350zCommtech's Account Talk

Sort by newest Sort by date
In the last three days, markets have sold off prior to the bad news. After the bad news, buyers( or PPT) steps in. Will this happen tomorrow?

Bulls need a close above 863. Is the Jobs number priced in?
 
Do you want to bailout the automakers?

AIG May Double Some Salaries With Retention Payments (Update1)

By Hugh Son

Dec. 4 (Bloomberg) -- American International Group Inc., whose bonuses and perks drew fire from lawmakers after the insurer accepted a federal bailout, will make special retention payments that more than double the salaries of some senior managers, according to a person familiar with the matter.

Some executives in the group of 130 recipients will get more than $500,000 to stay through 2009, about 200 percent of their salaries, said the person, who declined to be named because the information hasn’t been publicly disclosed. An undetermined number of lower-paid employees will also get cash awards to dissuade them from quitting, the person said.

“It seems like more than what you’d need to pay to get people to stick around,” said David Schmidt, a senior consultant at executive pay firm James F. Reda & Associates. “Nobody’s hiring, so where are you going to go?”

Chief Executive Officer Edward Liddy is encouraging top employees at AIG subsidiaries to remain so the units retain their value while he finds buyers. The New York-based company is selling businesses, including its U.S. life insurance and retirement services operations, to repay loans included in a $152.5 billion government rescue of AIG, which produced a record $37.6 billion loss so far this year.

Best Interest

“We have to hold on to the talented people running our businesses,” said AIG spokesman Nicholas Ashooh, adding that many managers have lost much of their life savings. The executives “have deep business relationships that are not easily duplicated,” he said in an e-mail. “Our competitors have been trying to hire them for years.”
Ashooh said retaining the managers and keeping the units healthy “is in the best interest of both AIG and U.S. taxpayers.”

AIG disclosed the cash-award plan in a September filing without saying how much most of the recipients would get. The majority of the managers will get the first of two installments at the end of this month, said the person.
The awards may equal 100 percent to 300 percent of an executive’s annual salary, and as much as 100 percent for the next round of payments for lower-paid employees, the person said. The retention payments are several times larger than year- end bonuses, which most of the 130 executives will still get in March, the person said.

AIG said in the filing that the 130 payments included $3 million for retirement services chief Jay Wintrob. His award, almost 400 percent of his 2007 salary of $775,000, was the only one disclosed by AIG. While most recipients will get 60 percent of the money this month and the rest in December 2009, AIG said, Wintrob elected to get his first payment in April.

Bonus Payments

Lawmakers have criticized the retention pay, saying that AIG misled the public and that it’s unnecessary to give so much cash to retain employees when job demand is weak. Finance companies in the U.S. have announced 220,506 job cuts this year through November, employee placement firm Challenger Grey & Christmas Inc. said in a Dec. 3 report.

Liddy, 62, said on Nov. 25 that AIG will freeze salaries and forgo 2008 bonuses for seven top leaders, and his own pay was set at $1 through 2009. The next day, the insurer disclosed that Wintrob will still get the $3 million payout.
AIG also said the next 50 highest-ranked employees wouldn’t get raises through next year, and that it would ensure that bonuses and cash performance awards to the top 60 members of management didn’t come out of taxpayer funds. Their 2008 and 2009 bonuses would be “limited,” AIG said in its statement, without specifying the curbs. AIG said its curbs were stricter than federal rules for companies that accepted Treasury cash.

Congressional Demand

Financial firms that took money from the U.S. Treasury’s $700 billion rescue fund are under pressure to curb executive pay and perks. AIG followed Goldman Sachs Group Inc. in limiting compensation last month after getting commitments of capital from the U.S. AIG’s self-imposed pay curbs don’t forbid retention pay, which is different than bonuses, Ashooh has said. AIG had 116,000 employees at the end of 2007, according to Bloomberg data.

Representative Elijah Cummings, a Maryland Democrat who has called for Liddy’s resignation, said this week that AIG should provide names of those getting retention pay and explain why the awards are needed. Firms accepting taxpayer money shouldn’t enrich employees, he said.

AIG got an expanded government rescue package last month after being overwhelmed by bad bets on U.S. housing that caused four straight quarterly losses of about $43 billion. The insurer sold credit-default swaps, the contracts protecting against losses on mortgage bonds, that plunged in value as the assets they guaranteed declined.
To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net
Last Updated: December 4, 2008 13:23 EST
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqyRUyX83Uqg&refer=home
Click to expand...
 
350zCommTech said:
Sell-off into the close today ahead of tomorrow's jobs number?
Click to expand...

If it has a 2 in front of it instead of a 3...there will be a good rally.

November might not be that bad...because maybe people are keeping workers around through the holidays...THEN they will give them all the boot come Jan.
 
Corepuncher said:
If it has a 2 in front of it instead of a 3...there will be a good rally.

November might not be that bad...because maybe people are keeping workers around through the holidays...THEN they will give them all the boot come Jan.
Click to expand...

I agree with that, but that short covering in the last 30 mins was not good for the bulls.
 
big_grin.gif Rick is right!!! I love that, tell it like it is!! He should get a raise, but I don't think his Bosses are going to see it that way?:cool:
 
Half a million jobs lost plus huge revisions once again.

But, as expected, futures are rallying(on lower volume) after the worst jobs number in 34 years.

Have we seen the worst? Will future month's numbers be less bad?
Bond yields are up today, they think we might have seen the worst.

After Christmas, there will be a lot of store closings and common sense tells me that we're going to see more job loses and higher unemployment come Jan/Feb.
 
Last edited:
350zCommTech said:
Half a million jobs lost plus huge revisions once again.

But, as expected, futures are rallying(on lower volume) after the worst jobs number in 34 years.

Have we seen the worst? Will future month's numbers be less bad?
Bond yields are up today, they think we might have seen the worst.

After Christmas, there will a lot of store closings and common sense tells me that we're going to see more job loses and higher unemployment come Jan/Feb.
Click to expand...
New World Order

I'm on Peanut Butter and Jelly now for lunch.....I'm saving my pennies for the buys in April....I think once people get to claim all their losses on everything this year, they'll actually get a check back.

I'm on par to get my 100 Fed/1000 State check...woohoo 1100 dollars to invest come next year!

We haven't seen the worst, emotion after today will be frenzied!
 
350Z,
Do you see this as a chance to get in for a Mon/Tues short term rally?
I'm seriously thinking about jumping in for a day or two next week, then bail again.
Thanks for your insight....

Bryan
 
ExtremeWX said:
350Z,
Do you see this as a chance to get in for a Mon/Tues short term rally?
I'm seriously thinking about jumping in for a day or two next week, then bail again.
Thanks for your insight....

Bryan
Click to expand...

You're welcome Bryan.

Yes, I do. Bond yields and the VIX, at the moment, suggests to me that we could see a reversal come Monday. Although, if there is a bounce, it might only last half a day or 1 day. With our trading restriction, I'm not going to waste my IFT for a 1 day trade and get stuck in the G fund for the rest of the month.

Despite my current hatred for Barclay and I fund, the best choice for Monday is the I fund. Europe is already down 3-5%. I see more selling at the end of the day causing a -FV.

Good luck with you decision.
 
You must log in or register to reply here.

Similar threads

tsptalk
December 2024 AutoTracker Winners!
Replies
1
Views
237
nasa1974
nasa1974
tsptalk
November 2024 AutoTracker Winners!
Replies
3
Views
522
tsptalk
tsptalk
tsptalk
October 2024 AutoTracker Winners!
Replies
5
Views
290
nasa1974
nasa1974
tsptalk
2024 Final AutoTracker Winners!
Replies
1
Views
163
nasa1974
nasa1974
TommyIV
  • Article Article
TSP Talk Weekly Wrap Up - Opportunistic Investors
Replies
0
Views
96
TommyIV
TommyIV
Back
Top