AIG Retention Bonus
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foot,
Are you saying you would support a ban on retention bonuses for all companies?I fail to see any benefit to shareholders or clients if we pay brokers to move seats (recruiting) or remain in their seats (retention to avoid them leaving).
I hope the industry changes its practice before they are forced to.[quote=footsoldier]
I fail to see any benefit to shareholders or clients if we pay brokers to move seats (recruiting) or remain in their seats (retention to avoid them leaving).
I hope the industry changes its practice before they are forced to.[/quote] They should also pass a law banning free agency in professional sports. How about all the professional athletes that received sponsorships in one way or another from the auto industry or the financial industry, they should be taxed. Let's limit Hollywood pay to no more then 500k per year, the poor in this country shouldn't have to pay such outrageous prices for movies/concerts. What this country needs is price controls. How about an excise tax on any politicians with household incomes over 250k? They have failed, make them pay. This world is full of idiots, don't be one.Well Said MNBond…As advisors (independent or wirehouse) we have built a real business of client assets and recurring revenue streams…actual profits. The retention awards are
recognition of that profitable business model. We can view it as an upfront payment of increased grid(instead of a 40% payout, it's getting 65% for the next 7 years). They are only increasing our share of the profits we actually produce for the firm. Isn't this the reason why guys go independent to keep more of what you earn. I've earned alot of money for my firm over 15 years...even last year. Whatever your position, we've all made deals or agreements that with the power of hindsight we would change but with honor we stand by our commitments and learn from it. Don't we want our Goverment held to the same standard. This is setting a bad precedent, our Govt decides when the law applies based on popularity....the Dems are drunk with power.All those points are completely valid. But at the precise second your firm takes $25 billion of taxpayer money to survive, all bets are off. As soon as you climb into bed with the Federal government and the United States Congress, don’t be surprised if you catch something awful.
The hypocritical Dems are changing the deal after the fact. Had they come up with all these conditions, Jamie Dimond, Stumpf and Lewis would have told the Gov to F$ck off. They were encouraged to buy Bear/WB/Countrywide/Wamu, and now your going to tax their key employees bonuses (250k is not a lot of money) by 90%? Good luck unwinding AIG in a manner that doesn't result in huge losses for the taxpayer if all their key employees leave. There was a system wide failure in the financial markets, you cannot hang this on a few employees. The unintended consequences of this are going to be huge. The value in our industry is the people, their knowledge and relationships, without them, you got empty offices and used computer equipment. Like it or not, if the wirehouses can't pay to recruit and retain (brokers, bankers and traders), the regionals will take even more of their best people, that is a fact.All those points are completely valid. But at the precise second your firm takes $25 billion of taxpayer money to survive, all bets are off. As soon as you climb into bed with the Federal government and the United States Congress, don’t be surprised if you catch something awful.
The idea of putting a confiscatory after the fact tax on these employees is dangerous (and wrong) on so many levels.
Again–that’s all very compelling. I’ve never voted for a Democrat in my life, with only one exception. These bailouts were a bad idea from day one; the idea that the taxpayer should come in and keep a crummy enterprise afloat is so ludicrous, so antithetical to free-market principles, that everyone involved is virtually certain to lose money.
No rational person believes that AIG will ever be able to repay the money given them. Ditto for a handful of the others. So don’t be surprised when members of Congress are now trying to distance themselves from this carnage to the greatest extent possible. And if you can work at a firm that actually makes money–whether it be a regional or a boutique firm–do so. That’s the lesson. Had this bunch been around nine years ago, we would be scrambling around trying to figure out how to keep Global Crossing, Pet-Viagra-dot-com, and Enron from defaulting on their bailout loans to the government. Dumb. Now politics have taken over, and there’s only one direction from here: down.