and then proceeded to spend every red cent and replace cold hard cash with a worthless IOU. Why are they worthless. Becuase there are 11 trillion of them now and 15-20 trillion in a couple of years.

Guess what, there will be anarchy soon. Why, because we all know that the stimulus will be used to pay for goverment workers to keep there jobs and make their retirement payments.

Trust me, in 10-20 years when only goverment workers have a pension and health care and everyone else is scapping by there will be a roar that will consume this country.

Coming from someone who left a hedge fund because of the rampant greed, dubious practices, and cloak & dagger shenanigans I have to say that is some load of crap she's spinning.

I find it remarkable that she attempts to characterize $100, 000 per annum as a very low salary. I'm sure the robber barons agree with her but my stomach turns to hear such a ludicrous justification for such reprehensible actions. AND, she then tries to blame the dealer for the gamblers gaming the system.

Her argument regarding the government’s concern that AIG be able to retain their "best" employees is even weaker – is she referring to the guys in the corner offices who let this CDS exposure drive their company into the ground?

It really does seem that the bailout is a complete clusterf*#^ and that letting this company go into bankruptcy was in fact the best solution in for no other reason to change the mindset that these knuckleheads are owed this "legacy payments." Having said all that, Ms. Schlesinger's defense shows a fundamental disconnect from the general public's view of honest business practices and proves she just doesn’t get it. The wild wild west days on Wall Street are over.

The reality is that the government gave away lots of tax
payers' money without accounting for its use. They should
have specified what the money could or could not have been
used for.

Ms. Schlesinger,

You hit a good point here, a legacy bonus. Hard to argue against that one and still maintain the sanctity of our legal contracts. If that is indeed the case here, what is the duration of these deferred payouts? I know of folks taking 10 and 15 year deferred payouts. If that was the case then the performance is less tied to the current environment. However, if we are talking a 2 year deferral, then actions and results are more easily tied together. If instead this is the case, you still have significant public disapproval and a much harder time unlinking performance and incentive. We are at a cross road for contract law. Union leaders are being forced to change their agreements, home owners are being offered the chance to alter their contracts, but AIG employees are able to hold their contracts sacred. Someone needs to blow the whistle, this game needs to stop, and we need to write better rules for going forward.

As I sat down to write a "wait a minute" comment on the AIG bonus payment outrage, I came upon Ms. Schlesinger's commentary. Finally some calm. The judgement of AIG is suspect in many ways; the PR is atrocious. Some "before the falls" announcements and public appearances by key AIG officials would have reduced the heat. As a result of this neglect of public reaction AIG has become the code term for the whole ecnomic debacle. Jay Jarrell

Sorry Jill, and sorry to use the name Anon. But I was, over a decade ago, a middle manager at AIG in particular position to observe the company's many complex operations. AIG even then had a culture of selfishness and corruption. It has nothing to do with complex compensation schemes. The ethos in that company was always "I get mine, and screw you." Even when it came to paying claims the company had an unspoken policy of rejecting three times in hopes the claimant would give up in frustration. Executives in various division rerouted money to up their bottom line to "earn" unwarranted compensation at the expense of shareholders. You might be right that not all bonus based comp is evil. But defenders are dead wrong when it comes to AIG. It was always corrupt and I saw it first hand.

I am personally sickend by these bonuses, I am a middleclass , middle aged , single man earning less then 38,000 a year. raises and bonuses are based on performance. AIG lost ...... how mush in the last quarter of 2008...... there should have no bonuses for poor preformance. Those people still got a large wage and health bennifits. and let's tose in the fact that I also went over two years with out health insurance . which i have had now for about 1 year. at that time I was able to see a doctor and was diagnoesed witha cronick illness. medication runs about 2600.00 a month. you do the math. with out insurance what would someone do........... die......... so please before you defend bonuses like those think of the people you are reporting that too.

Alesia said "...no one should make millions in bonuses." The question is do you want to live in a free market, capitalist society or do you want to live in a communist or socialist society? In my opinion, people should get paid what they are worth to their organization. If I make my company $10 MM and they want to pay me $3 MM, who are you, Alesia, to say that they can't?

Look, I get it. It is certainly bothersome that a company, that would otherwise be in Bankruptcy and unable to pay salaries (let alone bonuses) to their employees, is paying out millions in bonuses. If you want to argue that the government should have just let them fall into bankruptcy, liquidate its assets and whatever the impact on the rest of the economy – so be it, that is your right. But, if you put yourselves in the shoes of XYZ employee who can get paid $3 MM on an open and free market and has an employment agreement or contract with AIG, what do you want him/her to do? If AIG can't/won't pay, XYZ would go to another company. If AIG doesn't fulfill its contracts, XYZ might take legal action against the company. The politicians are getting a lot of mileage on this one and it is possible that there is some fraud or malfeasance burried within this issue. However, it could also be just part of the business that is necessary if the company is going to continue as a viable going concern.

This article first explains discretionary bonuses that evolved into deferred pay, but then says the AIG situation is different because AIG was contractually obligated to pay these 'bonuses'. Were the AIG bonuses not linked to any individual or company performance objectives at all? If the AIG bonuses were not descretionary, then why isn't this compensation included as salary? Something is still very very grey here.

If bonuses weren't paid, then AIG would lose some good people. So what? I hear there are tons of good people with finance backgrounds looking for work right now. I bet they'd be willing to take some of those jobs just for the salary.

Sorry, I still cannot subscribe to ridiculous amounts of money being handed out – this includes actors and athletes and TV personalities and corporate moguls. If you work for yourself – great you get your earnings. If you work and it derives so indirectly from other's money, then there has to be limits – or very high taxation – take your pick. The excuses are to keep people or executives – well I for one have seen too many executives still employed while almost gleefully enacting large layoffs. At least some in the acting arena spend time when not making shows or movies doing something responsible like bring awareness to the Darfur outrage.

Of course Jill Schlesinger supports having the bonuses paid...she probably get's paid as a financial advisor by at least one of them.

I have no problem with people receiving deferred compensation based on their performance and not that of the company. However, I do have a problem with the mayment of deferred compensation or bonuses when the company's overall performance is so bad that it would have folded without an infusion of cash from the government.

If the government had not stepped in and let AIG fold, would the recipients of this deferred compensation received a dime?

AIG should have been, and still should be, liquidated.

I get the fact that "Jennifer" expected the extra $200,000....I "expected" the money I had in my 401K for retirement......sometimes we don't get what we "expect"....and everyone needs to just be disappointed? The difference is that "Jen" won't get the new car and I'll be in a trailer "down by the river"!!!...........
But "Jennifer" is not the real problem...she probably did what she was supposed to do for her $300,000. My frustration is with her boss who didn't do what he was supposed to do, got a few million dollars, and then just left the company (according to Cuomo)....tell me why that is OK...........

Point #1: One of the reasons the CEO gave for paying these bonus was to retain "the best and the brightest." Please. These were the same people that got AIG into this mess to begin with. You really want to keep them? The problem with Wall Streeters is that they get paid bonus - win OR lose. I can't imagine that in their compensation packages, there isn't SOME form of performance requirement. If there isn't, the board should be fired, too. That would have been the "out" in this situation. How can ANYONE justify paying ANYONE who helped bankrupt the company– and potentially hundreds of others with it? You can play out all the "sophisticated" arguments you want, but at SOME point, common sense has to be a factor.

Point #2: What would AIG have done bonus-wise had the federal gov't NOT bailed them out? What then? That should be the benchmark.

Could unwinding derivatives really be all that hard? I have a Master's degree in electrical engineering and fifteen years experience, and I don't make near the amount a junior employee of one of these financial services companies make.

I don't get it. Will someone please remind me what valuable services these companies provide (any financial services companies)? What do they do? Create structured investment vehicles? Invent collateralized debt obligations? That helps us all how? All I can figure out is that the financial services industry allowed a very small group of people to get fantastically rich at the expense of all the rest of us.

If I could give one piece of advice to an AIG employee (of any financial services employee) it would be - Quit, and do something useful with your life. If you are really smart, put your mind to work on a trying to cure cancer, or invent a new energy source, or new farming technique. Learn science, engineering, or medicine, or anything where you can be a benefit to others. Stop chasing money. You'll fell better, and society will benefit as well.

What Ms. Schlesinger's "grey area" analysis fails to address, however, is the standard OP's followed by the boards of larger companies – that is – controling the shareholder vote by proxy, or by already owning a controling share in one of a hundered different ways.

I agree that pay should be regulated by 1) the market, and 2) performance, but what if the market is a false market, or a manufactured market? The larger systemic economic problems aside, one only needs to examine the pay trends of executive pay to see that greed is an issue (albeit a smaller issue than many belive) that must be covered.

I understand the point about bonuses, yet no matter how you want to paint this picture– taxpayer dollars are paying for compensation of many individuals who made bad decisions.

There is this 'ivory tower' perspective at work here that suggests that the rest of the public doesn't understand this arrangement. Nonsense.

It is always important to hear both sides of a story. If the company was contractually obligated to pay the bonuses, then paying the bonuses was the right thing to do. I am not convinced that accepting the bonuses (on the part of the employees, especially those who knew they were about to jump ship) was also the right thing to do, from a moral standpoint. If the company that I had helped run was sinking, and I had already been paid millions of dollars in compensation (which the majority of people in this country will never earn), I might just make the decision to say no to the bonuses in the current economic climate. You mention that many Wall Street employees took large cuts and I find that very appropriate.

Good governance and risk controls are certainly important, and much of my anger over the situation does have to do with the lack of them. The Clinton and Bush administrations got that wrong. However since the majority of Americans will never, ever make salaries on par with what is being discussed the in the media with respect to this crisis I find the issue of what you have called "class warfare" to be relevant to the discussion. I agree that it was not only Wall Street that was greedy, and the fact that the greediness is so widespread upsets me too. However, the fact remains that there were far too many decision makers/top executives who were making shortsighted decisions that they knew were not only bad decisions but dangerous ones, and raking in millions in compensation at the same time.

There are many, many of us who are stuck in the middle of this mess who did not forget the simple rules that we learned from our parents, who didn't buy more house than we could afford, who did save, who weren't greedy, and yes, we are angry that we are in this mess along with everyone else. We are very, very angry about the greed, corruption, poor decisions, poor policy making, and shortsightedness that has landed us here. It's time someone stood up, took responsibility where appropriate, and (gasp) gave back some of their ill-gotten gains.

Why don't we have wallstreet live by the rules of capitolism like the rest of us? and...what's so bad about populism? Wouldn't it be best to have the American Gov't favor the needs of the most Americans.....for a change?

I'd rather buy a suit from a guy on salary as compared to a weasel looking to score "deferred compensation". The whole system is broke and AIG, and everyone else, is the big loser.

If you do a little research you'll find out that AIG was founded by Ken Starr's uncle. Yep that Ken Starr. You might recall that he had no qualms spending millions of taxpayer dollars in the 90's going after the Clinton's over Whitewater.

To congress I say go get them.

I totally agree with the comments of Colin Heichman. Whether you agree with Mr. Mack or with Ms. Schlesinger or neither, the conduct of Mr. Mack was appalling, direspectful, immature. And Ms. Chetry made no effort to allow Ms. Schlesinger an opportunity to educate the audience.

And to Ms. Alesia Wells, you should have gone (not went) into Finance. If I were you I wouldn't boast about being a college graduate.

If AIG tanked at the end of last year ,why did they get bonuses? if bonuses are based on performance. I don't get it

Your example of Jennifer receiving $100K base and $200K at year-end 'if she did her job', is just pure nonsense. Any ‘target comp’ has to [first] include that the business unit makes its 'target profit' or there is no bonus. I have worked in corporate positions for many years and have always had that caveat applied to my bonus. Without tying bonuses to profit targets, you get what AIG got…plain nonsense.

When you are coerced to pay people to help you get out of a mess that they themselves created, it is called blackmail not bonuses.

The other way to handle these people is called plea bargaining. We threaten to lock them up in jail unless they correct the mess they got us into in the first place.

Americans do not have a problem paying bonuses to people who create wealth or who are exceptional in their field and where we find value.

Americans have a real problem paying bonuses to people who are really crooks and incompetents.

This is pure bull!

Class warefare was started by the greed of wall street and so called "financial planners" such as yourself and others who still don't appear to understand the fundamental problems in the economy. Your ilk have been taking a disproportionate share of wealth from the middle class through clever manipulation of the financial systems and lobbying power for a number of years. Now your greed, stupidity and poor "financial planning" advice have wiped out many retirements, all the while insisting that they should take more responsibility for it. How dare you accuse them of class warfare when the likes of you started it and continue to wage it to their detriment.

The salaries, bonuses and compensation packages on wall street are grossly disproportionate to their worth. Only because of the Congress, White House, US Treasury and the FED's enabling of leverage and backing of these institutions could they exist. So, it is the taxpayer who is making their jobs possible in the first place. Why pay their exportitant salaries for such a priveledge and sweet deal?

Lastly, the dumb implication that they will go elsewhere, if they don't get their bonus is absolutely insane. Where are they going to go? Bear Sterns? Lehman Bros.? I am sure Bank of America would love to get these failures.

What garbage.

Bonuses not tied to profitability? A company needs to be profitable to continue in business. A company needs its employees to make efforts, that is successful efforts to make their company profitable and that is where the bonus is supposed to come it. The bonus is the carrot for the employee to motivate them to work extra hard. To suggest that a bonus is in place with no correlation between the employee's work contribution and the company's positive bottom line is insane to say the least. Whoever thinks that bonuses should be in place irregardless of profitability is the manager of a failing business – gee that a surprise!

What a crock. Mrs. Schlesinger, you state in your piece:

"Yes, the second part of her pay is discretionary, but in most years, as long as Jennifer performed her job and her business unit did its job, she would earn $300,000."

I think we can agree that 2008 can be characterized as NOT in the "most years" category. Therefore, the firm should not pay out discretionary bonuses. Period. The game is to socialize losses and privatize profits. You are shrouding that time honored tradition with your disingenuous words.

In bad times the financial community looks for a bag holder to hold the bag of losses. Once again it is the American taxpayer. Shame on you for perpetuating this immorality.

Americans have no basic problem with people who make a TON of money when it is based on profitable, ethical, enterprise. But when a company requires taxpayers money to keep it from imploding, the company's employees need to suck it up. Regular Joes get laid off in similar situations. I don't see you writing pieces about how they should not be downsized.

Why is that so hard for you to fathom?

So Ms. Schlesinger, was the TON of money these people made over the last upteen years REAL? Or just a cooking of the books so a couple of hundred crooks could make a KILLING on their "retention" bonuses. Interesting that 11 of the top 73 bonus receipients at AIG no longer work there (reported at 11:00 AM PST). Retention Bonuses....another lie people like you perpetuate. If these were the "best and brightest" people and they got AIG into this terrible mess, they are obviously not the best and brightest. Give me the dumb ones and let's see what they can do. Apparently monkeys throwing darts at a stock board do pretty well in the market....and they work for banannas and peanuts.

Come work for my company. This year we have
1. Forfeted all 401K matching funds from my employer
2. NO overtime....NO question! That is how people that do REAL work earn extra money....not on the backs of taxpayers
3. 10% pay cut until at least 3rd quarter....NO exceptions!
4. Hiring freeze. Just so you can understand, that means we all have to work harder (without overtime) to do the job, because we are not replacing positions once someone leaves.
5. Cut dental coverage from our company health care plan
6. NO BONUS for 2008 work.....even though I put in 2380 (300 hours of OT) hours last year for my company...which is still profitable.

Until you get your MBA behind out of your chair and come see what it is like to actually make and produce something (do WORK) for a living, go take your bonus and stick it where the sun don't shine.

They tanked their company, therefore no bonus. Bonuses are for top performers, that's why they're called bonuses. How hard is that?

Jill's comments are just a wee bit off, and sound a bit like renaming something to redefine it, and then redefining it to establish what rules to "play" by. And before you skim the rest of this, let me say I supported the bailout in hopes it would prevent the loss of thousands upon thousands of jobs, both directly and indirectly. Now, I'm not so sure it was the right signal to send.

Jill makes it sound like the cash and stock "bonus" that wasn't was due the employee for signing on. Yet, she says it depended on the individual and their unit "doing their job". Was part of that job financial meltdown? I don't think so. Part of that job was successful (profitable) management of the investments. Surely the employees at many levels shared some of there responsibility for the (ahem) lackluster performance at AIG.

The number of shares in stock that tanked should not be increased to account for the drop in value, nor the stock be replaced with cash. If you accept a stock option as compensation, that is part of the performance-based risk you sign up for. If the cash portion of this "deferred compensation" was also performance based, there is justification for reviewing the performance and adjusting the compensation accordingly.

If, however, AIG is simply paying out the money, their actions imply they believe they and their employees bear no responsibility for the loss in corporate value, which is nonsense. It makes it seem as if business as usual is to assume nobody did anything wrong and everyone BUT the taxpayer should be made whole, as long as taxpayers can be bled. If this is AIG's corporate attitude, then perhaps the company SHOULD be allowed to collapse or become wholly owned and controlled by the government.

There are going to be some fat cats who skated away with huge lumps of "deferred compensation" funded by tax dollars. The stink this creates could reshape the industry, one way or another.

I went through simular situation in the airline industry. Remember we (the airline industry) was in this resusion back in the 90's. At that time the employees, were asked to take cuts in pay and benifits all to make a profit for the stockholders and keep the airline in business. Because it would help a great deal the sr. officers in the company were given hugh bonuses. When questioned we were told that was to retain these talented people. My question always was; "if they are so talented, then how did we get in this mess to start with? They must have made a lote of mistakes with the handeling of the money we worked and earned for the company." I have neve recieved an answer.

If the AIG exectives were doing their job and deserved a bonus, then the company would not have needed a bailout. REMEMBER, BONUSES ARE EARNED, NOT GIVEN.

I don't think anyone would disagree that there were a number of participants who made the financial meltdown possible. However, when a public company has to turn to the government for a bailout to continue operations, it's no longer business as usual. When a startup company is running out of cash and needs a white knight to come in with additional funding, the last money in dictates terms. The US taxpayer is the white knight and we should be wielding a big stick to change how failed companies are operating. You can call it populist anger. I'm calling it smart venture investing.

Ms Schlesinger:

This post and your appearance took great courage. While I am very, very impressed with your candor and the clarity of your example, I just have a question: what took you so long to speak up?

I completely understand this crisis is not a one-person show; nor do I believe everyone is guiltless. But an honest, clear explanation of the workings of Wall Street and its ancillary industries would be extremely helpful for the public.

I didn't see your appearance and based upon the comments and your reaction, I'm glad I didn't see it – I'm tired of the shouting. We need discussion. It may be rancorous at times, but a good host knows when to rein it in (Ms.Chetry – you should be ashamed, if these comments are correct). Thank you for your explanation, but moreover, thank you for your courage. You should change the title of your next interview/segment and call it "Explaining What Goes on Behind the Curtain."

AIG is not responsible to the shareholders. It is not responsible to the government because it is not nationalized . We won't under capital system. Our congrss is very stupid not to put any strings when bailout is given out, AIG can do whatever they want, whenever they want. We have to blame ourselves having crazy system.

What about the 500 FEDERAL PENSION MILLIONAIRES retiring EACH DAY!!??
Somebody look at what FDR did re: Fed pay – Obama did it on his staff; where is the Public employee union stance on this pay/pension boondoggle?

When will the real discussions start by the mainstream media?

Tax the bonuses back to the taxpayers. Simple.

Mrs.Schlesinger's title explains her position. She is a financial advisor and as such has a vested interest in the status quo on Wall Street. An amazing number of people make their living by doing nothing but essentially playing high stakes Monopoly with other people's money. The power to set your own salary has naturally fostered greed and corruption. The American people have allowed it to happen by refusing to question the regulators, board members and "advisors".
The situation will probably not change even in this environment but now that people are aware of how useless and powerless these people are, we will at least look over their shoulders from time to time.

It's not that complicated. If it were not for the taxpayers, there wouldn't be money available to pay these bonuses. We should honor those who come forward to publicly renounce and return their AIG bonus checks as a patriotic gesture. Maybe then others will follow by example, demonstrating that they know right from wrong.

Good argument about deferred comp- here's one for performance based comp that I think holds water as well...

Let's look at a hypothetical situation:

IBank & Co loses $20bn in 2008 and gets $10bn in bailout funds. Imagine there is a brilliant trader at IBank & Co named Joe, and Joe's trades earn $300mm dollars for the firm (definitely not unheard of). For his efforts, Joe is granted a bonus of $10mm (also not unheard of).

Is that outrageous? I don't think so. Why not? Because if Joe didn't do his job so well, IBank & Co would have lost $20.3bn and would have needed $300mm more from taxpayers...

Think about it- if we could spend $10mm to save ourselves $300mm in bailout funds we'd do so *immediately* or we'd be crazy. It'd be the best return on "bailout" investment imaginable...

So here's what happens now... IBank says "sorry, Joe, we can't pay you this year- people would go crazy." Joe says "OK, well then I'm outta here to go start my own hedge fund that is not regulated." The 2nd string replacement brought in for Joe does not perform nearly as well and IBank & Co's needs another $300mm to cover his losses. At least that greedy bastard Joe didn't make more money than all of us!

We humans are sometimes pretty irrational... Check out the Ultimatum Game - http://en.wikipedia.org/wiki/Ultimatum_game. We'd rather lose $2 than see someone else make $8.

Here is another example of spin masters making elaborate excuses to cover up the plain and simple facts, ie GREED. It just goes to show that Wall St. nor our politicians can be trusted to protect the common people while laws and regulations ( or lack of ) is dictated by the wealthy corporations. Do our elected officials expect us to believe they look out for us when the big money lobbying firms are the major donors to election campaigns? Yes, they hope we don't notice while they pontificate the benefits we supposedly derive from their actions. The majority of Americans were against the bailouts, yet these elected representatives served their benefactors instead of the people they were elected to serve. Karl Marx was wrong!! Political double talk is the opiate of the masses. And I'm sure the politicians and CEOs want to keep us as sedated as possible while they ruin this once great country.

I think the bonuses should be paid if that was in the contract. It is not anyones business to intrude into the employee records to review performance, payroll and other records. I am sure these people were given direction from Execs on the investment choices of the company.

Are we not supposed to be stimulating the economy anyway!

These people both US politicians and wall street executives should face trial for the fraud they have committed with the "people's" tax money. If a normal citizen (taxpayer) failed to miss just one year's worth of tax liability they would be jailed; why i ask aren't these people held to the same laws and justice? I hope washington smartens up soon before we the people have a revolution and ouasts them from their positions. Americans (citizens) have had enough of the lies and deceipt that is Washington politics, give us a government that supports citizens not billionare agendas and bailouts.

Well each group involved has to pay the price.

As an investor who did not play my role I have lost money, as a tax-payer who failed to hold my representatives accountable I am commiting to huge sums of my future income for the recovery effort, some politicians have paid the price and more will pay in the coming elections, home owners who borrowed beyond their means are paying their dues.

Now my question is, when will wall street people pay their dues ?

Mrs. Schlesinger,
With power comes responsibility. Power is not only governing but also the power of wealth, money etc. These big-wigs at wall street had that power. Of course, when you earn in millions of $$$ that means you are expected to be way more accountable than an ordinary human trying to get by day-to-day's expenses. A part of that accountability is not only doing the job right in letter but also doing it right in spirit i,e., ethical. You can argue that there is no way to quantify the latter. But as you indicated, we are adults and no mature adult needs a lesson or advise on what ethics mean in his/her job.
You said right, we are in it together and should get out together. Absolutely right, the ordinary human has already taken his tab for the amount of damage he could have caused with his meagre if not miniscule reach into the economy – read – layoff, loss of home, expense cut down etc. Its only reasonable to expect that the other side, that is the big-wigs who had more control and bigger contributions to creating the mess, take commensurate blow to their fortunes as well. And giving up a bonus is not at all commensurate, its just a starting point for whats expected out of them.

Thank you for some real journalism. It is important that we think deeply about the issues, as we try to navigate through this crisis. Ms .Schlesinger has written an excellent article, pointing out what we hopefully all understand – if and when we cool off a little. The issues involved are somewhat more complicated than soundbites can capture. Thank you for generating thoughtful disussion.
That said, I personally believe there is need for careful consideration by AIG here. Maybe the "bonuses" are legally binding, but as we say things like that, we are perhaps losing sight of anonther important issue. AIG uses words like "legally" and "business", but I have not heard the word "ethics". It is illogical, and possibly unethical, to have such bonuses paid out in a situatoin where the company could have failed, and left the employees with nothing at all. In the final analysis, the situation is bad. How can anyone justify a $300,000 salary/bonus/whatever under such circumstances, when indeed, some of that money is coming from those making only $35,000 / year?

While I recognize that wall street pays bonuses based on performance it is not an unreasonable leap to assume that had "Jennifer" as well as her co workers done a really exemplory job the firms like Lehman, AIG and Merrill would not have failed. Being that they did fail this year with AIG posting the largest quarterly loss in corporate history, Lehman falling like a house of cards and Merrill being saved by another ne'er do well in BoA it is safe to assume that Jennifer and her co-workers did a less than adequate job.

Looking at AIG, a publically traded INSURACE company (not an invesment partnership) they made bad bets on a product that was invented by someone who never even worked for the firm in Blythe Masters. It is a fact that these contracts are negotiated in a back room out of the light of day and not subject to regulation. Well in my mind AIG has changed owners. It is no longer owned by its shareholders but by the American taxpayer and as such I would hope that the AG of NY takes this into account when going after that money. If AIG wants to form a bonus pool then let then include the 100 million American workers who kept them in business and pay them 1 dollar a piece. The outrage is only beginning to bubble up here on this one and there is a sense that the people will not stand for much more

Wher is the outrage at Bama, Geithner, Frank Reid Pelousy who

Well said Ms. Schlesinger.... We are wasting time arguing the subject of pre-arranged bonuses that were negotiated as part of a compensation package (something which happens even at a VP level on Wall st.) well before -- hit the fan.... There are many people that work on Wall st. who can no longer afford their children's college tuition, credit card payments, mortgage etc as a result of their cut in bonus. In this instance these people relied on their bonuses as part of their total compensation. For example I have a friend who is Director at a major firm. Base salary is 125K her bonus for past 6 years has averaged 125+K. She lives like a woman (single parent mind you) who makes a salary of $250K. Keep in mind she's a Director of a major firm, works from 7 til 7 everyday and plays a major role at her firm. She has just suffered a 70% cut in her bonus. I know people reading this right now might say, " yeah well she makes a lot of money she can afford it or worse yet, that's what she deserves..... but does she really? There is a big big difference between these discretionary bonuses and the AIG issue. I love our President Obama, maybe a little more than the next man/woman, but I think even he's getting this a little twisted!

Jill,
have you ever worked for a company that folded? You are lucky if you can get the personal stuff out of your desk, much less a multimillion dollar bonus.
AIG folded, except that we bailed it out. These 73 bonus recipients were unemployed and walking away with NOTHING if not for the good graces of the American tax payers.
If you really think these people deserved the money, why don't you publish each of their names so that we taxpayers can congratulate them ourselves?

In your example about Jennifer and her $300,000 total compensation package you state that $200k is discretionary based on her performance. Since AIG was near collapse, how can they justify giving bonuses based on performance to anyone in the company? If the executives had done their jobs properly would AIG still be in such a precarious position? My guess, is that it would not. Therefore, they did not perform the duties of their position and should not be paid the bonuses.

The word I'm having trouble with is LEGACY. It's the cultural LEGACY of Wall Street and the rest of the players (correctly) mentioned that got us into this mess. How is it possible that LEGACY thinking is going to get us out of this? Look, the argument to pay huge sums of money when times are good is that the employees "earned" it – if you don't believe them, just look how well the shareholders have fared in the good years. So when the shareholders see half of their wealth disapper, then why does this LEGACY thinking still apply? Sorry, new problems, new solutions. Lots of employees thought that their bonuses and 401K matches were secure based on LEGACY thinking, but that seems to have gone up in smoke, for now.

Thank you for your analysis, but some of the blame should be shouldered by both the current and former adminstration. The bonus pool of a company is approved by the board of directors before being paid. As the taxpayers now "own" a major stake in several companies we should have had someone from Treasury or their represestative on the board to have stopped this!

If we "own" these companies then we have the responsibility to act like it.

Bottom line, we the People own 80 percent of the company, not only should there be no bonus for anyone, including the executive who approved the contract for these "employees", some of these executives should go to jail.

Thankfully, our AG, Andrew Cuomo is on the job, I hope he can not only stop the stupidity, but look for any way to prosecute the greedy executives at AIG, especially since we have now learned many of the recipients of our largess left the company.

The next step is get rid of Geitner, we just learned who has his loyalty, Wall Street and big business, because he didn't say one word about this abuse! Yes the Bush Administration is to blame for creating the monster without having any oversight or say about how the money is spent, but now we know we cannot trust Geitner either.

Off with his head, to quote the Red Queen in Alice in Wonderland.

Your example is a tad misleading. I don't think what people have the problem with is the people making the extra 100k they were promised in pay. It is the 73 people that took home over a MILLION taxpayer dollars each. The top payout was 6.4 million! How is that justifiable? It would take me 128 years of working 50 hours a week to make 6.4 million, and I make more than a lot of people.

I think it is time for people to realize being a "rabid populist" or a "socialist" is a hell of a lot more American than excusing execs who run a company into the ground then leave with millions in compensation that was probably borrowed by our government from a foreign country.

The concept of a bonus or deferred compensation (a rose by any other name) is supposed to be pay for performance. If everyone 'did their job' as Ms. Schlesinger argued, then how does the company end up in the sorry shape it is in. When you take a job for a company, it is understood that anything beyond the base salary is based on personal performance AND how that refelects in company performance. You wouldn't pay a bus driver extra money for skillfully driving a bus off a cliff. How is paying AIG staff money for driving the company into the ground at all logical? Like the bus that went off the cliff, they had time to see it coming and get off. If they chose not to, they do not deserve extra compensation for failing to get off in time. Such is the risk of employment in the private sector. Just another example of this culture of corporate entitlement that has grown out of control in the US.

This commentary is ridiculous. No matter what you call it: "a bonus" or "deferred compensation" - in no other industry are employees paid astronomical amounts for doing a crappy job. No matter how you slice it, these folks made bad decisions while in positions of power and trust, resulting in bankruptcy. They should be subject to the same cuts in merit pay, bonuses, etc. that many other businesses and employees have been subject to in this poor economy . . .if not worse.

well-said...
too many people are finding scapegoat for what had happened.

My comment to the article is ti is bull crap. Under the example the woman is making $300K because she is in such a lucrative and nich industry. She is not and one fails to consider that this industry is in no way better serviced on New York than in London or Tokyo or anywhere else where the financial industry proliferates. I
n fact this is purely a product of the greedy on Wall Street as some form of acknowledgement that these people perform a job function that is so unique as to deserve these high salaries. Bull Crap. In fact this last year has told us they are not smart or do they really factually understand the industry they service. One last comment. My brother in law is a broker on Wall Street working for Morgan Stanley. He gets all his lunches catered in to the office from some very expensive catering services. In addtion he gets the top sports tickets and concert tickets as part of his perks. He also is way overpaid based on his BA in Business from Fordham. It is all about who you know on Wall Street and not what you know.
That is and always will be the case.
Ray on San Diego

It's easier to demonize – we are very proficient at that. Instead of solely blaming greedy Wall Street, why do we not blame inept Congress for drafting a bailout bill that did not make transparent where the money goes and that it could NOT be used for bonuses.

I've read your defense of wall street (and AIG & Merrill's) bonus arrangements and just don't buy it. I'm one of those kids of depression era folks who indeed has saved prudently all my life.
I've known at all times that my comp/bonuses would never approach
that of my buddies up in wall street but accepted that fact because i love what i do. Lots is said about performance driven compensation up there but frankly not a year goes by in my memory when scads of goldman sachs types, including 'also rans' if they have such types, don't get millions and millions in bonuses. Fine, that's the culture up there, cream off the top. But here we are, taxpayers, putting up a very expensive safety net to sevral outfits, AIG one of them , that would go down the tubes without our tax money. And what does their management do, but dig from the taxpayer's trough, to reward abject failure. And the process will surely dilute my retirement savings at age 65. you know what I'm talking about. We need a BIG change in attitude up there (everywhere really) or we're doomed to repeat. Asia is alughing at us, also fearful that their float (Treasury paper) will lose value......when do we wake up and pull together as the President urges us to do ?!

Deferred compensation, okay. We will defer this compensation until the companys' performance is such that it can afford to pay out the deferred cpmpensation out of it's own fund. Or they can receive their "deferred compensation" in the line of stocks, that can not be sold, thus giving them their money based upon performance of the Company. Bottom line, you did good, the Company did poorly, guess what, you get to wait for your "deferred compensation" until the Company turns around.

Other alternative, we are having to release a bunch of executives who did great jobs in a failing company that no longer can afford to support them. Don't like it make a claim to the State Department of Labor for failure to pay due income and see what it gets you.

Good rational argument from the other viewpoint; and you are right that it is the function of free journalism to provide both sides to a story! However the various arguments still don't fly! This is not everybody's fault! This absolutely primarily the fault of greed by American Banking leaders! Yes--We do need to lay blame where it belongs; and not let this happen again!!
If your decisions are bad and selfish and greedy–your bonuses should go away! It is outrageous that taxpayers are paying for this!! This outrage is not only normal-it is what is needed for our country right now!

Recall, nowhere in the article are bonuses said to be performance based. Granted, they are discretionary, but she specifically states that performance has nothing to do with it.

It seems to me that bonuses are paid as bonuses and not salary because that money seems to be used to actually continue to make more money. At least thats why I think she brought up the partners example. Granted, that may just be the origin, but I wouldn't be surprised if it still played out this way to some degree.

Now you can argue that because the company was going to fail, that the employees in question deserve to lose 2/3rds of their promised money (going by that example in the article). And to be honest I can see that being a perfectly reasonable fighting point for the taxpayers bailing this out.

Granted, I can also see the people working for AIG then taking another job instead of keeping a job where they are working at only 1/3rd the money they could get elsewhere.... which is probably why AIG paid the bonuses.

One glossed over point in the article was that when this bailout went through, no one talked about compensation limits. People, particularly Obama and the democrats DID talk about limiting these types of things. However, I remember the reasoning for not including such stipulations was that you didn't want companies to say no to the money...

Ms. Schlesinger, Don't give me the "We got into this together ..." BS. All my life I lived within my means. Paid cash, didn't make extravagant purchases or go on expensive vacations, bought used cars, retired my mortgage in ten years by doubling and tripling up on the payments, saved constantly, etc. How am I someone who "got into this together" with all the people who were completely irresponsible and all the Wall Streeters who made stupid risky bets and ruined our economy ? Please write another commentary and explain that!

Bitter Medicine! We will undoubtedly hear about more money grabbing by execs as their ship goes down. It's not the kind of public spirit we expect form Americans in a time of Crisis. Let us not forget what the prevailing attitude of our financial world had become. "Greed is Good" Michael Douglas declared in his role as a Wall Street guru.

We know that Greed destroys! As we wallow in misery and scream out for revenge we become just as wrong as those who created this mess. We will survive , rebuild a better system and prosecute the guilty. Tomorrow will bring more news of individuals caught up in the self indulgent ethics of a system out of controll. Now is the time to keep a civil mind and fix the system for the future.

Point taken. But isn't the assumption that employees of AIG get a salary and regular "deferred compensation" if they do well at their jobs (meaning acting in such a way that at least doesn't put the company at risk). But the very department who took foolhardy and incredibly stupid risks resulting in loss that significantly contributed to AIG's current dire straits, and these are some of the folks who are being "rewarded" for their "work".

Here's an analogy: A worker at McDonald's doesn't stop working in order to put more food out (and hence making the company more money). But while he's doing everything he can to make the company more money, he willingly does not clean the exhaust hood over the grill. After some time, the restaurant burns down because nobody was taking care of important preventative maintenance (cleaning the hood), and instead were blindly making more money for the company.

Let me ask Ms Schleisinger: Does she think the subject employee deserves a bonus because they did everything in their power to make more money for McDonalds? Is the restaurant burning down because of mindful neglect of the employees' other duties justified just because that employee chose instead to maximize the company's profits over all else?

In other words: we're not buying your drivel. Quit the condescensing tone and just accept the fact that others in your profession royally screwed up and deserve what is coming to them. Therefore, Ms Schleisinger deserved everything she got this morning.

I have some advice for those in Ms Schleisinger's profession: AIM HIGH!

I'm sorry. Poor, poor AIG. I am a teacher who gave up 3 days of pay to keep the boat afloat through the end of the year. My job is tied to performance. I need to show that my students are making GAINS. Performance in a financial company should equal hard work and PROFITS. No profits, no bonuses, no "deferred compensation".

I used to have an AIG account. There had been no profits on my money there since 2001. In fact, between their management fee and their losses, I had less than I started with. Guess what, I no longer have that account. Why should I continue to support people who do not manage my money in such a way that I earn profits? AND WHY WOULD I WANT TO GIVE THEM BONUSES???

Am I angry as a tax payer that works hard for money on a daily basis, to keep food on the table and a roof over my family's head? You bet I am.

Are you kidding me. You just don't get it. There are millions of people out of work. Millions more who have lost their retirements. The people who are getting the bonuses are the ones who caused this with their greed. They are getting bonus checks funded by the people who they financially destroyed. How dare you say we were all to blame? The people who started this work for AIG, and are getting another pile of MY money. You say Congress and the regulators are to blame because they didn’t catch the greedy, irresponsible thieves at AGI, again you can’t be serious. President Obama can send the message that the American public would like Wall Street to get with an air strike on AIG headquarters. Maybe then the rest of Wall Street will wake up. The days of $6 million dollar bonuses for greed and reckless behavior are over.

Where is the outrage at the administration for giving away our money without any knowledge of how it would be used. Bama, Frank Dodd Geithner are all naive as hell and their spending our good money after bad and with no understanding or control.

Since the government is in a huge deficit cut their salaries Barry why don't you lead by example and take 100 instead of the 400 since the country is losing money and there is a crisis and cut all governement worker salaries and pensions.

I couldn't agree more with fellow commentor, Colin Heichman. As I watched this interview unfold this morning, I was completely astonished by Mr. Mack's inability to shut his mouth and act courteous, as well as Ms. Chetry's inability to control the situation. The whole thing was so ridiculous that I ended up turning off the program.
With regard to Ms. Schlesinger's comments, I really appreciate the time you took to explain how one little misnomer in the grand scheme of things can turn into such a controversy. While I may not understand everything about this situation, I do think that the blame is spread far and wide. We all have to shift into responsibility mode now that we've taken quite enough time complaining about how much it sucks.

The money given to AIG by Henry Paulson was to be used to provide solvency to the company, not to pay compensation to people who clearly did not earn any performance pay. What Jill is failing to say is that there is no way that any business unit could have been performing profitably when the company as a whole was losing billions of dollars. Greed turned capitalism into lust. The Reagan generation still exist aas the "me "generation. Getting performance pay for doing a bad job personifies stupidity. There can never be any justification for these people to take the money they did and tell the public to go to hell. This company is a monopoly on our economy and needs to be broken up like Ma Bell.

That's all fine Jill but I assume that the people in the know at AIG must have known that their business activities were eventually going to implode. They had to have known because they were AIG's "best and brightest". I am in the insurance industry. AIG's insurance components were, up until lately, considered very strong and have made vast fortunes for the company...and rightfully so. The employees receiving bonuses for those units deserve them as they served their employer and shareholders well.
The trouble with the current bonuses is these employees added no value to the company. They came very close to bringing us to a financial "China syndrome" and they truly should be prosecuted. Fired at least. I think AIG has lost their focus and core values and I assume their mission statement is "whatever it takes to make money and hose the public at any cost"

What? Do financial and political programs on CNN turn into shouting matches? Really?

So let me get this straight: you are trying to convince us that we need to feel sorry that these people at AIG (or other Wall Street firms) stand to lose $200k out of their promised $300k compensation? Because a contract says so? Because otherwise they will leave?

No, No, and No!

See, that still would leave them with $100k and a job. That is a lot more than most of us out here in the real world. And if they want to enforce the contract, let them go to court. Where would they find a jury that sides with them? But most importantly: if they want to leave, LET THEM! Look where their "expertise" got their company, their country, and the whole world...

I liked the article, and thought it raised some good points. It seems that many of you didn't read the article all the way through, or are just ignoring parts of it to form your rants. It says that there's a difference between the "differed compensation" and the AIG situation. So it isn't the same thing. AIG is contractually obligated to pay out these bonuses that were signed last year when things were going well. It isn't like they were given the money and said, "Hey! Everyone who wants a huge bonus this year raise your hand." Personally, I don't like the idea of the government stepping in and saying that the contract is invalid. I think it sets a dangerous precedent. We're ALL at fault for what's happened, so let's just accept it and learn from it so that it doesn't happen again.

What kind of talent are they keeping at AIG? TRULY talented people are leaders & can see both sides (risk and reward) and prevent things like this happening EVEN if as you claim, that people around them are going crazy with greed, because they are leaders and can go against the crowd. Since they obviously failed, they are not so talented as they claim. This means that they should resign without any compensation package because they screw up. If they don't resign, then let it fail so they won't even see a penny of their bonus and salry, or let the government have complete control and fire those execs. (you think donald trump will continue to keep a 'talent' exec). (Also, I mean I'm not that talented, but I did foresee the housing market clearly when
everyone around me blindly say price will keep going up and that I'm wrong.. so how can they not see this happening.. they are greedy.. and greed is NOT a talent.. so f them all)

Also if they don't pay the exec bonus, it's good because it will be a new rule saying you perform extraordinary well, then you get a bonus, else you get nothing.. perform they regular duty is NOT a performance. you are paid to perform that regular duty. So this can set as a predecent to avoid things like that home depot CEO who got paid big even though he screw up. CEO are not real leaders in my opinion ever since I realized these things happen. Real leaders care for their people, can set a good example.

Ms Schlesinger –

Although I disagree with your ultimate conclusion on the issue of the AIG bonuses, I appreciated greatly your rational and well written article above. We live in a society that can only focus on one problem at a time and not an entire mess like we are dealign with today. This is just one part and does not preclude the government, media, and individuals such as ourselves from saying its all Wall Streets fault.

However, we don't reward people who's decisions ultimately led the company to almost go into bankruptcy as well as other affiliated companies which led to worldwide economic slowdown. You give them a carboard box to collect their things with and fire them. Isn't the right to terminate employment due to failure to perform in the employment contract too? I see your points but ultimately performance is performance and in the end with AIG went bankrupt these bonuses in the end would be moot.

But again, I do want to say I thoroughly enjoyed reading your measured article. We should always respect our opponent in debate regardless of opinion – unless its just hate speech – because by hearing alternate views we learn perspective and that knowledge in the end either rationlizes the solution or provides teh perfect argument for compromise.

My question is, if the government let AIG to fail, would they get their bonuses? Of course not. So they got them not because they made it but because they stole from our tax payers. I know, our government is stupid for not putting any stipulation there, or they are really smart to help those at AIG since the same Wall Street crooks were/are running the treasury and Fed.

I wish I could get "deferred comp" for losing billions of dollars. Call it was it is Jill, it's a bonus! You drive a company into the ground, ask the taxpayers to bail you out and save your jobs and then you want a bonus on top of that. Just exactly how many Americans do you think are making millions of dollars in bonuses for substandard performance? Jill, you are part of the problem hiding behind excuses as to why you guys should make so much. I have no problem with people making what they can but when you are doing it at the taxpayers expense, shame on you. This company is now owned by the taxpayers until you can come up with the billions that you took from us. As far as I am concerned, I hope it goes chapter 11 and half of you idiots can go look for jobs

Your points are not without merit, however, after years of working people getting hosed down and having to swallow pay cut after pay cut, benefit cuts after benefit cut, while fat cats arrogantly act like they have this sense of entitlement to grab as much cash as they can, and their cronies in Washington enabling them to do so for the most part, enough is enough. Working people are on the line everyday, and if they don't perform they get axed, and yet these clowns get millions for failure. PLEASE! The entire economic system in this country is essentially unfair and unsustainable. We are being extorted by AIG and their ilk. It is class warfare in reverse. If these Wall Street types don't want a class war on their hands, then they should stop waging one against working people, because mark my words, WE WILL FIGHT BACK! Working people can unionize. Then they have power. When working people in this country and realize this simple fact, then the real fireworks will begin.

Oh, and a note to "hedgefundcsi":

I'm assuming you are articulating some sort of critique of the Obama administration and the democrates in congress. Just a guess though...

so the bottom line on what the correspondent is saying is
wall street ceos get bonuses regardless of how the business is doing?
when the firm is making profit-ofcouse they get profit no doubt about it
when the firm is being bailed out -they still get bonuses ,and the half page rationale you gave justifies it

so this is a business with no risk for executives??

Does anyone here truly understand anything she is saying, it seems not. Let's say you have insurance on your house, the insurance company is in financial trouble. You have a fire, you file a claim. If then the insurance company goes under, and file for bankrupts, GOOD LUCK at getting your money at time soon. If we let AIG collapse, and all those people who know the INTER WORKING of the system get fired, how will you ever fix the problem? By the time you restructure the business and hire new people (who may or may not be better then the prior managers) the business and all its clients and support, are DEAD. If a mom and pop shop on the corner fails, at most 10-20 people lose their job, and a few supplies lose a small customer. If a 2 trillion dollar business fails, thousands lose their jobs, their clients lose a service that was already paid for, and all type of secondary companies loos business and it starts a chain reaction.

It seems the people to just rush to anger are either politicians trying to appease people, ignorant people who do not understand the ramifications of letting these companies fail, OR are reporters making headlines for profit.

When your ship hits an iceberg do you just FIRE everyone who knows how to operate the radio and life boards, even though SOME of them are responsible for hitting the iceberg in the 1st place?, or do you just deal with the situation the best you can.

I am a business owner & one thing is certain...if you don't have any money – you can't pay bonuses, period. It is a basic financial reality that "financial experts" have choosen to ignore.
This money has been made available to save their jobs ... not line their pockets!

Thank you for writing this. My husband and I tried to listen to your side of the story and unfortunately were frustrated by the antics of Mr. Mack to completely obliterate your attempt to do so. We also could not believe that the interviewer, Ms. Chetry, could not or would not maintain control of the interview so we could hear both sides. We certainly hope she is not paid a performance bonus...because given her performance this morning, she does not deserve one!

I just hope we don't continue to politicize this "who does and who does not deserve a bonus" issue and get on with moving this economy forward. In my opinion, it will have to be done by smart, motivated and probably "well paid" people.

A few points –

1.) Taxes are withheld from bonus pay at the max rate which means about 40% of that $165mm is going back to the IRS anyway.

2.) Do we really want the govt dictating a company's compensation levels? Sure it's okay when we're talking about the big execs, but where does the dictating stop? I bet there are a ton of non exec AIG employees who got some kind of bonus there. Even if it's $5K or something. Is that outrageous? Should that be stopped? If you work for any private company that ends up getting TARP or stimulus money, do you want the govt to have a say in what you get paid?

3.) The govt ran Fannie and Freddie and look where that got us.

4.) The govt was outraged at all the subprime lending that went on that caused the real estate market to pop, but they are now just as outraged that banks aren't lending to people and businesses with marginal credit. Do they want another cycle of credit to pop?

Jill:

You start out by saying everyone is to blame and, to a certain degree, I agree with that. But everyone, with the exception of the Wall Street executives, has paid through the nose for their share in the financial meltdown: the borrowers who have lost their homes, the incumbent lawmakers who lost last election, the bank shareholders whose holdings have now been reduced to penny stock. But the Wall St executives have NOT come even close to atoning for their actions. And THAT is the crux of why the other guests vilified you (I agree somewhat discourteously) on American Morning.

And you can define 'bonus' as deferred compensation if you wish, they are still not entitled to that money, given they would be thrown out on the streets without our taxpayer money funding their lavish executive pay.

The whole bailout should never have happened, the company does not deserve a future. I hope all US Senators and Representatives are taking notice of the public anger over this.

Yes, I've watched these "manic" discussions before on everything from finance to some Hollywood-designed, "star" twit driving drunk & frankly, we need a lot more civility. This IS a complicated subject with more than enough blame to go around. But let's get one thing straight- the "rules" have NOT changed no matter how blind regulators are, no matter how egregious the pay scale is for executives, no matter how things are "justified" to meet the scenario that investors, banks, rating agencies, and just about everything else involved in our free market system WANT it to be.

1. If a company doesn't make a profit, bonuses won't/CAN'T be paid.
2. We will have good years & bad years; that's why we put away money for "a rainy day." Sorta a "dollar cost averaging."
3. Top executives don't make more than 19 times what the "average" worker makes-not 300 times!
4. We can't "Outclever" ourselves with tricky inventment(s). Who in their right might would invest in something, like derivatives, they don't basically understand?

We have just retired a yr ago & are comfortable, but not rich. We have NO debt & a large amt. in savings that my husband prudently managed with his acquired skills & judgement. And it took work learning & keeping up with investing stragedies. We knew we HAD to start saving about 15 yrs ago & boy there is nothing like FEAR to motivate. We put ALL of my paychecks into the bank; I never saw them. How were we able to do this? We lived within our means ALL of our lives. We lived well, but not extravently. And we have been rewarded with 2 sons who are following in our footsteps.

My only fear is this health care fiasco that passes for care in this country. Believe me, I have relatives in Australia & it works quite nicely there, thank you very much, & it makes their retirement much more secure & less worrisome.

Fine. If AIG had these contracts already in place, the solution is simple. Close down AIG, thus eliminating the contracts, sell off their assets to other firms or allow the government to take them over and redeploy those undeserving SOBs to a job more fitting to their obvious talents – I recommend putting them to use cleaning out the rest room stalls between innings at the new Yankee Stadium. They can work their way back to wealth doing honest work – for example after six months they can move up to using a toothbrush.

This way everyone's happy and I have a nice clean place to poop during the seventh inning stretch.

Well, you knew you were in for it when you titled the article the way you did. What a mealy-mouthed apologist you are for everyone that has stolen the future from all of us! Whether or not I spent more than I should have (how dare you make a stupid blanket statement like that!) has absolutely nothing to do with the fact that the retirement money I spent decades accumulating and placing in so-called safe investments is now worth nothing. We have been robbed by these people, and you are making a fortune (you overpaid, ignorant nobody) acting as their defense attorney even before charges are filed. And oh yes, they should be arrested and put on trial, in public! I hope your family is as hungry as mine.

Hey Alesia – not sure what world you live in, but gas has been down for some time, food isn't continuing to dramatically increase in price, and neither are utilities (and if they are, it isn't the government who is forcing it on us). And not everyone needs to jump on the buy a house bandwagon. The real question is – where is your husband in this equation? In the midst of your blame the government/system spiel, is the simple truth that somebody, namely you, didn't use the best judgment? I'll give you some credit for putting your kids through college – hopefully they are getting degrees in something useful.

a bonus should be paid for outstanding performance and when a unit or company makes money,,, the argument that we need to pay a retention bonus to AIG staff to " keep the best and brightest" it seems to me that the " best and brightest" got AIG in the mess the are curently in and, we are paying the price... where is the logic???? where is the common sense,,, or is in your mind that these " logic etc: are only for the " best and brightest"" come on let's be real on this and cut the crap>>
JC

Wow...exceptionally well written. This is the best commentary I've seen on the subject and really should open some eyes to the dangers of a "populist" administration.

Hmmm... nothing new revealed here. When AIG was on the brink of failure and received taxpayer money in the form of a bailout, that voided any of these 'bonuses' under their contracts for the simple reason that if they didn't receive the bailout, well then AIG would have folded and then they wouldn't have received their bonuses anyway. They no longer deserve that 'TON' of money.

And no.... we 'didn't get into this together'; the vast majority of us are the little folks that don't have any pull as shareholders since we individually own such a miniscule amount, and therefor we have no influence of these boards. That game is played by the 'big shots' of Wallstreet and we little guys are not privvy to that world. We're just working our 9-5, contributing to our 401k, and hoping that we can retire someday. Now our 401k's have atrophied, we're losing our jobs, but oh... we still have to give those Wallstreet jerks a BONUS for this because it was in their overstuffed contracts???

I think one of the weirdest oversights in all of the arguments about the financial bailouts is the presumption that these highly paid financial industry executives will simply evaporate unless they are paid their millions or hundreds-of-thousands. Taking the author's point, AIG might have suffered a disorderly winddown if these "deferred compensation" packages didn't come through. My question is where would these people have scrambled away to? CitiBank? Wachovia? At this high level, it is a zero sum game – there ain't a lot of positions open for what they do. If I have nowhere else to go, I'm pretty sure I'll do the job I was paid for at $100,000, even if I was expecting $300,000. In such a case do I cut my expenses drastically? Yes. Do I keep my job? Also, yes.

Had AIG gone bankrupt instead of receiving a bailout with our tax dollars, those execs would be out of work. They should be grateful to have a job, unlike many people in NYC today. Do the right thing - FORFEIT THE BONUS!!!!!!!!!!

I agree with Mrs. Schlesinger's point that we all need to act like the responsible adults we purport to be. Screaming and yelling solves nothing and is very childish! That said I find the arguments regarding contractual obligations and retaining the best and brightest as somewhat lacking in substance. There was no question with the auto companies that if they were to receive bailouts the management and unions both would have to give on compensation going forward. ...And they did. Other senior management at other corporations have rescinded bonuses in light of the serious financial conditions. As for retaining the best and brightest to keep AIG running. My difficulty with that is first, 11 exec's have left anyway and if these bright people brought AIG to a complete collapse, ... why do we want them around to fix the problem? If they didn't see (or want to see) the problem coming how will they know where to take the company in the future? They were obviously not understanding the degree of risk they were taking. Corporations who are deemed "to big to fail" should not be allowed to take risks that would threaten their solvency.

Um, since the govt owns AIG now and you cant really sue the government, whats the risk of just not honoring those contracts?

commenting on this

We got into this together and we will emerge from it together. So let’s stop shouting and start talking like responsible adults-we owe it to one another.

- no we did not get into this together..only the greedy got into this and they got into this together.

whats the ratio of americans who got into this and made profit or loss out of this with direct investment? i think the percentage would be less than 10%.so how is it that we got into this together?
this sounds more like the saying: success have 1000 fathers,failure is always an orphan

I agree with Mrs Schlesinger that their a lot of people to blame Clinton, Bush, the current Democrat controlled congress the previous Republican controlled congress, Greedy banks and Wall Street types. But what does she have to say to the people who lived with-in their means, who didn’t take expensive vacations and buy fancy cars. Who worked hard and honestly for the money that they received. What about us that the only mistake we made was listening to Financial Advisors who allowed people with big accounts to trade after the markets were closed and told us who and what to invest in with out being willing to take any responsibility for those suggestions. Where is our Bail out money or large bonuses where is my 100,000 dollar salary or even 80,000 or 50,000. I served my country for 22 years in the military and now work to help veterans get their benefits. I have never been paid a lot of money but I tried to be a smart investor but if people like these can’t figure it out what chance do I have.
You people need to stop blaming the American People for this mess and start acting like “Adults” and clean up your business and the Government need to start acting like they have some sort of ethics and responsibility.

As defered compensation to be paid based on performance. One would think some employees whether regular, managers, or execs, obviously someone F'ed up causeing the overall performance of the company to faulter. In this case the overall compensation payout should either be reduced or eliminated.

Since the original "Bail Out" loan was basicaly a blank check made with no oversite, We the People, can thank our elected officials in the Senate, Congress and the President of the United States and let us not also forget the Chairman of the Fed, for ramming the Bail Out Bill down the throats of the tax payers of the United States.

I would imagine with the fine work our elected officials have done, we can expect them to vote themselves a nice pay increase, or should we call it defered comensaiton?

Alisia Wells makes the pathetic mistake of thinking anyone cares that she has kids to put through school and feed! It's about time that pathetic Americans who are just bitter about other peoples financial sucess get a clue. We financially successful individuals mostly got there through hard work, long hours and sacrifice. Nothing was just given to us like you pathetic underacheiving over leveraged spend aholics would like to delude yourself into thinking so you can sleep at night and not have to take responsibility for your titanic failure of a life.

Having children ISN'T a right it's a privilege so if you can't afford kids on your salary then don't have them. No one cares that you made the irresponsible decision to have kids when you couldn't afford them. Go rot in a homeless shelter or give your kids to some hard working decent americans who can actually pay for their decisions in life. They'd be better off being raised by adults who could serve as a decent role model not someone who doesn't think their actions have any consequence.

American's self entitled mind set is what got us here in the first place. Not to mention the I should be able to live like the Jones's even though I don't earn like the Jones's. The top 5% pay over 60% of tax. The top 5% employ the middle and lower class. So maybe we should start giving the money to the people who will actually spend to employee all you cry baby complainers.

Note to all the vast majority of Americans who got them selves into financial distress or foreclosure due to their irrsponsible behavior:

GO ROT IN THE SOUP LINE YOU DESERVE IT!!!

Bonuses are essential part of providing incentives. But when peoples greed takes over and they have all the control the result is the financial mess we are in. No one cares about any thing else but how much money they are going to take in at the end of the year. These people at the top have to show that they are worth the money they want just like anybody else. This friends sitting on the boardroom of friends system does not work. Have a proper bonus that is tied to performance. If you do not perform you do not get any bonus just like all the rest of us. Do not give me the crap that if they do not get bonus they will go somewhere else even though they ran the company to crap. Who ever agreed to the shady contracts at AIG including the board of directors should be brought to task. Who is looking after the interest of the shareholders.

This is ridiculous to argue that they deserve the bonus. Yes if they made billions they can get their millions. I have no problems with that. But no bonus should be automatic whether they perform or not. Also a bonus can never be so huge compared to their salary.

"There is a big difference between these discretionary bonuses and the AIG situation. The AIG $165 million represents legacy “bonuses” that the company was contractually obligated to pay. Yes, I know that it seems unfair that we taxpayers are making these payments, but when the government forked over the fist bunch of money to AIG last fall, there were no compensation strings attached. "

SEEMS unfair? That they took advantage of the situation only drives home the fact that this entire debacle was/is fueled by pure avarice.

The only reason I can think why you are defending this malarkey is that you're in the same business.

You are right up there with P.T. Barnum, scum.

Let us just discuss common sense. How about a new common sense legislation:
"All PUBLICLY TRADED companies should not pay any bonus unless they show profit for that year notwistanding any contract that may exist between the company and their employees. Bonus pay should not exceed the percentage year over year profit."

I don't expect congress to pass any legislation like this because they are all thinking of of life after congress when they join the private sector and hop on the gravy train.
This kind of legislation will eliminate the argument that they will lose talent to competitors because this law will apply to most of them.

More financial expert claptrap. AIG lost money, it should have gone out of business. How can a company that has no money pay out a bonus (or deferred compensation), the hell with a "so-called" contract – there is no money. And since AIG has basically been taken over as far as I am concerned these contracts are null and void. Technically I am one of the owners and as such I say no bonuses and better yet FIRE all these people. And I'm also tired about hearing how good talent costs money. Just how much talent does it take to run a con game? Lot's of crooks who never took a finance class in their lives do it quite well.
This country runs because of the little people, not the elitist rich. Think about it – who fights for this country, who puts out the fires, who teaches the children, who protects our neighborhoods, who grows our crops, who raises our livestock – need I go on?

I agree with Stan ( March 17th, 2009 3:39 pm ET) that if the company loses all this money, then executive performance cannot be judged as “bonus-worthy”.
I also agree with Stephen (March 17th, 2009 3:39 pm ET) about the financial industry making un-godly amounts of money because they can, not because they deserve to or should. I think a lot of this outrage about executive compensation has been brewing for decades, and is really bubbling up now because, before, Joe Shmoe made an “adequate” living and was willing to keep his mouth shut about pay inequities. Now that Joe Shmoe is in pain, the anger that has been brewing is boiling over because the execs aren’t feeling the same pain. Money has lost its proper meaning in our culture. Money ought to represent hard work, skill, knowledge, performance of a societal need. It doesn’t… it currently represents “what you can get away with”. Does a financial exec deserve millions of dollars, tens of times more money than say, a primary care physician? I doubt that the exec works harder than the PCP. I’m sure the exec isn’t smarter than the PCP. The service the exec performs isn’t anywhere near is important to society as the PCP. So why does the exec get millions more than the PCP? Because he can get away with it.

You make the case that the AIG bonuses are earned by people doing their normal job and not really "variable pay" for outstanding performance. I wonder if AIG would agree with that. Companies have to classify their bonus plans as one or the other– google "162(m)" to see the rules. Maybe AIG was illegally deducting their previous years bonus payments to executives if they weren't really for performance?

"Nuance by another name: "nonsense. AIG was - and still is - a hedge fund. Nothing about delivering value; nothing about integritiy or hard work; nothing about anything but making a bet, using someone else's money.

The bailout funds were intended to prevent AIG from defaulting on claims. None of the bailout should be used for compensation.

I do agree that corporate executives who makes the daily business decisions should be compensated handsomely in the form of bonuses .. even in millions of dollars. But if your company has just tanked due to mismanagement/incomptence/greed, none of these executives should receive any amount of bonuses. Their salaries should continue as usual but no bonuses should be given to them when it comes to taxpayers money.

If the bonuses come from AIG's, not one person would be bothered by it. These wall street scumbags do not grasp the real meaning of accountability. AIG executives makes me sick and there is no valid reason why their bonuses should be paid by taxpayers money.

Hooray for Ms. Schlesinger. I agree with her 100% on her last statement – that she would not be returning.

Her written statement about a ‘more sophisticated approach’ serves to further divide Wall and Main streets. As far as responsible adults, I view her as being just as irresponsible as the greedy AIG bonus recipients. No amount of double talk can defend their sense of entitlement and their bottom line greed. Ms. Schlesinger may have all the credentials of a knowledgeable financial advisor, but appears to lack the good judgment of someone I would trust with my hard-earned money.

Deferred compensation. Interesting.

How about this for thought.

If the government really allowed AIG to tank like Lehmann, then I guess this whole "deferred compensation", would not be an issue because these execs would not be receiving any money at all.

-----------

At any rate, because of the nature of the bailout, the company should not have played by the same rules. Now, if AIG needs another injection (and it probably will), many will probably go – let it fall.

And I guess when it does tank, there won't be an issue to be outraged about because they'll be no money to even hand out paychecks – say "deferred comps" or "bonuses".

For me, this is not about scapegoating. The author is right in pointing out the many contributions that have led to this mess, and for noticing what a tiny percent of the bailout funds these bonuses represent.

But the author misses the mark.The notion that a company can be contractually bound to pay DISCRETIONARY income is non-sensical. So what if the *operational* norm is to treat bonuses as entitlements? If the language in the employee contracts states that compensation beyond base pay is "discretionary" then what is the legal basis for them having to pay out these funds?

I also find the argument that "the staff people we need to save AIG would have left if they didn't get their bonuses" to be wholly unpersuasive. Where would they have *gone*? How many other companies are out there today – insurance or otherwise – who can still afford to pay such outsize salaries? If I was at AIG and a potential recipient of such a bonus, I might wail loudly at not getting it, but I would know damn well that there ain't too many other jobs out there right now and at the end of the day I'd be spitting happy I still *have* a job. And those who might quit out of spite? Fine. I have no doubt there are plenty of talented people who would be willing to come on board to help AIG out of its mess.

bo-nuts!!!. how can you call it a bonus when it is more than what 185 combined average americans make per year?
are there families that much bigger?

It sounds to me Alesia that you chose to have children. Did someone force you to make 35,000 a year? I would obviously need more information about you to make a informed opinon , but something doesn't seem right. Lets get one thing straight. Nobody owes us anything. you are 100% resposible for your actions. I don't hear any responsibilty comming from your comments. I wish they never got the bonuses too. Thats the deal they made , simple as that. Do you realize there are much bigger issues regarding this than the bonuses? Does Barney Frank , Chris Dodd , Pelosi and George Bush have anything to do with the financial mess? Lets go to the root already. If someone said to you ," sign here and you'll get a millon dollar bonus" what would you do? Honestly now.

Ms. Schlesinger,

The financial industry produces one product., $$.

Above a certain level of staff all performance is driven by meeting or exceeding their numbers, such as revenue targets, number of new clients, etc.

To say that one in the financial industry earns a $200k deferred compensation based on their performance when the company has lost the amt of money AIG did is laughable.

You're implying that hundreds, if not more, AIG staff met their financial targets yet the company lost Billions ... that really is fuzzy math.

Thank you so much, Ms. Schlesinger. That is the first clear and reasonable article I've read relating to AIG and the part it has played in the current ecomonic mess.

I can see why people are upset, especially when they don't have all the information because of biased reporting or don't understand the whole picture. I'm not that crazy about those bonuses either. But on the other hand, the way that congress and the rest of the media is waging such a hate war against AIG is something that's difficult to understand (or maybe not).

Yes, I totally agree that AIG did foolishly invest in a lot more messy mud pies than they could handle... but the main point is that they weren't the ones who made those mud pies in the first place. Some would say that they were created in the congressional bakery run primarily by Franks and Dodd and perpetuated by all their friends there in Washington. And now, amazingly enough, who is doing most of the finger pointing at AIG?

AIG was just at the end of that long line of risk. But what if for a moment, we imagine that AIG never existed and never invested in those pies. That alone doesn't do one darn thing to get rid of those messy pies. So where do they end up in this imaginary case? Now at the end of the line of risk, we find the pies being owned by a multitude of banks, GIA's and other financial investors (some of which you have seen in the list provided by AIG).

But in reality, AIG did exist and did attempt to insure all those messy mud pie investments. Also in reality, now all of those intermediate investors are not in quite as bad of shape financially as they could have been. And that's because they are getting billions of dollars to cover the losses they might have had to bear alone... through the bailout money given to AIG.

I wonder how all of these companies would have fared if they had been stuck at the end of the line, all by themselves. How many of them would have failed because, individually, they might not have been quite large enough for the government to notice and therefore provided aid to? Maybe the Treasury was right in the first place when they said that by helping AIG they would be helping in the best possible way to keep the economy from failing.

But that's not the correct bandwagon to jump on right now, is it. No body really cares about what's right or wrong today. We already have our scapegoat and we're gonna have a barbeque.

The bonus thing is just a smokescreen. Wake up people! The entire bonus amount is only 0.1% of what taxpayers have put into AIG so far. I don't like these bonuses either, but while the media, Congress, and each of us complains about the $165 million, we are ignoring what happened to the other $179.8 BILLION that we taxpayers have put into the company.

AIG should postpone their "contractual obligation" to pay these "bonuses" until the money used to pay said "bonuses" is AIG's money & not borrowed taxpayer money. Additionally, recipients of said "bonuses" should be MORALLY and ETHICALLY obligated to either refuse their bonus or take their bonus and give it to those in need. The government (as usual) dropped the ball by not making specific stipulations as to where/how/whom the TARP funds would be spent by the recipients.

What disgusts me the most is that the recipients of these "bonuses" will probably take the money, because they actually BELIEVE that they earned it, and will sleep tonight with a clear conscience (based on THEIR ethic & moral beliefs). Afterall, facilitating the economic collapse of the free world is hard work!

Incompetence should be punished. They should be happy that they are not going to jail.

We certainly can debate how we came to be where we now find ourselves, but Ms. Schlesinger's attempt to defend or justify AIG's conduct is pathetic. AIG is currently going through what is no less than a defacto Ch. 11 bankruptcy that is being funded by the taxpayers of this country, all on the belief that it is better for our country to save AIG rather than let it crash and burn. In a real Ch. 11 bankruptcy, no bankruptcy judge or bankruptcy lender would authorize bonuses to be paid to the Financial Products Division personnel that brought AIG to its knees. Euphemistically describing these payments as "retention" payments is laughable. Retention of whom and for what purpose? To sell more products like the mortgage derivative securities that AIG previously sold at a gluttonously-high profit with no regard for high risk? Please, we out here in the hinterlands may not be masters of the universe like Ms. Schlesinger and her Wall Street buddies, but we know a scam when we see one. The bonuses should not be paid at all. If AIG refuses to stop the bonuses, the Attorney General should commence involuntary Ch. 11 proceedings against AIG immediately.

to david (above) and others like him – there's a reason you make $38,000/year. it's because you spell "chronic" as "cronick" and "diagnosed" as "diagnoesed". I would guess in your world, the word "definitely" has an "a" in it.

People who make upwards of $300k each year generally have long resumes and are very well schooled. They worked hard to get where they are at and they probably spent a ton of money on their education. If you work on an assembly line, you get paid for working on an assembly line. Why do you think pro ball players make $10 million a year? Because they have skills that others don't have.

Who knows if these people deserve their bonuses? Some do and some don't. Not everyone who got paid was responsible for putting AIG in this mess. And if these bonuses are contractually guaranteed, then everyone should shut up about it. What would you do if it were you in their place...say "no thanks, I don't want a contract that will pay me $1.5 million a year; give it to someone else". Get real.

And one other point. The cost of living in the metro NY City area is astronomical! Do you pay over $2,500 each month to live in a 700 squ. ft. apartment, plus another $300-$400 in parking? Or how about living in a suburb, and being forced to pay $1 million for a house that would cost no more than $300k in the midwest. Throw in $18-$20k per year in property taxes and $30-$40/day in commuting costs...Suddenly $300k/year doesn't go that far.

Yes it's discretionary compensation, and not tied to their performance as most "bonuses" are. The key word is DISCRETION. It's at the discretion of the higher ups if that is actually paid or not. If it were guaranteed, it would say that in her contract. I think, with their company having been bailed out, the executives would use their "discretion" and not pay out these exorbitant bonuses. It's hard to feel sympathy for someone who's base income is higher than mine, and a "bonus" is more than twice my income. Let alone the people to which my salary is "walking around money." I think another problem is the language they use, they keep saying "retention" and that without these bonuses, the employees that actually do the work will leave. Well, it looks like a few of them did anyway!! Outrageous!!

If comp is based on profitability and/or efficiency, should anyone in the federal government be paid anything at all? last I heard we were running at a 700 billion to 1 trillion annual deficit (LOSS).

Well, I had hoped that in the least Ms Schlesinger would have made me understand the reasoning behind paying out big bonuses when the company did not make a profit and is on the verge of bankruptcy. Unfortunately, she did not. See I come from a world where I have to work extremely hard for my money to take care of my family. The company I work for has a bonus/incentive program too. The difference is that we don't get paid our bonus or incentive until we make a profit over the budget. If we don't, we don't get paid. If we have a bad year(due to the market-not due to performance), our budget for the new fiscal year is somewhat adjusted accordingly and we usually manage to gain our bonuses back because we've worked harder and smarter.
If we don't get bonus strictly due to our performance, we get reviewed and may ultimately lose our job. That's how it should be, pay for performance. Why would you want to retain people who put your company in financial ruin? How could management and it's workers ever let it get that bad and then expect a bonus on top of it? That just doesn't make good business sense. Which I guess is why they're in the mess they're in. Fact remains-I certainly don't want to pay them with my tax dollars. They just didn't earn it. Period.

Ms. Schlesinger,

I agree that the TV debate was child-like & your adversary was rediculously rude..

But, your explanation only proves that you just don't get it.

As you trip over yourself defending bonuses to the insolvent-except-for-a-taxpayer bailout financial banks consider the following point being made to automobile excecutives:

"Critics of GM and Chrysler, which have received $17.4 billion in government loans to stay alive and have requested a total of $39 billion, say the government should let them go into a short, prepackaged bankruptcy that would let them restructure debt and void costly labor contracts."

Why was the same criticism not being directed at AIG and other large Wall Street firms last fall? Why wasn't the voiding of labor contracts an option. Of course the answer is that the Wall Street-Washington DC nexus prevented a discussion on this. The Obama Administration is participating now as actors in this drama as they pretend to be "outraged" at AIG bonuses but say little or nothing about
where the funds that originally were sent to AIG were channelled.

A third political party based upon fiscal responsibility with representatives not for sale to large American finanicial interests is sorely needed. The degree of corruption on Wall Street and in Washington DC reeks.

James Angresano
Professor of Political Economy
The College of Idaho

key point:
as long as Jennifer performed her job and her business unit did its job

so i guess you think that causing a financial catastrophe is "performing a job"???

wouldn't any normal citizen that brings such financial chaos be fired???

if i did something that caused my company to lose money, i would be fired, plain and simple.

oh, and they wouldn't give me my "bonus" either.

talking about bonuses-
except for the ceos and the upper level management..did the everyother employee who was promised bonus -verbally or in paper- paid bonus?

why is all the rumpus about agreement to pay the bonus-as it applies only to CEOs CFOs

AIG needs to be "SEIZED" by" Presidential Order " All of the company officers who were in on the bonus need to be fired . Anyone else who is in on the process should also be "FIRED". CLEAN HOUSE AND START OVER!!!!!!!!!! IT CAN BE DONE ! IF EVEN THE PRESIDENT WON'T DO IT THEN GET OUT OF THE WAY AND LET THE AMERICAN TAXPAYER HAVE AT THEM THEN WE THE PEOPLE WILL CLEAN UP CONGRESS AND SO ON AND SO ON >>>> GET OUT OF THE WAY BECAUSE WE THE PEOPLE HAVE HAD ENOUGH

The Wall Street thieves, taking advantage of the deep-seated capitalism of the American ruling classes, have arranged things so that they can stick their snouts into the trough of money and just help themselves, unlike other people who work for a living. As for class war, the conservatives don't mind at all as long as they are winning, but if any justice is attempted they wail "class war, class war." It is time for some real class warfare now, one that would put the fatcats to the wall. The federal gov't should seize the bonuses, followed by nationalization of the banks, followed by nationalization of the stock exchange. That should rein is the pirates and freebooters who rip off the public.

Aren't the people at the top responsible for the performance of the company? Aren't they in essence the true 'owners' of the company? If I owned a restaurant and had 8 great years and one bad year that collapsed my business, well then I will suffer and probably lose everything. That is just because as the Restaurant owner I assumed the risk and the rewards and downfalls that come with it. The people at AIG should have the dignity to go down with their sinking ship. They are the captains of their Company. Instead it is others who can't afford to pay the price for the mistakes that the AIG 'board' made that are sufferring while these people get off without having assumed any risk at all. That is plain wrong regardless of the legal arguments.

So who owns AIG now?? they have my money...I think it's fair to know all the names of the people who took my money....

I can certainly SEE Mrs. Schlesinger's point, but that still doesn't make it defensible. Without our taxpayer money, there would BE no deferred compensation. It's not just populist outrage; it's common sense. Whether or not AIG was contractually obligated to pay these bonuses was a moot point the second they accepted taxpayer money in lieu of failure. There shouldn't have even been a NEED for a no-compensation clause. This money (OUR money) was intended to put you back on the track towards solvency...nothing more, nothing less. Here are your options: 1) forgo the exorbitant compensation until you've paid us back, or 2) fail and get nothing. Simple as that.

Bonus is still Bonus. Deferred compensation is deferred compensation. if i mess up such a big company, i will be too shamed to come back to claim my 'bonus'.

She makes a valid point in this commentary. I don't like paying out big bonuses with my tax dollars either BUT changing the rules AFTER THE FACT could set a dangerour precedent.

Although I do appreciate the wonderful description of the "grey" area that you have provided, I believe there are two fallacies in your logic. First is that these people would leave a toxic environment if they didn't get their bonuses – to go where? – there aren't any jobs! Secondly – I do not believe that your description of bonuses is accurate for all those who have received them. I believe your model applies to the trader who is measured on quantity sold – however, for executives who have fiduciary responsibility for the performance of the company this does not and should not apply. If they actually performed in a manner that won them those bonuses AND the company is going under - who structured that deal? Shame on them!

You explained the anger of most Americans with "deferred compensation" that is "discretionary based on her performance". To the majority of people in business, that is exactly what a bonus is. Not something you can count on, just hope it happens if both you and the company does well. The only people I know that can count on the pay promised regardless of performance are government workers and tenured teachers. If the rest of us have to modify how we manage our own financial lives based on how well our company does, why doesn't Wall street (and those government workers) who are paid with taxpayer money!

Also, with a 80% stake in the company, you figure the government could do something about these bonuses – if not, what was the use of "buying a stake" in the first place.

Why don't we just have Christmas time for dole out free gifts of taxpayers' charity to all ailing businesses?

It sounds like some one was trying to protected her own. I don't have to listen and not agree with the execuse from the people from the same circle. Above all, this is my money and all the tax payers' money. Not "WALL Street" money. Wake up! You guys are still greedy!!!

is this what cnn journalism is?
does your hus or bf got those big bonus and you trying to justify it

The entire situation is a SCAM!!! Bonuses that company is obligated to pay?!?! The company should be in bankruptcy court!!

Glad you have put it into perspective no matter how ugly it may sound conceptually. Chetry should be fired and Mack should have a muzzle put on his BIG mouth. He must be from Detroit.

Performance = bonus. No performance = no bonus. Unless its guaranteed (deferred) SALARY and if that's the case, go after the Compensation Committee. Not only are the recipients of these bonuses shameful but the lack of oversight is every bit as bad. I wonder if the current administration will allow AIG to be sued by its shareholders?

Interesting that the bonuses have been known about for months by the very politicians who are now screeching about them. If these so-called leaders know so much why didn't they object when the stimulus package was implemented last year? The duplicity and lack of any spine by Barney Frank, Chris Dodd, and even King Obama and his court is sickening; if this dog and pony show continues our country will be down the toilet before our citizens, way too many of whom are self-centered, blindly believing pawns, realize that they have been duped big-time.

And we taxes for this??? How is this benefiting us??

Once Again.

Lets be as unresponsible as those execs. Let's not save their butt's.
Let's take back the billionw we have loaned them and let the Exec's and others get their extended compensation and bonus from the bankrupt company.

Jill, you really need to get a clue. To defend the indefensible is outrageous. These people didn't deserve bonuses, unless of course you believe someone deserves a bonus for running the company so far into the ground that it needs the American taxpayer to bail them out from failing.

So I am going to put a proposal to my boss that I don't get bonuses based on performance. I would like them guaranteed.

No offense I can say that you offer your points well enough, but I have to agree with Alesia; I can't really agree with the whole compensation idea. It's still dumb. Say for example, you have an abundant resource of whole grain which would be your currency; You have one plentiful bunch of grain you get every year; (Your Base pay) which should cover pretty much all the necessary needs to survive or support a large family. In other words, that base pay should be more then enough, hell it's overkill.

Then you get compensation for selling some of your resources(your bonus) so you get whole big whole resource of grain that's 5 times the amount you already get...

But here's the thing, other people need that grain to eat.

So in this case, You're trying to justify, millions of dollars belong to those employees and CEO's, based on the idea that it's in the contract of your company, and because the government decided to overlook clauses and details of that contract; you say those people are justified to receiving millions of dollars.

That's the same kind of situation, of say, You're a little kid and your mommy didn't see you beat the crap out of a smaller kid and take his ice cream. So you begin to think, "I get more ice cream as long as she doesn't know!! And I deserve it because I've been a good kid!"

And yes I agree that America's just looking for a scapegoat. Of course the Clinton administration started hacking away at job securities for people with the NAFTA agreement. And the Bush administration just flung more fuel on the fire with the Iraq War but in my opinion, Wallstreet just makes for helluva a good scapegoat too...

I agree with Alesia, there's a thing called ETHICS; this is why I've become less and more less of a supporter of our capitalism system. It creates too much of a caste system. And by caste system; AIG's keeping core employees like other companies, because of high values and skills as an employee. That's a smart way to go business wise.
But it's unfair to a more plunging population...People getting put on the streets, working long hours at a crappy job. This is defending the wealthy 1% and saying; "Because their skills are more valuable to us...they get anything they want"

This of course, isn't going to make a crowd very happy.

So I'm gonna offer a bit of simple advice; if you want to win an argument and defend your point of view more here, I would reach across the table with some more instances of HUMANISTIC ethics as opposed to totally defending your viewpoint based on BUSINESS ethics....Hell pick up a stool and smack the guy talking over you and tell him to let him have your turn

I apologize that I didn't get a chance to watch your piece on the show. And it's seems unfair that you got shouted at. I believe you make some good points. Although I disagree with the whole compensation thing; I'm not a person who really cares alot about money just as long as I get enough to survive and live life comfortable and make beneficial contributions to society.

Legally AIG was obliged to honor its contract. But MORALLY it should have considered the effect such huge bonuses would have on the public in light of the current crisis. It should have asked the prospective receivers of bonuses to defer them in order to preserve the company's public image and promote further bailout not only for AIG but other banks as well.

I agree with Bridget Feeley, Ms Chetry did not moderate this show properly, she just created fire for viewship. WRONG WRONG WRONG.
I myself will watch Fox News from now on and show this garbage to all I know.
Ms. Schlesinger never got to tell the Truth to the ignorant that do not understand the importance of a contract nor earning $200,000.00 + dollars per year. It was already in thier componsation package, grow up. You people think you're "entitled" to something you never earned. If you don't like what this country already gives you for sitting on your ass watchin Oprah, then move somehwere else. To get these top exects to work for the company you hold stock in , WE must pay them in order to get the payback we want. If we knew this recession was going to happen, the board of directers would not have given them as good of contracts as they did. It's called capitolism folks, if you do not like it MOVE. YOU are costing us more than ANY of these top executives.

One key point – how much of a bonus would they have received if there wasn't a taxpayer backed bailout and AIG went bankrupt? Should we also pay Lehman bonuses???

Hi, I would like to get a job interview with a company that is "too big to fail." And I would also like to interview for one of those jobs with a bonus that will be guaranteed regardless of how the company does over the course of the year. And just in case things don't go well, I would like to be paid handsomely to be kept around to "Unwind" some of the bad decisions that I may have made in the past.

I would like to do these things because I'm really tired of being subject to realities of the other economy out here where if a company fails I might loose my job, and where my compensation at the end of the year is based on my performance and the company's performance.

I have one more populist question: is there a list of companies too big to fail on the internets?. Could I find it with The Google?

Schlesinger should be fired. If AIG was allowed to go bellyup, would
these aholes have gotten their bonuses?

Not only is it wrong, it is morally wrong.

Schlesinger should take a bridge.

There may a great number of people to blame. None of them will receive a bonus for being to blame other than the AIG executives and employes. Your point is irrelevant.

It is very simple in my opinion. If the company were still performing well and operating upon its own revenue, then hand out all the bonuses you want. Who I am to tell a company what they do with THEIR money.
But this isn't their money. Its the hard earned money of every American out there. Kids working through college, single parents, struggling low income families, and struggling middle class families. If you think I am willing to tell my children that the reason they are eating ramen noodles and macaroni n cheese (not even the good kind, nasty Flavorite stuff) because we are struggling to pay bills is so that employees that almost drove a company into the ground can get some bonuses that total more than I will probably make in a lifetime, you're insane. Not on my watch. I helped pay the money that made it to where those people still have jobs. I'll be damned if they are going to spend it so recklessly when I can't even afford to give my kids fruit snacks every once in a while.

Ms.Schlesinger is entitled to her opinion. So is the collective judgment of the American people. The issue is not bonuses in themselves but the practice of companies who are only alive due to the good graces of the American people to have the audacity to pay bonuses during a time of financial crisis. One must also wonder if the performance upon which individual "bonuses" were based was in fact real or simply a product of "jobbing the system." It seems that given the drop in the market no profits were actually earned or were merely illusory. Ms. Schlesinger does not feel to grasp this fact. One must then wonder what kind of financial and interpersonal judgment she possess. In turn what judgment the money managers at SharePoint Investment Advisors must possess.

Perhaps the American people can vote with their feet. Simply don't due business with the companies that exhibit this type of outrageous behavior and those who in turn defend this behavior. Boycotts ended apartied in South America. I suspect they could bring a level of discipline to Wall Street too.

And that all goes out the window when public money is involved. Taking my dollars wasn't in their contract, but they did it anyway. i want them back.

Financial engineers should not be immune to the results of the risk they have taken. There is a reason why variable compensation is "variable" – even though bonuses my be the de facto compensation, they are based on company performance. By bailing out banker bonuses we perpetuate the illusion that got us to this situation in the first place – unlimited upside, but a floor on the downside risk.

While I see the need to retain top performers at companies like AIG, I still have one question – if they didn't pay out bonuses, where would these execs go? Its not like there are tons of companies clamboring for ex-financial services professionals right now. They will have to stay in those jobs until they get fired or the economy turns around.

"Without a guarantee, many would have fled the toxic environment and left AIG in an even deeper hole. "

Fled to where, exactly? Is there a huge demand for executives who helped drive a company so far over the cliff that it took the entire world economy down with it?

First, fault the Fed Govt for the idiotic structure of the entire TARP, etc. packages.

Nevertheless, the correct response to those who were to receive "bonuses" would have been, "We're sorry, but the company is bankrupt. We can't pay you in cash, but we can pay you in stock that can be redeemed after all the TARP money is repaid and we're profitable again."

Or even better: "You're bonus is that you get to keep your job."

The thing that irks me about this whole discussion is that when a company does badly, it usually is the mid to low paid employees that are asked to take a cut so they can save their job and those of their fellow employees BUT when it comes time to ask those who make the most this same gesture isn't even a consideration. Both parties have contracts with the company when it comes to compensation. My income is very high and this new administration's policies will most likely hit me financially, but in times like this, shouldn't everyone share in the burden and adjust their expectations, so we can lead this country out of its past and build a new sustainable future? The way I see it is the establishment is acting like a bunch of spoiled children who are just selfish and entitled.

If a company loses money, they should not be giving bonuses. You can try to deflect that simple point by bringing up consumers and government and anything else, but those are nothing but diversions...the old "well, just look at what he did" argument that always gets thrown up when someone gets caught red-handed doing something they shouldn't have been doing. The people responsible for these bonuses deserve to be fired, and there should be some real investigation into the legality of this type of "take the money and run" action. There is absolutely no question that management knew they were on a ship that was going down. Rather than trying to right the ship, they robbed the company blind.

The money that was paid by the taxpayers was intended to prevent the company from going under and stabilizing the financial system, and was not intended to end up lining the pockets of these executives. I work in finance and am aware of the compensation system - that bonus are a significant portion of compensation is irrelevant. The fact of the matter is that AIG is a bankrupt company that would not have been able to pay these contractual obligations but for receiving the taxpayer's money - it is just plain silly to think that this money is owed to these people or that AIG should pay them out of some concept of fairness - I think you are completely out of touch with the real issue here, which is actually very simple and straightforward: that taxpayers, many of whom are in financial crisis, should not be funding bonus payments to executives of a company that has failed.

understandable but in a recession restructuring of contracts is the most likely way to cut cost. People that refuse to restructure contracts that are demanding these bonuses need to be let go. My father works for Ford and for the 3rd time in the past 2 years have restructured their contracts to help save the company money, Yet a company receiving 6 times the amount of the entire auto industry combined is allowed to give employees that amount of money. These people aren't being forced to accept the money if they want to stay in business don't take the money and restructure you contracts to make it fair to the people giving you this money.

I am not sure why these execs must still be called "best". A month ago they came to the govt. asking for a loan to resurrect their company, its a mistake on the govt. part that they did not see that the money was in fact going to bank accounts of top execs. However weren't the people asking for money aware of this? Were they smiling under their tears thinking "let the ship go down but I will get my share"?
As our president said this is not a question of "dollars and cents" its about values.
These execs should know thousands of people who are on street today had paid money as tax for them to be afloat.
Whether the govt can get money back or not, execs should be ashamed of taking it! If they have any honor left in them they should forfeit their bonuses.
I am sure they will never, still there are people who think they are the "best"!!!

Great article. People get so caught up in the emotion! A contract is a contract and if employees have contracts regarding bonus payments and conditions were met then AIG has to pay bonuses.

I don't think any court would say bonus payments should be withheld because the money is borrowed from the government. The deal is between employee and employer. Perhaps these agreements should have been written better and had more specific restrictions. If AIG went bankrupt then the bonuses would not be payable unless funds were available. Otherwise-no choice.

For all those who oppose this I ask-would you refuse to take the bonus? When your company is not doing well (assuming you are lucky and still have a job) are you giving back part of your paycheck? Are you refusing a raise, and if you are lucky enough to work for a company which gives bonuses this year are you saying NO to keeping it? I don' think so.

Lets not be jealous. No I don't work for AIG no I don make $1 million dollars a year or even close. I am losing my job in the next few months. I won't cry over spilled milk! I will find a new career, a new start. The American way-do it, contribute, make your own path. S

However she puts it, no one (regardless of who they are) should get rewarded for failure and that too when the tax-payers are footing the bill! Once, the AIG is bailed out by the government, they should be treated as govt employees and their contracts have to be re-written.

Let us take for example, I work for Company A and my company gets bought out by Company B. I get new employment contract, my bonus distribution will be different; lot of times, even the designation change; and so does benefits.

Why should the AIG guys think they are any different from the lot of us. If they want to leave, let them leave.

One point of disagreement!
The board of directors of public held companies get a healthy compensation and considerable prestige being on the board. It is their consumate responsability to curb excessive risk taking and to set reasonable compensation for management. I find it very very difficult to believe that anyone is worth hundreds of million in compensation unless they are risking their own money. I have also been told that many were taking excess risks because everyon else was to boost profitability. I guess if everyone is jumping off a cliff one should join them.

Mrs. Schlesinger, Your comments are well thought out and rational. I am sure the appearance on CNN was no picnic but you probably should have expected a talking head dog fight because that is what so much of televised media is about today.

In you statement you left out one important concept that I really haven't heard many critics or defenders of Wall Street talk about. That is the Fiduciary duty that Wall Street, AIG and its employees have to the Tax Payers who's money they were entrusted with. You know the concept. A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

A fiduciary must not profit from the fiduciary position. This includes any benefits or profits which, although unrelated to the fiduciary position, came about because of an opportunity that the fiduciary position afforded. Namely the bailout of AIG.

Secret commissions, bribes or extortion, also come under the no profit rule. The bribe shall be held in constructive trust for the principal, the Tax Payers. The person who made the bribe cannot recover it, since he has committed a crime. Similarly, the fiduciary, who received the bribe, has committed a crime. I would argue that there is a close relationship between a "retention bonus", meant to keep employee at AIG, and a bribe or an extortion payment. What else is the payment of money to someone so that they will not act in a way that may harm the bribe payer anything but a bribe or extortion.

This in nonsense. Use simple common sense. Bail out funds should not be used to compensate employee "bonus" plans. These are tax dollars that must be repaid by the public. I emphasize public. The greed displayed by AIG was the problem, is the problem, and will be the problem. There is no rationale to justify this behavior. The government did AIG a favor with the bailouts; the American public will have to pay for the bailouts; these financial employees would not have received bonuses if we had allowed these corrupt financial institutions to go bankrupt! Maybe the government should rethink its policies.

"Too many Americans forgot the simple rules that we learned from our parents: don’t spend more money than you earn, and save a little bit from every paycheck."

Jill, have you been living under a rock??? Americans HAVE been saving a little from every paycheck. It's called an IRA or a 401k or some other investment fund recommended by you and all your financial advisor friends. And what happened to that money? Americans have lost TRILLIONS of dollars in the last 18 months. Don't blame us for being homeless or jobless by saying we should have been saving our money. We did – Wall Street stole that from us too...

Whatever happened, happened.
What people say means nothing, compared to what they do.
It is by our actions that we are judged, not our feelings, thoughts, or words.

Wall street has made there actions known, as have the American people. So don't tell me that I can't judge them, the American people, and myself.

We've all left our footprint here. You can't change the past, and you can't prevent the future. The same mistakes will be made again by different people and different corporations. So let's use a little distributive justice, and punish the people most responsible, Wall Street. Than we can start to move on and move forward. The American people have already suffered enough.

Point well taken and I saw the interview this morning (won't comment on that).

However, I disagree with you. It's nice that "Jennifer" expected her "deferred" compensation; however, it is not "business as usual" at AIG. Jennifer should have been pulled to the side like millions of workers in America and told, "hey, you still have a job, but I'm cutting your pay" or "hey, you have to stay home for two days out of the month, but you still have a job" or simply "you are not getting a bonus this year".

If AIG was performing and did not have to take a government bailout, I don't think anyone would care about Jennifer's "bonus" (aka "deferred compensation"). However, "Jenny's" deferred compensation is paid with tax money from people who do not have the luxury of giving it to her.

So, I understand all too well your point Ms. Schlessiger....but when are these people "really" going to "get it"? It's not "business as usual on Wall Street and "Jenny from the Block" shouldn't be compensated for poor performance....Jenny should take her "base salary" and thank God, like the rest of us, that she still has a dang job!!

To quote you:
"Without a guarantee, many would have fled the toxic environment and left AIG in an even deeper hole."

Apparently 11 of 73 did take the money and then flee the toxic environment they helped create.

Plunder and flee. Their behavior can't be justified because it's "unconscionable" and that's a legal reason for nullifying the contract anyway.

As a former trader, I understand the evolution and concept of deferred compensation. Without knowing the details of individual contracts, it is difficult to believe that most of these "bonuses" were obligatory.

First, deferred compensation is based largely on performance and if your unit is responsible for the massive red ink in the company's bottom line, then there is sufficient basis to not pay the full deferred compensation. There is a saying on Wall Street, "You're only as good as your last trade" and that phrase more than applies in this case.

Second, without federal tax payer money, AIG executives would not have any base pay much less receive a bonus.

Third, it has been reported that many of the executives who received these "bonuses" have quit, taking their compensation with them. So clearly, they are not retainer bonuses.

AIG's actions are unethical at best and criminal at worst.

However, ultimate blame lies with the former administration and Congress. When they bailed out AIG in 2008, they applied no restraints on compensation.

The government should have seized AIG, in the same way the FDIC seizes a bank. Then, all contracts could have been renegotiated, solvent units could have been spun off and toxic ones could have been propped or allowed to fail.

I'm sorry, but based on your "logic" regarding deferred compensation and bonuses, I would pose the question that if discretionary bonuses were based on fraudulent returns, shouldn't all these executives be forking back the "bonuses" of the past five years?

You're being deliberately obtuse.....

I understand the concept behind the bonuses, but let's get to brass tacks. They call them bonuses to manipulate financial reporting and tax reporting. If they are labelled bonuses then they should be subject to risk like all other bonuses. If it's guaranteed it is no longer a bonus.

Then to the issue of compensation. The compensation at these financial firms have become bloated (and in my opinion extremely so) in times of great success. The justification was in how much wealth they were generating. Now that that has failed, it is only fair for compensation to shrink for exactly the same reason. the financial system has now destroyed great wealth, and should be held accountable by the real owners of the money, the people.

If you justify big payouts by earning big money, then ther reverse MUST be true or it is ALL a big Ponzi scheme.

You can slice it anyway you like–deferred compensation or some other misnomer. But, at the end of the day, AIG got taxpayer dollars, and that is the ONLY reason they still exist. To AIG's credit, it may have had competent executives stay on board, but they also helped create this mess. This is not just an oversight; it's a slap in the face to hardworking Americans who find themselves overburdened as it is and still have to pay the taxes that line these executives' wallets.

Yes, we are in "it" together as you rightfully pointed out, but some are very eagerly and cheerfully, and most importantly knowingly, took us into "it", while the thousands working people in those institutions follow the orders from the top and yet the investors and the public, including lawmakers not knowing what is going on just trusted the scammers on their promises and falsified documents. "Those" are not that many, but few people are responsible for all this financial crisis mess, those at the top of the decision making chain of command, whether that be wall street firms, insurance groups or government watchdogs. They are easy to find, easy to count and to name, and to make fully responsible for their deeds in the court of law. That has nothing to do with laying blame, but everything to do with living by laws. I am absolutely sure that there are laws that will punish for what they did, be it a criminal negligence or outright scam.
Let's not forget, for last 20 years this is not the first time that with trillions of taxpayers money these and other scammers were bailed out. Let's recall crisis of 1987 and next in 1999, and who and how they were bailout. And you will see the same names over and over again. Practically, with all those bailout money given to the industry over the years, they owe everything to the people, the taxpayers many times. There is nothing theirs, except their scams. All the money they operated with were borrowed from the very people of this country. All the millions and billions they "made" on these scams should be taken back as the compensation of their acts. This is not some money games, these acts are criminal in nature and have very definitive terms in law books. Let's stop to rationalize and cover for thieves and criminals, their place is not in positions of executives of our financial system, their place is in jail.
We are bond to fail into the same traps every few years unless we clean our house well.

Jill,

I don't think you were mis-represented. I think you just confirmed that representation with: "...she was told that her “total comp” would be $300,000, comprised of a $100,000 base salary and up to $200,000 of cash and stock “bonus” that is discretionary based on her performance"

That statement right there, shows me you have no idea how stupid you sound. Most Americans don't even make $100k per year, much less a $200k "bonus".

When Doctors screw up sometimes people die. Those doctors get sued out of business for carelessness. Maybe the same needs to happen to the bankers and advisors that carelessly allowed this to happen. They killed the financial life savings of who knows how many millions of Americans.

Play the victim card all you want–say that you were just a cog in the machine but the reality is just the same. You personally were part of the group of people that DESTROYED the financial life savings of millions of Americans.

It goes beyond what is contractually obligated to these people...goes beyond it by far. These people have been criminally negligent in their jobs and should pay the price.

When you are out of job too, then and only then, will justice have been served.

If US tax payers gave the money which rescued AIG. In fact if it was't US goverment these "golden boys" would be unemployed.
It is ridiculous to have bonus. In contrary, they had to cat even their salary.

It is unfortunate that wallstreet believes they not only deserve all the money they reap. But while they often go back to their homes in the Hamtons. The rest of the "real" world loses their jobs and struggles to keep food on their tables.
No one owes Wallstreet anything! and as soon as these "the entitled people" get this through their heads. The world will be a better place.

While I appreciate the counter-point to the rage - all valid and salient points in this discussion - I still believe the central question is if AIG were left alone to solve their problem, whould they make the decision to re-direct the deferrend discretionary compensation to offset loss? After all, wouldn't it be within AIG's fiduciary authority to exercise its discretion on the deferred compensation? That's the point of discrectionary compensation. Faced with bankruptcy filing, they should address their employees with the decsion that they have to take a cut or the company goes under. And the employees? Are they so self involved that if asked to choose between saving their company by getting a reduced salary for a while or getting one last check and then being unemployed that they would choose the latter?

While a tough choice, in a capitalist free market these are the type of leadership decisions a Board must make. And before the American government steps in to bail them out, shouldn't the USG be given proof of the company's commitment to correcting the situation?

The amount isn't important. The act is. In AIG's case it just happens to be of equal amounts, which adds to oversimplify the situation that if there are no deffered discrectionary compensation checks issued then the problem is fixed. But to the average Joe, they believe it is. And the more I hear, the more I do too.

Ms. Schlesinger, You have a right to your opinion; we taxpayers have a right to be outraged by what AIG exes has done. The outrage is not so much that those execs got bonus...its how they got it (with taxpayer money!!!!!!!)

I pray to God that all AIG execs involved in this scandal are punished to the fullest extent allowed by law.

Why are the contracts for these executives not negotiable but the auto industry contracts are? This seems like an obvious double standard in which the "working stiff" gets shafted yet again.

Hello Jill

The deal was structured to make the bonus payment regardless of the companies profit? Jill thats crap! Yes crap even if it is true! What we have is a large financial club that rips off shareholders. Make it to this level and up becomes down. Once the shareholders are ripped off then they rip off the taxpayer. Who are these people who think that they deserve huge bonus payments even when huge losses happen under their watch.
Contracts can be written in many ways and the way these were written should be criminal. You don't deserve the money you are paid and neither do they. Do you really think that class warefare will not occure if this crap continues?

Gene

To Jill Schlesinger:

I accept your premise that there are many to share the blame for the economic crisis! Each should be held accountable in their own way. I don't accept what I think I hear you say that there are too many to blame and punish. CEO's of Fannie Mae and Freddie Mac,
for instance, should be in jail today for lying before Congress.

Pay these “misnamed bonuses" that should be named "deferred compensation" with the company stock. Any company receiving stimulus money should be required to change these contracts to be based at least on the companies financial position and subject to it being accurate and not a made up financial lie to be discovered a few years later.

Finally, many of those who are receiving their “deferred compensation" are the very one's who put their company and assisted in putting the nation and the world in the crisis that we are in today. They should compensated with jail. But we don't, we pay them to stay...the reason being that we need the same people who got us into the crisis to get us out. Well that was a Philosophy of Kart Mart when they were in bankruptcy...I don't shop there anymore.

The same thing will apply with Wall Street for instance AIG. I won't by insurance from them anymore.

Wall Street won't get out of this mess easily because they all have lied so much and thus don't believe each other for that reason. The sub-mortgage crisis is not the only source of the crisis...Wall Street and its greed and deception have fuel a worldwide crisis.

I wouldn't give Wall Street another dime...let them figure it out on their own and give all the bonuses they want without tax payer’s money!

"diverts attention from the bigger issues and makes this about class warfare and not about basic good governance and risk controls – whether in the administration and oversight of TARP funds or the regular conduct of AIG’s and other recipients’ business."

But this is about "class warfare." The greedy executives are at fault for the loss of the middle class in America, worse shareholders have LET THEM! Why are all these executives and top management still making the big bucks and letting the little guy go????Where is their paycut??? Shouldn't they be cutting their pay to keep the little guy on so people have jobs? And so more the economy doesnt continue to go in the wastebucket?

My main question today is

Shouldn't the government be rewarding companies for keeping jobs? Why are we giving money to banks who are letting people go left and right?

P.S. This bonus nonsense should never have been issue, because morally right and good and honest people would say "hey, taxpayer is keeping us afloat so we still have jobs...I don't think that we should distribute these bonuses even though we are contractually obligated to especially since, this is probably going to be another media spectacle and embarrassment for us" But wait, those greedy guys are what shareholders elected into power....Interesting...

I was due a bonus, one almost equal to my salary, at the end of 2008 . . .so I guess I was on similiar comp plan as AIG execs. My company made some bad decisions over the last couple years, and was forced to downsize. I was part of the downsize and didn't get my bonus. Unfortunately, my company wasn't large enough for a gov't bailout. So get off it. I just lost my job, but I'm helping to support AIG. You DON'T deserve your bonus when your company is on it's way under.

Insurance companies don't seem to have a problem doing a slow roll, or denying responsibility due to a technicality, when it seems they may have to pay a "contractually obligated" claim on an insurance policy. Why were they so quick to pay here? They should have not paid, and let the employees fight for their bonuses in public court if they felt they were entitled to them.

OK, those bonuses are water under the bridge. We can't get it back now, that $170 million is chump change in the big scheme of things.

The Bush Administration just wanted to flood the system with money, foolishly trusting America's corporations to work together to alleviate the crisis. What happened is that Wall Street worked the feds the same way they worked prospective buyers who were looking for a bigger home than they could afford. They figured out a way to get the feds to pay for their mistakes AND get their bonuses.

What we need to learn from AIG is that global corporations view their customers the same way a rancher looks at his herd. As we all know, ranchers do not worry about whether their cattle are happy. They keep them healthy when it is profitable to do so ... and they send them to the packing house when it is profitable to do so. The management of global corporations are not striving for a just society or a fair society. They want a system in which they can make as much money as they want without regard to the suffering of others.

The mythical magic of competition in free markets is supposed to wash all this stuff out and produce the best possible world for the largest number of people. Now we know that CEOs have learned how to game the system so that they win and we lose. To them, this is justice. To them, their workers are a cost (salaries) which should be as low as possible. To them, their consumers are an irrational market that can be swayed by fancy advertising.

Capitalism has morphed into something that none of us would have voted for if we had ever been asked to vote.

I get the impression that the author of this article thinks we just "don't understand" the situation.

Be assured .. WE DO UNDERSTAND. We understand that the Wall Street crowd wants to make the money they feel entitled to even when the company has failed and they are being supported by the federal government.

Get a clue, Jill. If there had been no bailout, there would be no AIG .. hence no bonuses. What don't YOU understand?????????

You said it all with your "Jennifer example" and the "up to" comp and bonus. Is "up to" a guarantee? Since AIG would not exist without the bailout money, the "up to" bonus should be forfeit, as the company cannot honor it due to the condition of their business, a-la force majeure. The taxpayer should not be liable to uphold someone else's promise they could not keep..."no earmarks", right?

Why is it when the money is coming in in wheelbarrows all we hear from Wall Street are cries about government interference in the "free market"? But when the excrement hits the fan, everyone wants a government bailout-banks, insurance, car companies. How about no bailouts for anyone- the weak ones will die and the strong survive and thrive. We should all opt out of paying taxes for a year to remind them where the power really lies in the country!

...Like a waiter / waitress receiving a base salary of minimum wage augmented by tips...? Well, isn't the total of her "tips" dependent upon the number of patrons frequenting the business during that particular period and how pleased they were with his / her services?

Does the restaurant provide tips to the waiter/waitress that the patron did not leave? Just asking....

I admire your high sense of ethics that believes that the fine print of a contract should be "honored" even if it hurts! But I don't remember personally entering into a contract with AIG–do you?

Legacy shmegacy.
These guys begged us for help...led us to believe they would be trying to help us all by saving the company...but in the end it was all about saving themselves.

This is like the millionaire on the Titanic who trys to buy a seat on a liferaft. When he gets no takers...then he indignantly say's, "I've invested millions of dollars to help this ship get built–as much as %10 percent of this ship was built by my money! So I think I am entitled to one tiny little cushion on this insignificant little rubber boat-thank you very much (as he pushes your Grandmother into the ocean)!

trying to buy a seat on a liferaft...when they get no takers, they

The biggest problem is that government created this mess when they made the decision to bail out AIG. There is never a good reason to have our oversized and completely inefficient government take over any industry, in part or in whole.

This is all about class warfare. There is a campaign that the government, at the highest level, is selling the American People that states that wealth is evil, especially in times of need. How do they execute this campaign? They push all of us into anger against business owners, Wall Street, and huge coprorations, while they sieze more and more cntrol each and every day, with cheers from the people. Before you know it, however, the government has much more control than the Constitution ever intended and maybe even more than your average liberal is comfortable with. It's anti-capitalism, plain and simple. It's a smoke screen to get us to believe that we're fighting against these people who earn more than we do. When did it become a sin to earn money? When did Americans stop believing that success drives our economy - not the Federal government?

Ms Jill, I did see the show at 7:30 today. Well, I didn't feel it was Mr Mack who was shouting but you who was. I thought, Mr Mack was more humble than you.

On the sidebar, I dont agree with you a bit. If a company is not making profits, they cant pay bonuses (call it deferred comensation if you want to). And to pay it with public money, are you kidding me!! I want to see which court sides with AIG.

As if $100,000 "base" salary isn't incentive enough for employees to do their jobs? Where I come from, if you don't do your job, you get fired. Where does the bonus come in? Especially if we're all paying for it? And where did the rest of the money go?

Talk about bubbles! Ms. Schlesinger's column is an example of living in the bubble where Wall Street=good because a lot of money was being generated. AIG wasn't creating profit, honey, they skimmed off a huge amount on derivatives and only cared if they got theirs. In the words of Tom Friedman-the IBGs or I'll Be Gone when this whole scheme implodes. Right along with the brokers who gave loans people couldn't afford, who passed them on, hey, IBG, the rating agencies-IBG. Please don't insult us Ms Schlesinger. We have a home that is paid for, no second mortgage, older cars. We have never lived beyond our means. But our 401k is cut in half and we will likely have to work until we drop because of the people you are defending.

Let's see, our government blindly hands over $170 Billion without any stipulations, then we all get outraged at AIG regarding how they spend 0.0004% of it?

I think the outrage is going in the wrong direction!

You are right about the deregulation being the base cause, removing the safe guards put in place after the 1929 crash was the base problem. But bonuses paid to the screwups that got gready and bankruptded these businesses is a joke. Anywhere outside the financial market they would have all lost their jobs and should. Retunsion bounses no servience pay. The need to be gone and replaced with someone resposable.

Jill, reality check. You're wrong down to the minutest details of your argument. Figure it out and become part of the solution to this mess. A good mind is a terrible thing to waist to Wall Street cronyism, selfishness and greed.

Ms Schlesinger:

First, I thank you for your insight. Unfortunately, the example you gave through the use of "Jennifer" will do little to quell the perceptions and ire of the overwhelming majority American taxpayers. You see, Ms Schlesinger, the vast majority of Americans do not make $100,000.00 a year with or without a bonus, discretionary bonus, legacy payment, or whatever one may call it combined.

To paraphrase another... I personally believe that once taxpayers bail out a corporation, its officers basically become government employees. How many government employees do you think receive $3,000,000.00 or more in bonuses? That is the amount that at least seven of AIG's financial products officers reportedly stand to receive if these contracts are honored.

It is beyond time for Wall Street, the insurance industry, and the banking industry to come clean and provide full complete disclosure to the American public. Congress should do the same for they are culpable, as well. Americans are not an unintelligent lot.

I am glad to see some give a rational discussion on the bonuses. I too work on commissions and bonus. I too, have a contract. I want to be paid by my contract I have signed with my employer. My bonuses are not subject to the profitability of the company. I did what Iwas to do under my contract and expect the company to uphold thiers.

If our Legislators agreed to give AIG this money with no accountability they are the ones to blame. It should have been clear that the taxpayer money should not have been spent on TaxPayer Money.

Also, I do agree about the shouting when there is more than one view point. The interviewer should have had more control. Shame on CNN.

I agree that the blame needs to be shared. I agree if the word bonus is a "mis-nomer" it should be changed. What I don't understand is why the word bonus is a mis-nomer in this case. If the word discretionary doesn't mean discretionary, then why not use the word deferred?

What does bother me is the concept that I should feel MORE sorry for these executives and their 300K salaries and the financial ruin it would cause them to not get part of their compensation then I am supposed to feel for the rest of us, equally to blame, but who don't have these golden safety nets.

I made bad decisions. I may fail financially. They make bad decisions... they are guaranteed "bonuses" or "deferred compensation" (which is a stretch Jill... deferred compensation is used to make the books look better than they actually are which is fradulant).

I DO, however, appreciate the attempt to provide another perspective. That is something that has been missing in a LOT of media these days.

I worked on Wall Street for the past ten years and NEVER made 300K. That is a lot of money... First, , if the person is making 300K, they are likely making closer to $150K base. Someone making this much money does not deserve compassion from someone makes $20K per year or who is now unemployed. Period! Bonus is on top of base salary. Base salary is designed to cover living expenses. So, what we are looking at here is people who are used to profiting handsomely, being put in a position where they are only making enough to cover their living expenses. Doesn't sound like a bad situation to a lot of people. More humility is needed around this conversation and Wall Street is in no position to be defending that the "excess" 200K is part of regular pay. It sounds ridiculous! Absolutely ridiculous.

These bonuses represent less than one tenth of one percent of the money transferred from the Federal Government to AIG. That's less than $1 for every $1000 tranferred to AIG.

Where is the concern for the other 99.991% of the nearly $180 billion transferred?

Where is the concern for the nearly $2 trillion dollars the Federal government is borrowing and passing out to it's favored receipients at our expense?

Pelosi, Reid, Obama and Bush handed out truck loads of cash and we're worried about the change that rolled off the back into these AIG executives bonuses.

Worrying about these bonuses is like worrying about an extra penny and a half commision to a realtor on the sale of a $200,000 home. Its a nice distraction since so much of the frustration and anger is directed at AIG instead of the politicians who handed them this money.

The real waste is in Washington DC, spending our children's and grandchildren's money.

No matter how do you want to slice it, this bonus structure is unjustified. This is tax payer money, not investment. This is the money the government squeezes out of hard working and struggling american families, basically food out of your baby's mouth. It can't be used to pay as bonuses to fat cats. You will tell me that it is necessary to prevent the collapse of the financial system. I will say this is an example of why the capitalistic system has run out of its course. Like a terminal patient, it can't be reformed, can't be rejuvenated. It can only be thrown in the dust bin of History. The system is totally corrupt and reactionary. The only cure for its deficiency used to be the periodic boom and bust, ie. depression to remove and clean out the excesses. Now that has been gone for quite some time. So the monster is getting really sick and fat. It is now ready to collapse on its face.

Jill,

I agree with the other posters complimenting you on following up with the other side of the issue. CNN sometimes conducts poor journalism by not allowing balanced dialogue in these interviews.

However, I do not agree that the bonuses should be paid. If the contract doesn't allow the company to be discretionary on the paying of the bonuses, let the employees take AIG to court for them. There was in interesting article in Fortune today about the term "unconscionable" as it relates to contracts.

Many people work for companies that offer bonuses for exceptional performance. In years the company does not make money, the employees don't get bonuses, no matter how good they did individually.

The free-market system is a two-edged sword. Success = riches, failure = losses. AIG executives need to feel the pain of their failure.

So they got bonuses. Big deal. Good for them. If I had the chance to make that kind of money I would. You all would too. You can't deny that. Don't cry because some have more than you. The thing that worries me the most is that Obama is using his power to get the money back. Beware folks if this precedent is set. Whether you make one dollar or a million dollars, he will come after you if someone decides you make too much. With that comes disincentive to work and reliance on a bankrupt government. No thank you!

you said that the bonus was effectively money given as longas the person and their unit did their job. Frankly, it looks like most of them didn't really do their job. More importantly, while there is an unwritten agreement that the bonus will be given as long as they acheive mediocrity or better, shouldn't the business maybe decide to award hundreds of thousands of dollars on top of an already six figure salary only to people that are maybe a little better than the average?

PEOPLE: The POINT is that these payments are NOT actually BONUSES. They are termed BONUSES, but they simply are part of their contractual salary. Some were probably "guaranteed" and called 'bonuses'. It's just a NAME. The legal obligation to pay still makes this payment a salary. These are NOT real bonuses that most of us know as payments based on profitability or sales or whatever.

That being said, if AIG went down without the bailout, no one would have gotten paid. PERIOD. So why is OBAMA and the rest of gov't so quick to blame the Executives? BECAUSE THE GOVERNMENT SCREWED UP! When they gave the Bailout, they did not require AIG to modify all the employment contracts they had, which they could have done so through legislation.

Ms. Schlesinger, why all the soapbox talk about what our parents told us about saving, and not spending more than we earn, and not getting "caught up" in easy money, and other little financial philosophical tidbits? This is all beside the point; it's hindsight, and at this stage in the game sounds like the proverbs from a CitiBank advertising campaign. What's at issue here is the abuse of taxpayer money, which makes taxpaying Americans very angry.

AIG doesn't have any money - it is a failed company - so where on Earth did they get the money to award BONUSES!? Hmmm, they must have gotten that money directly from the American taxpayer - money that was provided to them to continue operations in order to payoff debtors and restructure. That's a slap in the face and clear abuse of the second chance this company was given, which was perhaps not even deserved in the first place. Most Americans find AIG's continued greed, arrogance and ignorance of the hard times we're in, to be unbelievable, and such is the reason for their fury.

Their only hope for salvation at this point is to have a voluntary, unanimous return of the bonus money, with no questions asked. Otherwise, the list of shamed people receiving these bonuses will circulate around the country, and no respectable person will do business with them again.

My God, the more some people like this try to explain why these "bonuses" are just fine, just part of doing business, the more obvious it becomes that they really, truly, DON"T GET IT!

Ms. Schlesinger's "Jennifer" example is perfect: perfectly disingenuous. perfectly ridiculous and perfectly offensive.

It is disingenuous because it implies that the public is upset about Little Jennifer and her Little delayed compensation. It is misleading to portray this as the sad tale of some girl who might not get all of her pay.

That little extra $100,000 or $200,000 that Little Jennifer may or may not get is chicken feed compared to the real story; which is about those who did not act in good failth in their dealings, and who will take, not one or two hundred thousand dollars, but millions of dollars, after they drove their companies and the economy into the ground.

It is ridiculous because those arguing in favor of these bonuses are living in a world of illusions where they are completely ignoring or just paying lip service to the economic reality of today.

And finally, Ms. Schlesinger, it is offensive for these simple reasons: even after you slash the hypothetical amount your Little Jennifer can make from $300,000 to $100,000, that is still so much more than the VAST majority of us make.

Your apparent obliviousness to the reality of over 90% of Americans is absolutely stunning.

People have already died because of this crisis. People are losing their homes. Tent cities are springing up around the country. I don't know a single Jennifer who will have to suffer on $100,000 this year, but virtually everybody I do know would be THRILLED to have $100,000 in income this year, not to mention the millions that is actually being handed out.

And that's what you don't get. You are a small part of a small minority living in a world completely removed from where the rest of us live. Your world is boundried by expectations that you deserve and should have that much more than the rest of us – and most of the time, that's fine.

But, when you ask us to step up and bail you and Jennifer out with what little we have, even as we're losing what little is left, and then you expect us to bail you out – not to where we are, but to where you are used to being – then you are delusional.

This angers me! I worked in the financial industry from 2005-2007. At the end of 2005 I received a $1,000 bonus because our client base had gotten larger and our sales reps were phenomenal. At the end of 2006 I received a $500 bonus because two of our top sellers left, along with a lot of our client base. The same happened with a restuarant that I managed. One year, $1000 Christmas. The next – $0 (here comes the recession!) and finally, this August, the restuarant closed. There were no bonuses for me or anyone else for that matter (and we didn't close because of bad business – hurricane). I took a 50% paycut to work at Sonic so I could at LEAST pay my mortgage. I stopped driving my car. I ate at home instead of eating out. Please don't put any of this blame on me.

Everything that you said is true and well balanced. The part that you do not mention and what ought to enrage all taxpayers, is that nearly all of the "bonus money" that was distributed throughout Wall Street over the past few years was based on ephemeral profits. Rubin and all the other big bonus recipients took real $$$ home,when the paper profits they earned for their companies evaporated by a factor of 3 or 4.

The taxpayer becomes responsible for losses, but the portion of the false profits that was paid out in bonus money is in the hands of hot shots buying multi-million $ apartments in New York City and yachts in Long Island.

My lesson from all of these failures, and the attitude of finance "experts" who feel they are owed these bonuses? Remove myself from this as much as possible: lower my own consumption, reduce taxable income and pay as little as legally possible to the government. And participate in the consumer environment as little as possible. When I hear the CEO and CFO tell us we should begin buying once more, then I buy even less.

Well said! Now if we can tie the salaries and benifits of the politicans to how well the country is doing, then we might have some real progress.

I don't see why when everyone else is doing with a little less, contractors and unions are giving up pay, non union employees are giving up hours and taking cuts.... why shouldn't they?

If we are going to talk about limiting pay... and real change, lets start with our own elected officials.

Let me explain what the lady was trying to say but was too shy to say: You people are morons. You don't understand that not only was AIG too big to fail, but the executives were also too big to fail. They gave themselves generous salary packages and were smart enough not to tie their bonuses to their performance or the company's profits. Their bonuses are based on existence. You people cannot possibly understand. These people were simply too successful to fail. Besides, you wouldn't want to see any country clubs or private golf courses shut down would you? Who would you look up to then? They are American royalty.

First, if the contract is a problem, I say, fire everyone for cause (they nearly brought down the financial world, that ought to be reason enough) – surely the contract provides for ways they can be fired for cause. Re-hire them to fix the problem they created, but with a 25% reduction in pay – and remove all bonus clauses – especially any for fixing the problem they created. And the argument that "if we don't pay them, they'll leave" doesn't hold up - I mean, if you were a hiring manager and you received the resume of someone who lists their last job as "AIG derivatives trader" which waste basket would you throw it into?

I don't care what name you give to "bonuses" they are based on performance. Since when can employees be awarded for "GREAT Performance" by granting bonus when the company is almost dead. I suppose these"GREAT" employees drove the company to where AIG is today. So I still cannot understand what are we awarding them for? So how can you justify that a company running into loss is not a result of bad employee performance. It is a collective result of Horrible employee performance and Horrible Leadership.

Comments like "no one should make million dollar bonuses" and "$300k is more than anyone makes" are frankly un-American and against everything that makes this country great. You work hard and you get rewarded... those people that are getting million dollar bonuses made BILLIONS in profit for the company in most years. So the company pays them a percentage of what they made. It's no different than any other salesman, except that the numbers are bigger.

Those that complain that they don't make as much as those people need to look at their jobs. How much are you, individually, contributing to the company's profits? If you are contributing $100 mil, but are only getting a $50k salary then you can complain. But if you're just a normal worker, your pay is probably in line with what you contribute to the company's profitability. So think a little before telling other people how much they should get paid. In capitalism you get paid based on what you make for the company, and unless you want to go to Communism and then the government will tell you what you should get paid.

ok let's say these people are entitled to the bonuses, that still doesn't mean taxpayers should be paying for it. Let them sue AIG to collect their money.

In the case of AIG, don't forget that it was BANKRUPT. Are bankrupt companies who's worried about paying its bond holders and debts still obliged to pay the bonuses (or you say delayed compensation)? Chances are if the taxpayers didn't rescue AIG, the employees would NOT receive any bonuses. So AIG employees should receive exactly what they would have received if the taxpayers did not bail them out.

While I appreciate Ms. Schelinger's attempt to "explain" the "bonuses" paid out to people who worked for a company that FAILED, she doesn't seem to understand that the company FAILED. "Jennifer" would have lost her $300,000 a year job, because her company FAILED. When a company FAILS, it is obvious the best and brightest don't work there. Ask a lot of the people who lost their jobs whether they got any bonuses for the prior year.
When the company took public funds – all bets were off, all previous contracts/hires – whatever you want to call them – should have become null and void.
What happened here was pure GREED. Everyone saw a way to get rich quick......not the old fashioned way of earning it.

"the new management of AIG be able to retain a core of their best people to help wind down some of the most dangerous aspects of the business.'

To say that they were your best people doesn't necessarily mean they were good. You could put a 5th grader in a 1st grade classroom and because they get the best grades, it doesn't mean they're smart. It appears that there's an extremely shallow pool of intelligence and ethics comprising AIG. What other profession can you be so handsomely rewarded for incompetence? Ms. Schlesinger I can only assume that at some point in your career you've gotten yourself a handful of dirty money and are now trying to justify it to yourself...sorry, nobody is buying it...

They had contracts for those bonuses, people, BEFORE the bailout money was received. There's nothing that can be done. (Short of congress passing a retroactive law, I suppose.)

Case in point why the government should not be bailing out private sector companies!!!

my main question is, why didn't congress complain about these "bonuses" when they were tripping over themselves to throw money at AIG? why the sudden outrage now, when nothing has changed?

OK, so *why* did she bother going into the example of "Jennifer" when in the next paragraph she says that

"There is a big difference between these discretionary bonuses and the AIG situation"?

I bring this up because her "Jennifer" example, in my mind, reinforces that these (I quote) "discretionary" bonuses of "up to" (for example) $200k should NOT be paid out. She goes on to say that "... as long as Jennifer performed her job and her business unit did its job, she would earn $300,000...". I would argue that this logic, applied to AIG's business unit, would mean they didn't get these bonuses.

I know her point was to say that it's part of her comp but in bringing up these extra "facts" I think she's shot a hole in her own argument

I look at this simply: If these contractual obligations were put in to place prior to the bailout, they are entitled to it. How many people would voluntarily give a portion of their pay back based on it "being the right thing to do?"

How about Congress and the Senate both of whom doled out money to the banking industry without any stipulations. Aren't they mostly responsible for the overall mess that we are in. Are they giving back any compensation as a result of their failures.

This is a lot of attention to something that is largely symbolic and pales in comparison to the package passed last week with tons of earmarks represented bridges and road work being performed in the most remote areas of our country, yet we couldn't find the time and attention to trim the waste.

Lets move on to more worthwhile actions.

Ms. Schlesinger:

What do you think was the basic cause of the French (and many other) Revolution(s)?

When a small group of people take control of, and take advantage of, the capitalist system – the system is doomed. The real creeps rise to the top because of their greed, and being at the top provides them with a perfect scenario to feed their addiction.

When the average American citizen/taxpayer – teacher, carpenter, engineer, nurse etc, make $45,000 per year providing critical goods and services – then watch a money-changer make $25 million in a year – you are surprised there is outrage and just-plain-rage?

The former works hard to earn a living, and to invest and deposit what's left in the stock market and in a bank. Those involved in the stock market and the banking industry take this money, slice off a big chunk for themselves, and loan the remainder to the folks that provided the money. There is no mystery to this scam any longer.

If we decide to "talk like responsible adults", a system such as what we have now wouldn't exist. The simple reason that 5 or 6% of our population is opposed to changing the existing system is because they are members, or intend to be. Sitting at a desk three or four days a week running your hands through someone else's money seems like a mighty easy way to collect several million dollars a year.

These people are, by definition, scumbags and scoundrels. They are making an indefensible amount of money by cheating the vast majority of Americans out of what should be their investment gains, their dividends, their rate of interest on their savings and checking accounts, and the rates they pay to borrow money. Not to mention the income taxes they will have to pay to resurrect the companies that were brought down by nothing, and I mean just that, but greed.

I call shenannigans! These people are not valuable employees who need to be retained. They are lying, thieving scumbags who deserve a jail sentence. I don't care how much fake money they made in the past; they made fake money in immoral ways. They are hardly the "best and brightest".

yes, there is plenty of blame to go around ... and this outcome has been brewing for years. however, Wall Street does deserve some blame, so let it be voiced and allow the chips to fall where they may. and remember that when the government is doing the bailing, they have a responsibility to every taxpayer, no matter what bracket they fall into, to require accountability.

after the depression, new laws and financial oversights were implemented, and it's obviously time to update them. That's not socialism, its wisdom.

These Execs. are nothing but pure evil. These blood suckers should not receive a penny in bonuses for their failure. Its like if my child do something real wrong, then I should get him a Corvette. They in their quest for greed have done such a bad job that the whole bunch of them should be fired!!! Instead the poor hardworking taxpayers should pay them millions for what? This is what we get for no transparency...companies can do what they want with our monies, and these greedy s.o.b's do not have to account for anything. They should be accountable like everyone else. Lets see...if I do not pay my water bill?...or my electric bill....? Seems as though the rules only apply to some. Come on Obama...start cleaning up this mess...and fast too. Bush, you should rot in hell for where you have allowed your henchmen to drive this economy...your days are coming!!!!

I listened via satelite radio to this and wanted eagerly to hear Ms Schlesingers comments and analysis. Instead this other idiot insisted on speaking over her and not giving her any time to explain about "bonuses on wall street". I believe she even said she was not defending but rather trying to explain how bonuses ever came to be. Then it was over because the host cut her off. All of us listeners out here lost out and that is really sad. The hostess probably went back to discussing something fluffy and I decided to go back to listening to POTUS and NPR.

This episode irritated me so much that it was on my mind throughout the day. After a while, it wasn't even about the bonuses anymore, but instead it falls into the typical loud mouth male popular opinion typcast disenfranchising the knowledgeable thought provoking female and the silly hostess did absolutely nothing to alleviate the childish interuptions. I carried this thought throughout the day and waited until I got home to post my comment.

I was pleased to see Ms Schlesinger address it, and was glad for it. I now understand how these bonuses came to be. It doesn't justify them today, but I understand now. All of us should be angry with the Wall St Execs who took advantage of an oldtime rule and not be angry with Ms Schlesinger who was trying to explain the rules of these old time contracts.

Kudos to Ms S for her courage to pursue this.

Sure, nice bonuses in exchange of superb returns on their work.
now... why reward the opposite too? why would anyone do a good job if he/she gets rewarded too during a bankruptcy, a recession, depression, or criminal behavior?

Ms. Schlesinger, who then is to be faulted for the financial mess that has caused the near, if not real, collapse of the various financial systems? You speak of the various people as "well intentioned" and capable. I do believe they were capable-of creating fraud. I have looked at AIG in depth and believe they are the "ENRON" of the financial world. And I say this with full knowledge of what I am saying. I personally believe what happened to these so called capable people was the surfacing of just plain old GREED. They did it to themselves and their short sighted management. No one told them to created the various financial instruments they created. You know what got them to do that–GREED and the obsession with more more more. Ms. Schlesinger you are wrong===very wrong. If I could, I would take all the top 4 levels of management of AIG, Merrill, Citi, and all others and put them in a "tent" city for 3 yrs-and then see who survives. I have no mercy Ms. Schlesinger-no mercy at all. They knew exactly what they were doing! I am sure of that!

"Without a guarantee, many would have fled the toxic environment and left AIG in an even deeper hole." – so these "saviors" need the my dad's, a machine operator with an annual income of 32k, tax money to help them to get out of a hole they created but now they run off with millions??? ..does that make sense to you?

That was the best commentary I have read about this crisis. It is unfortunate that some of your colleague rather have a shouting match than a discussion to get to some suggestions on solutions.

Kuddos to you!

"success have 1000 fathers, failure is always an orphan" – you exactly contradict yourself by solely blaming AIG for this mistake, and not any ordinary americans.

I don't know if your kind of thinking should be shamed or pitied.
Are you really that cold hearted, or just need to have your head removed from a dark area of your body?

If the basic principle of right vs. wrong does not prevail for this deplorable action then how can there be any hope whatsoever for America to pull together?

Shame on you and the scum you stand up for.

It is so interesting that the author of this article hides behind the argument of class warfare. Her suggestion that honest hard working people must just surrender the limited resources they have and not be upset when the so called brightest, talented and overpaid wall street guys (from the so called reputed B-schools) behave in a reprehensible manner. There is nothing wrong with capitalism per say. It is the brand of capitalism that we in America follow that needs to change. As far as my basic knowledge goes, true management principle laid down by management gurus of the past is "Rewarding excellence". Certainly, what is happening across the landscape on wall street does not reflect that. I have never invested a single penny and I know I never will. Considering what is happening out there, my decision is well justified.

Hi all,
I am really confused, while I understand the bonuses are a comitment, how much of a comitment would they be if AIG did not receive the bailout and failed completely. There would be none!
Many times when companies get into difficulties they ask lower wager earners to give up, well clearly the reality many do not realise is why do you want a many low income earners to to give up so much when it is easier to approach a few high income earners and achieve the same finacial goals!
The big boss need to give AIG a bailout as well! if they do not beleive they should then they are saying they do not beleive in the company!

AIG was effectively nationalized when the US govt became an 80% owner. The management and board should have been replaced at that time and it seems we would not be in the position we are in now...people who stole value are now taking cash. I hope the Obama administration has the will and political skills to nationalize our troubled banks or this is not remotely the end of our troubles

Yes, there is plenty of blame to go around. However, as a middle income taxpayer, I think it is a slap in the face to take money I have helped provide to keep a business from going under, then pay employees that kind of bonus. How did they earn that bonus? If I performed as poorly at my job, I wouldn't be getting a bonus, I would be getting fired!!

Never had anything, never going to have anything. As a vet I paid for your Vietnam War, as a worker I scarificed my 401k to get a college education which my employer ignored, as a home owner I am paying twice what my home is worth and as an individual I never married because nothing is permanent! This is a sad country!!

WE did not get into this together. I was not consulted when Wall St. decided unregulated credit default swaps were a good idea. They did not understand the derivitives market. I did nothing wrong. I worked hard. I saved. I payed my bills. I did not make a fortune. I did not get involved in ponsi schemes. I kept my head. And now Wall St. is handing me my ass. Thanks.

all of the bailout money we're spending is total BS.. let's get real.. AIG and others should have been forced into bankruptcy, so that, all these crazy contracts could have been voided or amended.. the govt knew that when they bailed them out..

after it's all said and done, we'll realize a lot of people made a lot of money off all this bailout BS..

americans are still asleep at the wheel.. we can't keep printing more money.. hans't anyone realized that yet??

keep your money and support your local economies.. that will be everyones' best bet..

have to agree with every point. The bonuses are still not justified. You can argue up down right and sideways, but if the salary is 300, then it is paid over the year, not well here it is. I know thousands who would love to make 100k a year... and are qualified
Tax them and put the money back in the Treasury. The argument that if they dont get it they will go elsewhere just doesnt hold water. Who will hire those who ran the company into the ground. I sure would never hire them. And I doubt many others would either

I want to comment in support of Ms Schlesinger's position. I don't question the ire of the public so much as I question the decision for the bailout in the first place. Clearly many mistakes were made to help us arrive where we are today. Most, in my view, were errors in judgement by many in Congress as well as the management of these companies. Barney Frank and Chris Dodd and many others that were receiving campaign support from AIG and Fanny and Freddie did not want to change anything for fear of losing that support. It is a matter of record that Congress was made aware of the 'house of cards' and refused to take any action. Now it will be their responsibility to fix it or face not being re-elected.

Bull-pucky... I want a bonus now. I am a majority shareholder in AIG and I want my bonus. I want them to be broken up and sold off immediately and my money returned. They are not too big to fail, no one entity is too big to fail. They are only that important in their own mind and if they can convince others then they get to keep coming back over and over for more of my money to the tune of what?... $3T? Get a grip on reality, break them up, sell off what is viable and STOP throwing money down their SH*t-hole. Is stupidity still rampant in Washington, is it catchy? Allow it to happen, allow Citi, BOA, and all the other large financials to fail, let the toxic assets to find their own level, quit trying to create another artificial bubble. Not everything will fail and what is left will handle our financials. We actually don't actually need them, they are simply a convenience. But thanks anyway, I'm not buying any more.

MJ Richards

"We got into this together and we will emerge from it together”

After working for years in small business employment (which never, EVER "trickled down" to the employees, (therefore, no 401K, no health insurance, no bonuses, etc.), and having lived responsibly and very frugally, with belt tightened – for years....

Having done absolutely nothing to contribute to this greed-based meltdown, now I have to deal with cancer. Without insurance, too much disability income to continue with medicaid, and not disabled long enough for medicare – just had to cancel another doctor's appointment.

NO, not all of us created this mess.

The issue here is that these bonuses are based on profits that disappeared based on the decisions these "best and brightest" made. Corporate and Wall St. executives have been treated as though they are royalty. When there are no profits, the government puts in bail out money that is tantamount to bankruptcy. These should not have been paid and many that were paid over the past 12 years should be clawed back.

AIG should have been allowed to fail. Then all of those contracts would be null and void, the gov't could have sold off whatever there is of value and we wouldn't be in the hole for BILLIONS of dollars with no end in sight. Every employee at AIG should be grateful for still having a job, NOT whining about not getting a massive bonus!

The firm I work for also pays us a bonus. This bonus, while part of the overall compensation package is considered "at risk pay". When the company does well, you are eligible to recevie a bonus. When the company does not perform well (not meet threshold targets), no bonus is paid.

Why is AIG or Wall Street different? Greed.

As I see it, without the government bailout money, AIG would be out of business and these "bonuses" couldn't have been paid in that case. These folks would be in the unemployment line like 4 million other folks. Lots of folks like me are working shorter hours and taking pay cuts just to keep a job. They should be grateful to have a job. Maybe their personal performance was OK but for all intents and purposes the business failed and doesn't have the bucks to pay them. Taxpayer money shouldn't be part of the deal – it's not their money.

Jill- Get a life. While you have managed to wrap your Wall Street logic around HOW the bonues were paid, you unconconvincingly dropped the ball as to WHY they were paid. Because AIG owed bonus money to execs who drove the company into the ground, and er,.. let me explain,..er, that's just the way it is.... Jilly, you have put on display the insulting, arrogant, small minded, elitist, and self-serving qualities of your elitist out-of-touch ilk. Oh, and did I mention elitist? As one blogger put it, 'legacy' is irrelevant when a company is now 'on the dole' with the American taxpayers buckeroos. Tell 'ya what, why don't you just cover the 165 mil of American taxpayer money that was shelled out as grab bags for failure. Since as you put it, "this was a mere fraction of the total amount AIG received " How insignificant....... Oh, and by the way, I hope Jennifer with the $300K salary from ABC securities doesn't step over former $50K per year homeless person on her way to the bank, since this is probably all their fault for getting into a house they couldn't afford.

I completely reject Ms. Schlesinger's article. This type of thinking is bogus. For many years we were all told the financial crowd was the best and brightest and only they could understand the risks and make a profit at it. It is very clear that they were making bets they could not cover and want taxpayers to pick up the pieces. Privatize the gain/socialize the risk.
Another bogus argument for these unconscionable payments was they were needed to retain staff. About 15% of the staff took the taxpayer funded bonus and left.

Rude behavior by the other guest and unprofessional behavior by CNN's moderator aside, Ms. Schlesinger still comes off sounding like an apologist for Wall Street's enormous sense of greed and entitlement, most likely because she is herself a beneficiary of the Wall Street compensation system. Hmmmmm.......Executive vice president and chief investment officer of StrategicPoint Investment Advisors and Financial Advisor – Special to CNN’s American Morning. Ms. Schlesinger, why don't you tell us what your own "total comp" is before you attempt to lecture us about scapegoating "greedy Wall Street." I daresay that your own lifestyle, annual financial compensation and sense of entitlement are equally outside what most Americans enjoy.

If we could point to just one bad apple here I could grant you your point about not needing to villify all of Wall Street, but unfortunately, we continue to treated to a steady stream of unethical, ego-centric scions of Capitalism (e.g. Bernard Madoff, Allen Stanford, et al), not to mention John Thain and his $1.2M office/bathroom renovation. And it's the seemingly endlessness of these bad actors that really makes normal, hardworking people very, very angry.

Every now and then we, the normally powerless, are able to enjoy a moment in time when the confluence of a devastating situation allows us to wield the favorable publicity seeking, pseudo-righteous anger of our so called popularly elected representatives to thoroughly whack the living daylights out of some group of people who deserve a good whacking, but who would normally be untouchable. And this time that group of people happen to be you and the rest of your Wall Street ilk. So please, let us enjoy our moment. All too soon the situation will eventually right itself and we'll go back to being paid $10-15/hr by people like you, and lip service by our ploiticians.

I should have watched the interview before commenting...

One last comment – Jill, you walked into the controversy by comparing how partnerships split profits to how bonuses are contracturally required regardless of profitability. The partnership example actually reinforces the fact that bonuses are not deserved when the company loses money. Taking taxpayer provided bailout money to pay them just reinforces bad behavior.

Furthermore, as frustrating as the interruptions were, you did not handle them well.

I love how it is referred to class warfare only when the middle class want justice for the upper class. For the last decade the upper class has been fleecing the middle class without conscience. Middle class slaries have stagnated, while the upper class has made millions in bonuses for quality of work that would get a cashier fired. What you call class warfare, I call class "correction."

Since this is on CNN I'm not surprised that most people are missing the point here. Anger at AIG is misdirected here. While there are plenty of scumbags on Wall St., there are plenty in every profession, and if they were smart enough to get a bonus written into their contract, then good for them. The dolts who complain about it are jealous. Too bad the jealously didn't motivate them to have more ambition or work harder. The only person responsible for your outcome in life is you! But I digress...

If people want to be angry, point your ire towards Washington and people like Senator Chris Dodd who specifically added an ammendment to the Stimulus Bill that specifically allows AIG to pay bonuses of this sort. Congress could have specified that none of the TARP money or Stimulus cash could be employee compensation, but they didn't. In fact, since Senator Dodd received the most campaign cash from AIG of any member of Congress, you could speculate that Senator Dodd added this amendment on purpose regardless of his feigned outrage today. As is typical, our Government is responsible for creating this environment, and now we put our trust in them to fix it. Now that I think of it, look in the mirror – that's who we have to blame – you and me for putting these clowns into office.

The problem with the argument of Ms. Schlesinger is the following: Imagine the situation when the government did not bail out AIG. Would the executives have received the bonus? They would have lost their jobs leave alone the "bonuses". To me, it seems like they were being paid a whole lot more than they deserve. Otherwise, the company would not have been in such a bad shape requiring a bailout.

Where was Ms Schlesinger when the auto workers were forced to renegotiate their contract for the auto bailout? Were those contracts not sacrosanct? Why was it acceptable to strip auto workers of their contractually obligated salaries and benefits in order to receive government money, but unacceptable to do the same for AIG workers?

Ms Schlesinger talks of class warfare and she's right, but it's coming from the other direction; we have a superclass of elite, entitled nouveau riche who believe the world is their oyster and that the rules are meant for others. it's gonna be a hard fall for these guys.

Am I the only one thinking that the opposite of "populism" is elitism? I feel terrible that AIG execs can only afford ONE new yacht this year.

This defense of the "performance bonus" is based on a fallacy that the employee satisfactorily performs his/her job duties. I would argue that in the AIG case, the executives in the financial derivative unit totally failed in their job performance. How else can you say about their actions or decisions that nearly bankrupt the company? In a company with more accountability, they should have been fired instead of being rewarded.

What exactly is the purpose of "defered compensation" except as a reward for goood work? I am sorry that the AIG employees have apparently lived beyond their means and used bonuses like salary, but that is not my problem.

Perhaps AIG should publish an accounting of who did not get bonuses due to poor work, then we would know that they have punished the bad apples that led to AIGs failure and would feel better that AIG thought it through.

The unfortunate results of capitilism and individualism is that we tend to forget that our actions affect others. Every executive who requires large bonuses to do a good job takes money from the budget to hire people down the line who do a good job without tons of monetary bribes.

I worked in financial services for seven years. I understand the compensation expectations and structure. Your argument holds no weight whatsoever! All parties need to take accountability for their actions and it should start with AIG! It's important to keep an open mind in a crisis, but you are dead wrong. Shame on you for your commentary!

Once AIG was nationalized by the US Gov. and now that it is 80% owned by taxpayers, the $400 million compensation contract became a worthless piece of paper. As worthless as the pieces of paper bought, sold, and traded by AIG's risky/shadowy/unethical employees.
"Populist Anger" that is derided as irrational, is entirely rational. There is no defense whatsoever for these bonuses.
The "Class Warfare is Unfair" argument is an easy out, a way to change the subject. It is given by rich knuckleheads that need to justify their greed. As far as who should be blamed, haven't millions of Americans had to foreclose on their homes. How many Wall Street executives lost their jobs?
"There is a need to retain the brightest workers" doesn't fly. Run by me how these financial wizards that found new ways to hide the true value of their financial products were as blameless as the now jobless hardworking American that got the short stick from their predatory mortgage.
As long as their is a lack of regulation, as long as conservatives convince the American public that "the government" is the problem, greed will always trump ethics & responsibility. A self regulating market a la Alan Greenspan is about as sensible as giving speed to a group of Kindergarteners.

More out of touch with reality rationalizing. I own a business and have employees who receive bonuses. Nothing makes any sense about how these compensation packages are structured. Unlike AIG and the others, I can't afford expensive top-tier lawyers but I don't need them to know that you don't structure any bonus that doesn't take into account ability to pay the bonus relative to financial condition of the company. NO ONE does this in business who I know or have ever heard of, until this. No wonder AIG is fundamentally insolvent.

So here is a mock ludicrous bonus structure example if I'm AIG. "We will pay you $300,000 salary and a $1,500,000 bonus based on performance. However, excluded from our definition of good performance will be greedy self-interest, the financial failure of your own division and the company overall, your ridiculously short sighted and unacceptable decision making about risk, your own failure to see the house of cards that you yourself were building, failure to warn your bosses about what you "should" have seen coming long ago, and the company's financial inability to pay.

These are not bonuses for performance. It really is deferred compensation with a no-strings attached what-so-ever. But if that's true then why call them bonuses at all. Why not just straight salary. The reason? – they were intended to have strings attached. Why were they afraid to pay them straight salary?

What was the point of the deferment? Somebody should explain that – What was the point of the deferment? It makes no sense.

You are missing the point, Ms. Schlesinger. I agree that the debacle over "deferred compensation" only accounts for a small percentage of the bailout money. It is, however, a symptom of the dysfunctional sense of entitlement that is seemingly endemic to the financial sector. Why are these employees being paid so much to perform a function whose results are, by all current accounts, dependent largely on luck and public perception?

Your assertion that Wall Street's early compensation model is the norm today is faulty. As you said, the end of year profits were split to determine bonuses. If this system was still the norm, your Jennifer's compensation would differ in various ways:

1) We can't quanitify the deferred compensation because it is determined by splitting profits, and we can't predict what those profits are going to be ahead of time. Furthermore, these profits shouldn't based on her clients' investments; they should be based on gains. Those aren't realized until the client makes sales. In fact, to be completely ethical about it, they shouldn't be realized until they are moved into stable accounts (bonds, savings, or CDs). Otherwise there is no guarantee that the client has actually made money. If Jennifer makes a sale, takes a comission on the profit, and makes a bad reinvestment, the client is out of luck while Jennifer enjoys her comission. This lends itself to moral hazard. In other words, Jennifer shouldn't have been promised $200,000 to begin with.

2) Jennifer wouldn't be getting anything in the way of deferred compensation this year because sales are not turning profits right now.

3) The partners took very low salaries. $100,000 is not a low salary. I have a Masters Degree in Computer Science and 8 1/2 years of experience in the software industry and I have yet to reach that level of compensation. According to the reports we're getting, though, Jennifer's compensation is relatively low for an employee in the financial sector.

There area few things that you forgot to include you selfserving wallstreet spin doctor! Since you like to dumb it down and make it simple allow me to break it down in the simplest terms that I see it in...

FIRST: The money that those "defered compsensations" are paid out from under the prior agreement when business was good would of came from profits the company should have made in a time of profit... this bailout is not "profit!" its MY money and not to be given to the people who failed to DO THE RIGHT THING or a GOOD JOB or sound the alarm! This money is not theirs, it's a tool borrowed FROM THE AMERICAN PEOPLE by those who created this problem to use and get us out of the mess they created!

SECOND: Your excuse for the distrubition of MY money to these wolves in wolves clothing was that it was to make possible for AIGs ability to retian "the best people"... these wolves are off to their Hampton estates or sailing in the gulf while the Worlds financial system melts down. They are not still working for AIG; they took MY money and ran... and are not looking back. I want my pound of flesh!

You are trying to pass this off as acceptable by SWITCHING the bonuses that were "performance based" for this BS term "deferred compensation"... if its performance based, they loose because they failed... FLAT OUT FAILED at their job. and if its "deferred" well its still deferred and should be paid by the profits made by AIG and its company, not cut from my tax dollars. Those dollars are loaned to them to DO THE RIGHT THING and fix the problem your "best people" created!

These pirates sailed the ship stright for the reef and then took a life boat made out of my money and jumped ship... now were on the reef.

Thank you for coming back and giving us your insight after what had to be a frustrating experience. Any explanation that furthers our understanding of this situation is appreciated.

I understand they were in thier contracts before they received all our taxpayer money....but if they never would have received the bailout then they would not have gotten those bonuses. Even my 10 year old son can understand that.,..It is a shame that you say it is in thier rights to get a million plus and then leave the company. That is why we are in this mess to start with!!! You are all greedy and you are all stealing from us the taxpayers and shame on you all!!!!

Maybe I'm missing something. These people deserve bonuses because we cannot allow the brightest minds to get away? Sorry, but we are in the mess we are because of them. (Yes, and those who had to have more than they could afford). Do they really deserve the millions they are being paid after the mess they have created? Oh, millions of federal tax dollars by the way. Please, cry me a river. If they are the brightest we can find then we are in deep trouble. Rather than pay them to stay how we give them a swift kick to help them out the door.

I wasn't able to view this mornings program, though I would like to respond to what I believe is a fairly accurate analysis of the current situation we find ourselves in with one exception. I don't disagree that good governance and risk controls could have avoided
the problem we have today, but your mention of "Class warfare"
and your suggestion that we, "...stop shouting and start talking like
responsible adults..." perhaps misses a reality of the legislative
process (perhaps deficiency would be a better word). These firms and the people that run them have a whole army of lobbyists that spend titanic amounts of money defending their interests. Unfortunately, that is their right, but individuals have no means to effectively negate the influence of these lobbyists and those they
represent other than through overwhelming popular sentiment Which, usually manifests as a vilification of the segment of the population that most epitomizes what is detested. In which case, I don't believe public opinion is wholly out of line in regard to AIG's higher level employee compensation packages. Do you?

Ma'am:

Please do not imply that any large number of Americans believe that the bonuses paid to AIG executive are even a significant portion of our overall economic woes. That is most condescending and is certainly not widely believed.

However, when AIG is in serious enough trouble to come to us (yes, the government, "we the people") and ask for money to prevent a complete collapse of one of the largest insurance companies in the world, then we have both a right and an obligation to attach reasonable conditions to those funds. You are correct, the government did not.

You are also correct that it appears AIG was legally obligated to make the bonus payments. But to call these normal types of bonus compensation is an utter falsehood. Deferred compensation is almost always discretionary, as even you noted. And it is almost always based on at least individual performance, if not linked to corporate profitability.

I would last make an ethical point: if the employees eligible for these payments had a shred of honesty, they would either decline the bonus or donate it to charity.

To say that the AIG execs are the cause of our financial calamity is not true, but they are a damn good example of one place where we lost our way.

Finally someone is speaking some sense. This hysteria over "bonuses" is out of control and mostly because on air commentators have not done the homework to understand that the majority of bonuses are deferred salary.

Yes, at the very top there are senior managers getting million dollar payments that probably do not deserve it, but the bulk of that $160 million is going to everyday workers that had little say in the risks the firm was taking on.

$300,000 in New York City allows you to rent, not buy, an 850 square foot 1 bedroom apartment. Forget having a wife and kids. You can’t afford it.

I am so tired of the un-informed anger that I am now rooting for these contracts to be voided. When contracts become meaningless and the government sets pay scales for financial firms it won’t just be AIG that collapses. Maybe when we are all wallowing in our own ignorance we will learn to think twice before we burn “bankers” at the stake.

The hubris, the arrogance of these industries. And the third grader approach of federal regulators, and of media analysts.
These are the essence of my education into high finance. Thank you very much. Do not believe in the word "can't". We CAN take it back.
We WILL recover "our" investment. We SHALL remove from office
anyone found complicit or incompetent.

Nice job on the explaination, HOWEVER, the regular working person, that doesn't have all these "packages, bonuses,"whatever, ALSO has no control over any of the decision making process. Not only that, BUT, they are ALWAYS stuck with having to pay out of their "much smaller pockets".
We all know there are tax breaks for the wealthy, they have corp owned cars, drivers,credit cards, business expenses, business meals, etc, while the "average Joe", pays out of his/her own pocket for their house, car, childcare, medical, taxed to the limit, etc.
I for one am sick and tired of people with mega bucks making decisions that I have to live with (and lately can't afford) and I can do nothing about it.
It's not just CEOs and upper management if major corporations, it's politians as well.
They say union workers are overpaid – that they should pay out of pocket for benefits, etc. Are any of the people in government or these top exectutives giving some up and paying out of pocket - HELL NO -they have Pensions too !!
Americans are sick and tired of being taken advantage of – and I am seriously worried about what could come next.
If you read some of the blogs, people are taking about riots, civil war, etc –
CORPORATE GREED IS KILLING AMERICANS – AT LEAST THE MIDDLE CLASS –
WAKE UP AMERICA OR WE COULD BE THE NEXT THIRD WORLD COUNTRY!!!!!!!!!!!!!

In theory, I would agree with Jill's comments except that no other industry pays such extravagant "compensation" at almost every level without no basis in actual performance. In general, sales people are well-compensated if they achieve their targets (makes sense) and executives are well paid as they effectively steer the ship and manage the risk (makes sense). In banking, however, someone out of grad school with no experience works for a $100K salary, already gabove-average compensation, and then makes 1-2x+ their salaries as a bonus. For what – working riduculous/hazing-like hours with arguably little added-value (and definitely not any more than what a $40K analyst provides in any other industry)? The fact that this has always been part of the fabric of banking and looks to remain this way is what is truly wrong.

Did you go on the show under the misguided premise that this was going to be "fair and balanced" reporting? Didn’t you watch what happened to Cramer on the Jon Stewart show?

Come on. You like most pundits on these shows are looking for your 15 minutes of fame and you misjudged. Are you as good at financial planning as judging the media's motivations? They are there to ENTERTAIN. I hope you didn’t think you were there to INFORM.

Whose, right and whose wrong in this argument? We all screwed up. But to make me feel good, I think financial planners are to blame so you should give back all your ill-gotten gains to your customers!

I have one problem with your analysis. You felt that part of the blame rested with: "Shareholders allowed board directors to keep their posts because the companies were making too much money to make waves."

This is a legal fiction. The Board of Directors is responsible to NO ONE but its self perpetuating members.

If Congress and the New York Attorney General can not get any bonus information from Bank of America's Board of Directors and very limited information from AIG's, what power does a stock holder have – other than to bailout of all publically traded stocks?
A recent proxy statement contained the following in response to stock holder request to vote on the remuneration of executives received the following “guidance”:
"A vote by stockholders on remuneration of the Executive Committee is also not appropriate because shareholders do not have the essential basis to make an assessment. To determine remuneration, confidential information -such as detailed market shares, margins and strategic objectives – is needed, and this information can not be made available to shareholders."

Stockholders are not owners with any real legal recourse. They are de facto investors whose sole recourse is to take their investments elsewhere.

The Boards of Directors are the group that requires outside balance of their total unregulated power.

i haven't really read anything that is new and different to what has been their defense all along: AIG is contractually obligated to pay those bonuses to retain their best people, and that it is just small part of the bail out money.

it's not as if those people were given $100K each, we are talking about millions of bonuses each individual and it's coming from the bailout money, while many people struggle to find work and put food on their table. AIG was given a lease on life and yet the very people responsible for the malaise are getting away with millions of dollars under the cloak of legality. legal is not always ethical. how else can we describe these actions if it's not greed?

AIG should not have been given the bailout money. They should have been in bankruptcy. We, the hard working people, did not get any bailout for our business in this bad economy. When our business ran out of cash, the banks came in, foreclosed and sold all our assets for pennies. Our only choice is to file for bankruptcy. We don't and will never understand why AIG is given special treatment. We will never accept this kind of unfair treatment. When we hardly have any money to buy food for ourselves and our children, AIG gets bailout and their people who have successfully screwed our lives get to be millionaires. From the beginning, we are told that we will have to sacrifice to save AIG for the sake of our future well being. So, has AIG became our GOD that we need to save at the cost of our or our children's lives? Should we now knee down and bow our heads to pay respect to AIG for being our SAVIOR?

The commentary is illustrative of the disconnect between the financial community and the rest of the populace. As a financial analyst it is easy to see your opinion is with the financial community that doesn't understand the rest of America. Most everybody else is suffering, losing jobs and is in the depths of despair largely due to the immoral actions of the financial community. The financial community however does not share in that suffering as they keep their high levels of compensation as they are bailed out with money taken from those that are in dire straights. Is it any wonder then that people react with extreme emotions to hear that? I would caution that without actions to counter that, such as end bonuses, lower salaries, or whatever to share in the suffering, that you could end up with a lot of serious hatred in society against the financial community.

The CNN interview was appalling. The other "guest" was unprofessional and an embarrasment. The CNN "host" was worse; who else would ever want to appear on that show ? CNN's reputation was seriously tarnished. CNN worked hard to earn it's reputation. Sad to see the profound slippage that has occured here. A change is needed in that time slot. Several of us will not see such a change as we are not watching CNN anymore at that time.

I do disagree with most of your points. However, you were correct when you observed that we need to talk like responsible adults about this mess. Such a discussion certainly did not occur on CNN.

Finally, CNN did itself no favors by allowing you to post your comments in another medium with far fewer observers. This is a lame attempt to correct serious malfeasance. The only way to rectify even a portion of this sad event is to put you back on the air. You should appear on a different CNN show; we will not be watching American Morning while that "host" is still on the air. That goes double if the other "guest" ever appears again anywhere on CNN.

"Without a guarantee, many would have fled the toxic environment and left AIG in an even deeper hole." - toxic? where is the proof for this? These were the same ones that brought it along! Plus, just like the rest of the industries are suffering from pay-cuts and layoffs, it should be the same in this 'industry' also (if you hate it, you don't deserve to thrive). You don't even make a point here – this is plain rubbish. what about the 11 (that we know of) that left after taking the money? how is that justified?
--
"Yes, the second part of her pay is discretionary, but in most years, as long as Jennifer performed her job and her business unit did its job, she would earn $300,000." - the catch here is 'in most yrs' .. dude, do you think there aren't people who are sane or who don't know how wall st works? this year and the last one are most definitely not ordinary times ...

Blasphlemy! Its all double-speak in favor of the rich and greedy. I work 40 hour work-weeks including a day or two a month on weekends. I'm lucky to see an annual $500 bonus at the end of my performance appraisal cycle (as determined by my supervisor) only to see greater than 2/3 of it gone to taxes. I will not see any piece of any federal stimulous money because my state had to raise taxes to the highest level in the history of this country due to the consistent incompetence in the state capital. It is my opinion that the government should withdraw ALL monies GIVEN to AIG, including all the non-worthy bonus money to the few select individuals who probably never worked a day in their life with a real job. Let AIG stew in its own crap that the few irresponsible individuals created. End of story.

Hi Jill,

While I agree with the premise of your argument that there should be less shouting and more conversations about this issue (AIG bonuses), I disagree that tax payer money should be used to pay these outrageous bonuses. I actually prefer to listen to channel Thirteen/WNET because I am tired with all the shouting that occurs on Cable stations.

It is a shame that those who may disagree with you would spend the time ripping into your views, rather than having an intelligent conversation on the issues. As a listener, I would like to get the views of both sides so that I could take a side in the argument, but it is difficult with all the noise that is on Cable.

Although I do agree that based on an agreement made to an employee that their bonus is based on that individual's performance, they should receive the money regardless whether the company made or loss money. AIG's problems are not normal loss or profit financial conditions. If the government did not provide tax payer money to prop up the company, AIG would have ceased to exist. Therefore, the employee in this case more than likely would not have received the bonus.

I also agree with you that there are gray areas as it pertains to most situations, but in this case it is no long a gray area, but black and white. Why, because the company was about to go bust, therefore, your argument no longer holds up. Basically, my tax dollars and yours as well, are paying this person's bonus, although I did not have anything to do with deciding this person's compensation.

Handel

reminds me of Marie Antoinette

I always thought that a bonus was paid on performance. If taking a company into the tank is called "performance" then maybe I've been looking in the wrong dictionary. It's apologists such as Ms. Schlesinger that allows these creeps to exist. If they had pulled something like this in China, their kangaroo courts would have executed them immediately after the trial. Yes, it's a great country that allows crap like this to happen.
Also, to the writer that stated, "Karl Marx must be smiling. I hear that Albania is nice this time of year". I would be willing to pay for a one-way ticket there, with one stipulation, don't come back, CREEP!!!

A family member making $13.00 an hour recently had to take a $2.00 an hour pay cut because of the state of the economy. His company received no money from the government. How dare you defend paying these thieves their expected income? Everyone else around the country has to sacrifice, but the people who caused the crisis get the ridiculous salaries that they were promised?

It's not so clear that AIG is in fact contractually obligated to pay these bonuses. Has Ms. Schlesinger read any of the contracts in question? Are they public information? (I doubt it on both counts.) I say let those who think they are contractually owed bonuses bring suits on the contracts. Make them stand up in court and whine for their money. There are things called "affirmative defenses" against such suits. Maybe the people who ran AIG into the ground aren't really entitled to all that money. Maybe the contracts are fraudulent. Maybe those people didn't actually perform under those contracts. Maybe the plaintiffs won't get anything. Maybe they'll settle for less. Maybe they'll be too ashamed to sue in the first place. And who can say the world would be worse off if these people flea the toxic environment they created? It's seems odd to simply assume we really want to keep these people around when they are likely at least partly responsible for destroying their own company. And where are they going to go, anyway?

i am pretty sure there are a 100s more willing to work for the millions you are 'throwing into the river' if only that would become their daily bread. i am pretty sure a few brainstorming could effectively duplicate the decision that these execs can conjure. we don't need no stinking Adrian Veidts.

Thank you very much for your input on this subject.

I have a simple question, if my tax dollars did not go to bailout AIG would Jennifer still receive her $200K?

AIG can only pay out what they have in their bank account, My guess is that if WE did not pay for their bailout, then "Jennifer" would have been told " Sorry Toots" by AIG management.

I had the misfortune to be employed by two companies that went belly up. Both owed me money. I was simply told to fill out some paperwork and "get in Line with the other creditors" , Guess what ...I never saw a cent!

This is ridiculous because if AIG had been allowed to fail or even an orderly bankruptcy then Jennifer would have been out of luck. No Bonus or any other form of compensation.

That is why people are so angry. Don't get me wrong I'm just as pissed at the government for not putting some controls on the money handed outright to AIG ..but to say this is just "business as usual" OR " the way things are done" ignores the cold hard business facts.

Ms Schlesinger:

I believe this issue gets to the heart of where we are today. WallStreet should be able to act ethically, without the guidance and requirement from our government. Why should it EVER have to be said that bonuses should not be allocated to company execs when their company has received bailout funding from the hard working taxpayers? This is not the american people looking for someone to blame in a crisis situation. This is an opportunity for us all to stand up and say it was wrong, and to enforce a change so we can move forward as a country.

Also noteworthy, I am a Corporate Financial Advisor and I fail to understand the simple math here. Bonuses are tied to good performance, so where is the lie here? In the performance results? or in the need for a bailout???? please help me understand that one!

I am not a college educated person, yet I am VP of Marketing & Sales at my company and I sit on the Board. I own three houses – two of which are rentals (one fully paid for). I have money invested in other areas as well and therefore am diverse with my investments. I never have credit card debt and I have money put away in a savings account for "just in case." I do not make a three figure salary, but make a very decent salary and enjoy my job. Yet, some people say that "we" all got ourselves into this mess by spending more than we save. I can say that the majority of my friends live the same way as me and they too are angry at what has happened to our country. It is greed on many people's part, but there are some of us who did all the right things and yet have to suffer because of others. The housing market was way too inflated for the past 3-4 years. I could see that a long time ago - I could not figure out how the builders were going to fill up all of the houses/condos/apartments/retail space being built all over our U.S. cities and suburbs - where were these people coming from? Statistics had been showing that our population has been decreasing over the years. I saw many people purchasing homes that I felt could not afford the homes they purchased and just knew it was a matter of time before they would be in foreclosure. I saw salaries skyrocketing which I knew was going to cause us many problems in the future because that meant that minimum wage would drastically increase and hurt small businesses – the largest employers in our country. Many business men that I talked to last year and this year said that "no one thought it would end." Come on people! We are an ever evolving society. Everything ends at some point. Our economy is cyclical – there are always good times and bad times. How could they even think that "it would never end"? How is it that the highly educated people of this world didn't see any of this coming? It truly amazes me because it didn't take a genius to know this was going to happen. I certainly saw it coming.

Consider the same Jennifer example. Say the company has no money to pay Jennifer (she did an excellent job), would the CEOs pool some money in to pay her? dude, this is exactly what has happened!

Ever heard of Seppuku??

Reading all the comments, frankly I'm baffled by those that continue to defend a system that rewards greed and crime. Watch a road crew work, and watch an investment banker, an insurance broker and an investment broker work. Frankly, I'm ot much interested in your rational.

The people in question stole from the American investing and depositing public trillions, yes, trillions of dollars long before their overwhelming greed finally came to light. Last fall, in one day, a trillion dollars of American investors capital was redistributed out of investors hands – it didn't just disappear.

If the apparently small group of people defending these astronomical bonus's, performance compensations, performance incentives, legacies or whatever this week's favorite term is – realized that this incredible amount of our nation’s capital is being taken out of their pockets as well as others – they might be as much outraged as the rest of us.

And what is wrong with class warfare? It happens every time those that can't control their greed accumulate enough of a society's resources to piss off the masses. As soon as the majority of the population have nothing left to eat but "cake", and no real opportunity to improve their lot through hard work and investment – out comes the guillotine. People don't like getting screwed. That shouldn't come as much of a surprise, and, at this point in our history, most certainly shouldn't be ignored.

When we have the least trustworthy among us handling all the wealth and its attendant power, what would one expect to happen – functional democracy? And wasn't Karl Marx a prime instigator in a class warfare revolution when it became impossible for most Russian citizens to find sufficient food and fuel?
Maybe I’m just not an advocate of a system that encourages us to screw our fellow citizens until they can’t afford groceries or a place to live – and have no compunction when doing so.

Ms. Schlesinger, your 'analysis' still leaves too many gaps, and your opinion seems to leave out one very distinct fact, i.e., we, the taxpayers, now own AIG, and the government, as our representative in this “deal’ from hell, is certainly permitted to address where our money is being spent. This ‘bail out’ was necessary due to the incompetence of the very people who are getting paid these ‘bonuses.’ How dare they pay themselves off with the ‘charitable donations’ of taxpayers that allowed them to actually have a job when millions of taxpayers are losing theirs?

As an attorney, who was a partner in a law firm, I had a contract based on a ‘draw’ and ‘deferred compensation’ calculated on the profits we made at the end of the year; and if we made little or no profit, we did not receive our deferred compensation. i.e., ‘bonus,’ or it was reduced accordingly. What group of bone-headed executives at AIG agreed to give out 'bonuses' to people no matter what the profit structure of the company turned out to be, especially when they knew the economic situation they were facing, and after they took taxpayer money to stay afloat?

If AIG did not get the billions in charity from the taxpayers, it would have to declare bankruptcy, and then NO ONE at AIG would be paid anything, and certainly not those people who received ‘deferred compensation.’

Finally, one argument I keep hearing is that this type of payment is made so that the recipients will not leave and go to another company; apparently, they are too valuable to lose. I have two responses to that half-baked argument: first, many of the recipients already left, so that part of the argument doesn’t hold any water, and second, since these people drove this company into the catastrophic position they now face, they should be fired, not rewarded. In other words, good riddance!

you seem to say at some point 'bonus or stock option' ... we don't mind stock option ... let them all get all the stocks in the world now ,,,,

Schlesinger is right that this should not be about the dollar amount. If one makes their company millions then a million dollar bonus is in order. The fact that the majority can not make their company millions does not make the bonus any less valid for those who can.

However, when one makes mistakes, whether systemic or not, they must bear the consequences. My company is having a rough time in this economy and employees who are not at fault have lost their 401k matching and are going to endure mandatory time off. Why then should AIG's employees fare any different?

Your comment ... "You are dead WRONG. There are people out there with no jobs or low paying jobs that are struggling to pay their bills. There is NO ONE in the world that deserves millions of dollars in bonuses. Go work in a factory for 8 hours a day, collect your check on Friday, dead tired, and then read the tax line on your check and realize those taxes went to people who are sitting on millions of dollars. Frustrating."

Sorry... but I worked 4 jobs to put myself through college with my own $ so I didn't have to work in a factory. People are free to negotiate any deal they can when getting paid. Sounds more like sour grapes than frustration.

everything about this is wrong. a company that shouldn't exist is paying it's (ex)employees (who have proven incapable of performing their jobs effectively) performance-based bonuses with the hard-earned money of other people who, because of the actions of this company and it's industry, can't afford to keep food on the table or a roof over their heads.
these villians may get their money now, and they may even get to keep it, but the evil they embody is something no deferred payment will wash clean. their blatent disregard for the well-being of the society at large (that has supported them for so long) is the most shameful aspect of the entire situation. there is not a single shred of decency in anyone that accepted a bonus from AIG.
a time will come when these people will have to answer for their despicable behavior, and on that day there will be no bailout to save them.

This is a vapid attempt at justifying a reward for non-performance. Attempting to justify the "comp" structure by saying profitability (that is performance) was not "part of the deal" is beyond absurd. Profitability is always part of the deal-are you some kind of socialist? The reward to those who believe profitability is no longer "a part of the deal" everywhere else in the business world isn't a bonus–IT'S A LAYOFF.

It's better to be quiet than to attempt to defend the indefensible.Everyone on Wall Street isn't greedy because they earn high pay. However, everyone on Wall Street (or anywhere else) who believes poor performance by an individual or a company should be rewarded by the usual bonus is DELUSIONAL. If you further believe that taxpayers should fund part of this lunacy, then you should consider institutionalization.

Many of these comments are pure class envy.
People are making assumptions on the subject that have no idea what is in the AIG contracts for the bonuses. Contract bonuses do not have to be tied to company profitablity. May not make sense but it happens.
NO ONE (not even Ms. Schlesinger) has even mentioned that Sen. Dodd wrote in a provision to the Stimululs Bill that exempted contract bonuses agreed upon prior to the Feb. 9, 2009.
Just another example of what happens when incompetent politicians rush to provide a fix to a crisis!
The best option was to let AIG go into bankruptcy and there would have been no issue. Thank you Federal bailout folly.

While i agree that, in the broad scope of things, the $165 million isn't much, I am still dismayed at the way wall street continues to work....and I'm an MBA, CFA, and former investment manager! These people are earning compensation for MAKING the mistakes that drove this economy into recession. So the whole idea that we need to compensate these people because they are the "best and brightest" is false on its face. They're not bright. Just greedy.

Nice try, but as to the argument that the bonuses are contractually required, let the employees sue to recover their bonuses. Even if they are really required, let them come into open court and explain to a judge, better yet a jury of unemployed, underemployed, or hardworking taxpayers, why they should get bonuses (at least 73 of them over a million dollars each) for creating a mess that the jurors (along with the rest of us) have and will pay for.

If they can convince the jury that AIG should have paid them, then maybe it should pay them, and add on whatever interest has accrued since it should have been paid. If they lose, they should be required to sell some planes or yachts to at least cover AIG's (i.e. our) attorneys' fees for the contract litigation.

So why are we paying them?

Good Point. Many of the employees that were not responsible for the bad decisions of wall street should not be punished. They have been punished just by their company stock being wiped out, and seeing their saving drop with the market as well. They too are citizens and taxpayers as well and support families just as many here who have commented. It shocked me to see crowds of people screaming and attacking workers getting on buses as they left work for home. They should have been protesting at the ones getting into the limos.

The reality in America is there are people who make certain wages, some more than others because of the educational background as well as the risks that they take.WE ARE TAKING THE " ITAL" OUT OF CAPITALISM PEOPLE!

If you want to really see outrage, why did congress just approve a 4 % payraise for themselves! They were just as if not more responsible for this mess by turning a blind eye. Perhaps they should limit there pay as a symbolic gesture to $1 per year until the economy is fixed or the national debt is paid off. Talk about the squandering of trillions and trillions of dollars. I dont see any reporting on this issue.

What do we do with all the people that ran up there own personal debt to get us into this situation. Throw them in the street.PEOPLE>>>WAKE UP! We have to get over the anger and work together to solve the gigantic problem at hand and not step over dollars to pick up pennies. Demand an end to political posturing. Demand and end to boards of directors that are asleep at the wheel. Its easier now . their stock is cheap . Buy a ton of it and vote them out. More so...hold the regulators and the politicians responsible an demand they stop their negative posturing as well.

Blame Bush and Obama and whoever else was involved in giving the money to AIG without restrictions. Its not AIG's fault the government gave them billions and did not specify where the money went. Also if these bonuses were part of contracts then I see nothing wrong with it. And from what I heard AIG's problem revolves around one particular part of thier business dealing with the swaps and the arms. If these people were leading profitable divisions, once again there is no problem in my book. Why do all of you think banks that are profitable are falling over themselves to give back money to the gov? Because they know that if they keep it they will be at the behest of Obama and Geitner and will have to accept the grandstanding from these coward politicians who decided they want to change the rules in the middle of the game. Sounds pretty nefarious to me. All you people with rage against these large companies are falling victim to the Obama thought of "White rich guys are the evil ones and those who want to blow us up arent that bad."

"One key point – how much of a bonus would they have received if there wasn’t a taxpayer backed bailout and AIG went bankrupt?"

...and Jim K of NYC sums the whole bag of nonsense up nicely in one clear question. Well done.

[...] Street must mean something different than what it does in the rest of America. And sure enough, this nice piece of explanatory journalism by CNN financial adviser Jill Schlesinger suggests I was right. In the rest of America, a bonus is [...]

I too was angered by the bonus news at AIG. However, I just can't believe many of the reactions from those living in a democratic capitalistic society where rule of law greases the wheels for free enterprise.

Here we have enterprising individuals who have worked hard through their lives to get the most out of life – and while some have stepped over the line of integrity – others have lived by the rules. We have painted everyone with a broad brush and we have judged without assuming innocence first. And the irony of the reaction is akin to what one might expect in China or Cuba – a totalitarian response to a capitalist issue in the USA? Interesting times brings out interesting responses....

What she writes is a rationale typical of management, i.e. management gets the bulk of the glory and the wealth, but problems and failures somehow become equally shared.

I saw the two of you sparring yesterday as well when Kiran was interviewing you, Ms. Schlesinger. I understand that you are explaining the Wall Street culture and pay structure over the past 50 years, but it still does not make it right with what is happening right now. There's no way in hell that I will agree to allowing these people to receive their "bonus" for pretty much helping to screw up the economy and millions of people's lives. As Kiran said, don't call it a bonus. A bonus is for meeting and/or exceeding goals. Unless their goal was to bankrupt their company and millions of people, they don't deserve a bonus, PERIOD.

All companies have their high level executives sign contracts. I can't imagine that there isn't something in the contracts at AIG stating that they could be fired for doing something that was against policy, damaging to the company, etc. We, as shareholders now, should also have a say as to who's hired and who's fired.

Yes, the culture is changing and it started about six months ago. AIG needs to get with the program and the Government, both the White House and Congress can't "assume" that the money that is being given out to these companies will be used appropriately to "do the right thing". They haven't in the past and there's no incentive for them to do it now. We need lots of strings attached and if that doesn't work, perhaps a temporary takeover or permanent breakup to protect OUR investment.

Well stated Ms. Schlesinger, but no matter what way you state it, if it walks like a duck, quacks like a duck, and sheds water like a duck, it must be a duck. Whether you call it a bonus, or retention it still comes up the same.
I have no problem with a company sharing its profits with its employee's for doing a job "above and beyond." What I have a problem with is, first we are "retaining" the same people that got the company into it's trouble in the first place. Where is the logic in that? Secondly, why would any company or board of directors negotiate a bonus of 100% of the previous years bonus, when the financial downward spiral had already begun. I am referring to the contract that AIG entered into in March of 2008 with the financial service group that eventually led to the downfall of AIG and it's need for TARP or what ever you want to call it.
Whether the government saw it or not, or if the bankers and lenders were caught up in the housing boom, (which was already in melt down at that time) or boards of directors rubber stamping bonus payments; whom ever you want to point your finger towards makes no difference. AIG should have provided that information to the government when they presented their case for the TARP. Or did they conveniently forget that part?
The whole point is why would any company make such a ridiculous contract knowing that the economy was turning downward, and it's own estimates were pointing towards a less that profitable year from the previous year.
Why would any company want to retain those who contributed to their financial crisis? Let alone 11 employees who are no longer with the company! (Where is the retention in that picture?) Must be a bonus after all! Gee I wished my company would do that for me, pay me a bonus after I've left!
I have to agree with some of the proposals that congress is throwing out right now. Targeting AIG directly may create a stir, but a blanket 60% surtax on bonuses would be a good thing for all executives that receive these huge and unnecessary compensation packages. And I would include stock options as well. Many of these executives receive stock options to purchase company stock at a lower price than current market price, and then turn around and sell it for profit. Sure they get taxed on the profit, but I would make certain that the difference in price was taxed as well, after all isn't it an indirect pay or compensation? When you consider the difference of a company stock for the current trading price and the option price could be as much as 50% or more, and given that some of those stocks trade at better than $30.00 a share or more, and some of these executives buy thousands of shares at a time, that is quite a little amount of pocket change! Oh by the way I hope congress also includes some of those "severance packages" as well in the 60% surtax thought process! Paying a CEO $11 million to leave is quite a bit of pocket change to be walking around with!
So call it retention, or bonus, makes no matter, but if those are the best and brightest, then we need to look under another rock for more bright and best, who could possibly clean up the mess!

Have these guys never heard of a clause that allows bonus contractes to be changed without any recourse to the bonusee?
And tieing the bonus amount to actual performance numbers?
Who's writing thiese bonuses? The bonusees it seems!

Hi Jill. Thank you for posing your comment. I really wanted to hear what you were going to say. I was so annoyed by the other guest.

Can the administration structure the loans / bailouts so that such absurdities as bonuses cannot occur. What is quite incredible is that it is happening over and over. It no longer appears as if these are unwitting mistakes. They just cannot be. So what is going on?

I keep hearing that companies are paying fat salaries and bonuses to ensure top executives don't leave. Let them leave. Let them join all the unemployed and see if they can find a new job. More than likely their past fat salary will make them 'over-qualified.' Nobody seems to recognize the fact that these people did not intend to leave for greener pastures because there aren't many when you are making over 100K and getting fat bonuses to boot. I know what would happen if I went to my employer expecting a 'bonus or I'll leave' – they would show me the door.

Frustrated in the other Washington

Can a law be implemented (if not already in effect) forcing AIG to return these taxpayer-paid bonuses back to the US government?

These multi-$million bonuses just COULDN'T have been part of the "contract" that sent hard-earned taxpayer dollars to AIG as a "bail-out or bellie-up" deal!

Make them return every penny to the US treasury to be put to better use!!! Why isn't that an option?? Just an idea.... Isn't there a law against this type of misappropriation of funds??? WOW....

I'm not sure you illuminated the situation any better than I had understood in the first place. I think the argument that most taxpayers would make would be "What would be the compensation package if we had let AIG fail?" I find it a bit despicable that as people are making sacrifices to get by in these trying times, that these top executives are doing no such thing – more than several have taken their bonuses and split.

I still find this bonus situation is indefendable.

"The AIG $165 million represents legacy “bonuses” that the company was contractually obligated to pay."
"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses ... if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury,"

Best and brightest? Most of the $165 million is going to execs in AIG Financial Products, the very division responsible for the practices and decisions that brought the company to its present beggar status.
So if these bonuses were not paid, the execs could sue–not to mention leave, taking their brilliant business acumen with them–oh, wait, many are leaving anyway.

The assumption, of course, is that they would win such lawsuits. Let me guess: can all the ordinary Americans who have lost money due to these guys bright decision-making sue and expect to win? Thought so. I would say, let the execs sue, and at such time as the company becomes solvent without aid from the taxpayer and is making a large enough profit, then let the execs be paid their bonuses.

Or, a judge could simply and legally rule that the bonuses are what they are: unconscionable, and thereby nullify the contractual obligation. Wonder how that would sit with Ms. Schlesinger.

Finally some common sense on the subject. I find it amusing to witness the indignation of Congress on this subject. It the first evidence of any bi-partisan efforts I've seen yet. And to think it is being displayed by the very people who put in the provision allowing these payments. Interestingly, a provision none of them will now own up to.

How do I get one of these jobs?

I understand (and share) everyone's outrage but the amount of these bonuses is only a small percentage of the BILLIONS of dollars AIG has received. Getting that "small" amount back is not going to help. (They would just pay it back with taxpayer's money they received from the government anyway.) I have a better idea. Let's refuse to give them the next $30 BILLION "stimulus" payment! Maybe that will get their attention!!!

Has anyone asked if any of the AIG bonus contracts have "gross-up" provisions? Sometimes the company will "gross-up" the bonus to account for taxes owed on the bonus. If that is the case with any of the AIG executives, a 90% or higher tax to recoup the monies will have no effect.

I thought it was only acceptable for the weather forecasters to get paid for being wrong.

I was just fired from a job by a group of multi-millionaires, because I informed State Safety inspectors of issues hazardous to children at the facility, who have taken gratuities due to minimum wage employees for their own use, refused to pay back pay due, commited insurance fraud, visa fraud, manipulated deposition testimony and run a company into the ground to devalue it to buy out a partner involved in a law suit... They spend hundreds of thousands of dollars on lawyers, while the company tanks... on top of that their comment if it fails is regarding creditors is... we're a LLC and live 5000 miles away what are they going to do... I have a CEPA claim... but no money for a lawyer and they will probably fold before a court could hear the case... the business community has been set up by lawyers so investors can open business's and never have to pay for their debts and walk with all the money made on the backs of the employees... something is not right with this picture...

Ms Schlesinger is out of touch with the reality. AIG executives that received bonuses for dismal performances should be made to vomit the money without delay.

Would someone please explain to me why many of the very same people who are outraged by the Obama administration letting a tiny 3.9% tax cut on millionaires EXPIRE, and at the same time be so angered by ridiculously excessive executive compensation on Wall Street?

You would think the 3.9% increase in taxes on people making income like the AIG executives, stockbrokers, and athletes would seem pretty trivial when widows, single mothers, soldiers, cops, teachers and firefighters are losing their homes to foreclosure because some slick mortgage broker talked them into an ill-advised ARM loan!

In the advertising world, we are taught to gear our ads to a 6th Grade education in this country, yet the general public is supposed to understand all of the intricacies of mortgage lending and real estate valuation???

Give me a break!

Its funny at all of the people that got money from AIG for reelection which includes MR BARNEY FRANK,MR OBAMA,MRS CLINTON,AND MR BUSH. And now AFTER they get there bonus everybody acts mad.I don't know just does'nt sound right

I am so glad you were given this chance to post here. I thought the 'conversation' on air was poorly moderated and allowed to become something that it shouldn't have. There is a time and place for that, but your purpose was to bring information. I appreciated your above explanation of the compensation structure, though I would like to know more about what performance issues are being rewarded. If people are doing their job, then company performance should be reflecting that, even in a disastrous economy. We all know that a company can do a good job, but be pulled down by a bum economy, but there should still be some measurement that the 'bonus' is tied to. Examples of that seem to remain elusive.

The only thing complicated about this issue is the flim flam used to try and make it look complicated. AIG sold insurance and can't pay its obligations under its policies. That is a scam. The churning of financial paper which has no real value when it lands. Getting paid very well because you can keep financial papers churning and not landing. These are also uncomplicatedly scams. The interview was rude but your comments are smoke and mirrors. AIG should sell off its varried business and pays its oblications, their financial dealers would deserve a fair payment for accomplishing that.

Ms. Schlesinger:
I read your response regarding your TV interview. I am sorry to say I missed it.
Based upon what I have read, there was no stipulation as to the rewarding of employees in the stimulus bill passed by Congress. Some may call it an oversight. I think that it was intentionally inserted.
Senator Christopher Dodd in an interview stated that he did not know how the bonus exception was inserted in the stimulus bill. If you believe that then you have a major problem.
Now that the public has been made aware of the bonuses given by AIG to some of its employees and the uproar that followed , our wonderful members of congress have decided to join the parade. Not because they want to, but because they are being forced to and are now looking for ways to retreive the money. It is the normal Congressional mentality of lets react to instead acting to prevent these problems.
If there is governmental action at any level to retreive this money, you can bet AIG will go to court and probably win. They were not legally prohibited from doing what they did.
Morally though, they were completely wrong

Bonuses of more than a million dollars is obscene in any scenario. For years, corporate execs have received these crazy bonuses even when they drove their company into near bankruptcy. There's no excuse. It's simple greed.

And no one in the industry wants to stand up to it because they all benefit from it. It's Corporate America's version of pork barrel spending.

And apparently Congress did not "miss an opportunity" to restrict these bonuses in the AIG bailout, but rather, someone intentionally added a clause to the appropriation that allowed these bonuses the go through. That's not a mistake, it was an intentional act and we deserve to know who did it. If Dodd didn't put it in there, who did?

Nobody on Wall Street, or any other street is worth a salary and or bonuses of a million dollars a year, period. If you earn it yourself good for you, but these folks on Wall Street are playing poker with other peoples money, and not doing very well.

The moderator of this interview failed miserably as did the booth director for leaving Mr. Mack's microphone on.

What is the obsession with these bonuses? It's not important and it's a distraction from serious banking and housing issues.

All the wailing and gnashing of teeth over these bonuses is little more than populist envy and class warfare.

You have got to be kidding, first of all, this "new" controversy has been going on for at least 15 years. It's tied in with the rediculous rise in CEO and upper management saleries.perks, I work for an airline, we have had five CEO's in 15 years, about 3-4 of which were profitable. Every one, CEO's, upper management, left (they always leave) with big payouts. Our labor group has been langusihing under a bankrupcy contract for years now. This big pay no matter what the company does kind of mentality has got to be stopped.

I am concerned with Jills point "I did not get the opportunity to talk about what is missing from that analysis.", not so much on the bonus question, but rather the rest of the story that is untold. When do we get to understand how we bailed out the banks for toxic securities, then discover in the underlying story, not being reported, that the banks had insured their toxic security losses through AIG and are being 100% compensated for those toxic securities? I may have this wrong, but sounds like a bigger story here. Are we not bailing out the banks twice for the same loss? We thought Bernie had a ponzie scheme going, bonuses are nothing in the grand theft taxpayer scheme here. By the way even if governement ever re-coups the money from AIG bonuses, do you really think the taxpayer or their cjhildren will ever have their tax debt credited? It will go the same way as the raided Social Security, Air TransportationTax money, and just be additional money to be spent on some congressmans pork amendment.

CNN.com seems to be allergic to letting readers know that Ms. Schlesinger's company used to use "10 Lies of the Financial World" as a promotional article. (They've deleted the long version of my comment twice.)

Google "StrategicPoint Investments Advisors" and "10 Lies of the Financial World".

When Ms Schlesinger turns to defending Wall Street and AIG's bonuses, her commentary seems to be directed to delivering a ridiculous wholesale defense for Wall Street (and/or her company's clients?) rather than truthfully and realistically analyzing the situation.

At CNN TV and CNN.com, apparently a little hypocrisy goes a long way.

This was included in the bill when the bailout money went to AIG. Now American's are outraged over something that was written into a bill. Now the Democrats want to tax 100%!? Why? They voted to give AIG the right to include the bonuses, not to mention, they were in the contracts that the employee's signed. That's a legal document.

I do not understand the issue raised by this executive. We are not suggesting that they refuse to honor the contractual obligations to the others entitled by contract. We are simply suggesting that they wait until the financial picture gets better before allowing them to draw the money out of the fund.

In all other situations, the employee is made to wait until Finance determines it to be the right time to draw the money out of the trust. Think about retirees; they go to seminars to explain the atmosphere for retiring. If they chose to leave, they may be penalized based on that atmosphere. Why are we allowing these people to hurt the American economy?

Thank you Ms. Schlesinger for providing us with your opinions in this forum. The discussion yesterday was of interest to me and I wanted to hear your opinions. Unfortunantly, you were not given that opportunity during the show. Your fellow guest was rather rude and his behavior detracted from what otherwise would have been an interesting discussion. I expected better from CNN guests. As far as the AIG bonuses are concerned, in companies I have been familiar with, during tough times the management declined to take bonuses and in some cases cut their salaries to limit the impact on the employees. Even though they probably could have taken a bonus it just wasn't ethical.

1) Bonuses are good if earned.
And bonuses should come ONLY from profits from the operation.

2) Suggestion for the AIG crisis – "economic stimuluus" for the taxpayer = pay back everyone who invested (tsa's, etc) and trusted AIG as of 12/31/08 = best use of TARP monies. Corporations should die naturally = they deserve what they planned or not planned for.

3) And, why are the CEO's of the large banks, auto mfgrs, etc that are receiving TARP monies are still running these bankrupt companies?

In other words this company should have been allowed to fail first and then the Government should have restructured it . I am sorry I did not understand the Greed of some people, I thought these people would do the right thing to preserve their reputations. I guess there is no honor among Thieves.

Well,I must say you explained the bonuses.But it seems you forgot one inportant thing and that is they're still losing money. So it would seem that no one at AIG is doing their job.They should have been fired.As far as who added the loop hole in the contracts. It could have been anyone of the money grubbers. The gov't and these big companies have their hands in each others pockets. and now they have them in ours

The Corprate CEO class is driving this great nation into the ground and all I hear is excusses.

Can you explain that if AIG insurred the bad loans from the banks, as the loan went bad-AIG with no assets could not pay so we the people gave AIG money to cover those losses. So why, if the banks were paid by this insurance from AIG (now us the taxpayer) are the banks in trouble?

Why don't we now fire those employees that received the bonuses. Let them stand in the umemployment lines. I would hate to see them remain in power without any consequences!!!!

I have a question: Would these people have been paid their obscene bonuses if the government hadn't given AIG billions in bail-out money? Would these people have been paid their obscene bonuses if the government had allowed AIG to fail? I think not! So there goes your argument; right down the toilet.

AIG bonus.

The U.S. Government should take a little blame here. They originally had no restrictions on how the bailout funds were to be used. It seems reprehensible that tax payers are funding bonuses at AIG. However, AIG was legally obligated to pay those bonuses or could face litigation and damages by CT law could have been double the original payouts. Let's move on and start cleaning house at AIG. Clean up what can be cleaned up at AIG and then liquidate what we can.

Well said but I believe President Obama has the right site picture and there will be much more scrutiny to come...AIG and its employees will take a beating one way or another. I offer this to AIG as a possible solution to their crisis...build a voluntary program within your company that each bonus recipient could voluntarily place their bonus into a trust fund. Then in 6-12 months, we will evaluate how well AIG has recovered / performed. If their performance warrants a bonus at that time, then they can retrieve bonus. This will also ensure AIG employees are working hard to solve their economic crisis.

So I was "censored" yesterday when I tried to post some relevance.

This controversy is all class envy. How is your life going to be different if the bonus money is taxed or returned?

Get real, the pols screwed this up with the provision by Sen. Dodd inserted at the last minute to TARP that exempted contractual bonuses agreed upon prior to Feb. 11, 2009.

None of our illustrious politicians bothered to read the TARP Bill before jamming it through. They have no one to blame but themselves and Sen. Dodd.

Although contractually and legally binding, these bonuses are immoral in nature. Come on! How greety can we be in society this society and still be appropiate??? We are talking about millions of dollars for "some" executives! This while there are hundreds of thousands jobless Americans who in cases are experiencing extreme financial hardship – which by the way, is the outcome of the actions of the same greety executives that justified the means of getting into highly risky deals by the ends of getting even richer. I bet to some of those folks one more million dollars didn't even carry a heavy weight in their accounts. But you know what people, I blame it all to every single one of us for lowering our moral standards as society, and perceiving actions like this as the norm. Perfect example, one of the news reporters from CCN challenged these executives to return the bonuses as a moral redemption, and the reaction her co-worker was of sarcasm and cynical in a very much ridiculing manner.

AT LAST! Someone has the intelligence to stop the witch-hunt over "bonuses" and realize that most of these are part of the total compensation paid to employees FOR WORK ALREADY DONE. I know I'd be really if I worked and then was told that I am not going to receive my full compensation. That's the way it works, I'm afraid. Get over it. I pay my taxes, too, but I do not think taht people should not be paid what they are due because of the state of the economy.

The Cliffs Notes version of the article: basically we're too stupid to understand the intricacies of compensation on Wall Street.

They get paid huge bonuses in down years and even more huge bonuses in good years? It's not so much a pyramid scheme as it is a confiscation scheme. But since that is apparently standard operating procedure, I guess it's okay.

We wouldn't want them losing their country club memberships.

All contracts have provisions in small print that mean they can be abrogated by unusual or special circumstances (health insurance companies have been using this feature to rake consumers over the coals for years)..gov't should use this to get the money back.

Meanwhile think about this–the amount of $$ given in AIG bonuses would run the YouthBuild program for two years for the ENTIRE country–a program that actually helps the economy, and is chronically underfunded. (See Michele Obama's visit to their 30th anniversary build on the mall, yesterday.) $1 million + $2,740/day. GIVE IT BACK!

AIG bonuses/ when are these companys going to stop this shell game of "It wasn't on my watch" and using the law to protect their greed. The American people are being held hostage with threats of collapse and the behind walls decisions to rush bonus payments before any objections can be made. BS

A question for anyone..... Would the employees that received the bonuses gotten paid WITHOUT a bailout ? What's the status of the "contracts" for bonuses if AIG didn't have the money ?

Jill Schlesinger rightly lays a portion of the blame on Board's of Directors in failing to adequately assess risks in these operations (some leveraged well above 95%).

Too often (spell AIG and Enron) the Congress has ignored the fiduciary role of the Directors to Stockholders. I'd hazard this is due to the political connections of those directors.

Since the U.S. now has something like an 80% position in AIG, we have the option of starting to clean house at AIG by 'voting in' a new set of Directors. Not rocket science!

pete jensen

The bonuses should not be given back. They were included in the contracts that were agrred upon before the "bailout". This is the fault of the administration. Their arrogance into thinking that they can now bully someone into giving back their pay is just a glimpse into what possibly lies ahead for America.

You did not get it right on this one. No matter what argument is put up, It is morally wrong and that stands. You may put the best argument in the book to support the wall street but it simply does not sink in. The women in pink summarized it all too well. They carried waved their placards and they put up a brave face to show that awarding of bonuses was in fact greed and should not have been awarded. If the argument is that they were going by their contracts then the existing contracts have been and will remain unjustified

I am outraged by this whole issue and do not take kindly to anyone defending taking my money to give to irresponsible and apparently incompetent business. Wall Street is a gambling enterprise as surely as is las Vegas. They have used other people's money to fatten their own purses for far too long. When they come crawling to my federal government for what amounts to my tax money, then they have to take restrictions, conditions, strings, and possible even humiliation. Bonuses to losers – bah!

A day late, but I do remember the segment very well. I do appreciate your follow up post and it is truly a shame that you didn't get a chance to present your thoughts on air. Mr. Mack was behaving like a typical bully, and Ms. Chetry was unable to control the interview.

I would like to know more about how credit default swaps were employed by AIG and apparently were the instruments that virtually brought the company to its knees. As I understand it, AIG still has a tremendous exposure to them.

Hopefully, we'll get a chance to see you on air in the very near future.

I think it is ridiculous to threaten these employees and their families. Yes, they should return all the bonuses! We have the right to be outraged, but should let our legal system handle the situation.

Why isn't everyone screaming about Congress and their expenditures and lame excuses for travel expenses. Those old coots should leave Congress and give the younger and smarter generation a chance to fix the mess they have us in. This whole mess is from greed, not only from these large corporations, but from corrupt and greedy politicians.

A question for anyone….. Would the employees that received the bonuses gotten paid WITHOUT a bailout ? What’s the status of the “contracts” for bonuses if AIG didn’t have the money ?

The government should not be bailing out any businesses, period. If you run a company that employs people who mismanage the companies money, you simply fail, thats it, end of story and hopefully learn a valuable lesson, We have too much government control all ready and no one is standing up and taking notice. Business are mismanaging money so lets give them more money, oh, wait, even better- lets give them other peoples money (taxes) and now we have government taking from the poor to keep the rich in the style to which they have become accustomed. After all, taxpayers cannot do anything to us, we are the government.

The most interesting thing to come out of Liddy's hearing so far was that he was only communicating with Bernanke at the Fed. That backs up Geithner's assertion that he didn't find out about these bonuses until last week. I also hope the media makes clear that Bernanke is not a part of the Obama administration. The Fed is a separate entity and Bernanke was there under Bush as well. That's an important point and may seem obvious to some of us but I'm sure many in the public are not aware of the distinction.

AS well as AIG, all political contributions should be returned as well. Not only those reieved from AIG, Senator Dodd, but also those from Fannie Mae and Freddie Mac Rep. Frank.

Something just doesn't seem right – Senator Dodd received the most campiagn contributions, he writes the amendment that allowed this. If he wants private citizens to give back money, his campaign sould as well.

Who really cares about a Wall Street exec and 30M in bonuses. Let's deal in the real world. It is a joke that anyone could attempt to justify a bonus of any amount to these people. They obviously did not do their job? Do they think they are rock stars? This is tax money we are talking about. They are NOT entitled to it. Surely you can see that the American people today are struggling to buy food for their families, pay their mortgage payments, car payments, etc...........Let's hear as much outrage about those topics. Let's hold some hearings in Washington about that. How many mortgages in middle America do you think you could save with one of those bonuses? Everyone in trouble is not a bumb. People are out of work-don't you get it?

Whether we agree or disagree with you, my position is that we should have been able to HEAR you. The other guy had no right to just keep talking over you. Not much enlightenment there.

Dave MacD
Pittsgrove, NJ

YOU see how the Media can,distort thr truth?..Obama,signed the Stimulis package with the AIG loop hole in it..The Media did not bring up the fact that Obama did not read the bill,he just signed it....Now the Media will circle the Wagons to protect their HERO. Not matter if the Bonuses were deserved or not,Obama's Administration dropped the ball.

I absolutely believe in adhering to contracts- as in the case of the AIG bonuses. However those bonuses should have been based on performance and given the dire financial straights the company is in- the executives should voluntarily decline their bonuses and reduce their compensation.

If you are skilled and talented enough to be in an executive position then you should have strong enough ethics to know right from wrong. Those bonuses have not been earned. I don't know how those individuals can live with themselves, taking tax payer money to reward themselves for failure.