AIG Suspending Millions in Executive Payouts
It’s about time! American International Group has agreed to suspend payments to executives from a $600 million bonus fund as well as $19 million in payments to its former chief executive, this according to New York’s attorney general Andrew Cuomo.
From the New York Times:
The moves are the latest steps in an effort by the attorney general, Andrew M. Cuomo, to prevent bonuses and other compensation to former executives at A.I.G., which in recent weeks has received tens of billions of dollars in loans from the Federal Reserve. “There should not even be any contemplation of bonuses for executive performance because I find it hard to conceive of a situation that you could justify a performance bonus for management that virtually bankrupted the company,” Mr. Cuomo said on a conference call with reporters on Wednesday afternoon.
According to a letter Mr. Cuomo sent to A.I.G.’s current chief executive, Edward M. Liddy, the company has agreed to freeze $19 million in remaining payments to Martin J. Sullivan, the company’s former chief executive who was ousted in June. Mr. Cuomo said he did not know how much Mr. Sullivan might have already been paid under his employment contract.
The company also agreed not to make any payments from a $600 million deferred compensation and bonus fund for executives of A.I.G.’s financial products unit, which undertook many of the complex financial transactions that pushed the company to the brink of collapse. Mr. Cuomo said that Joseph Cassano, who headed that unit, stood to receive $70 million from the fund.
“We have received the letter and the letter is consistent with our discussions with the attorney general and with actions we have taken,” said Joe Norton, a spokesman for A.I.G.
Mr. Cuomo has already called on A.I.G. to assist in efforts to recover payments already made to executives at the company. On the call with reporters, Mr. Cuomo suggested that his actions offered a template for dealing with executive compensation at companies now receiving taxpayer money through the bailout approved by Congress this month.
Tags: AIG, AIG Bailout, AIG Bonus, AIG Compensation, AIG Executive, AIG Payment, American International Group, Andrew Cuomo, Andrew M. Cuomo, Attorney General, Bailout, Credit Crisis, Credit Crunch, Dow Jones, Economy, Edward Liddy, Executive Pay, Federal Reserve, Insurance, Joe Norton, Joseph Cassano, Martin Sullivan, Stock Market, Wall Street
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October 23, 2008 at 7:06 am
Finally, a step in the right direction! I was an employee at AIG for three years, and am not surprised by any of this. Unethical, group of cheaters. They went out of their way to make the bulk of employees feel low on the pole, and very underpaid. While the big wigs lined their pockets – it was disgusting! 3 years of my life that I am glad is over. All that’s left is a 401k plan that worth nothing
November 13, 2008 at 1:58 pm
The key word here is suspend, not eliminate. These guys are crooks. They should have to return every penny of their compensation for the past five years and then face jail time. AIG and the geniuses on Wall Street knew what they were doing, selling unbacked insurance. They make it sound as if the real-estate market doesn’t have regular cycles and such defaults on questionable loans weren’t a certainty. This whole collapse lays right at their feet and for them to receive anything or be allowed to keep the outrageous sums they have received is unconscionable. They should have all their property seized, that alone would amount to a few billion.
In addition, I don’t believe there is a person on planet earth that should be paid in excess of a million dollars a year even when they are doing their job, and those that do receive a million should be a rarity.
January 28, 2009 at 10:06 pm
I agree these individuals should not be receiving bonus…i would call them unethical at the very least…
I dont think jail time would be fair unless they did something that was against the law…which I dont think they did. Having no conscience is not criminal…
How many people in the US bought too big of a house? A 4 bedroom house when they only have 1 kid? A house that alone cost $1000 a month to heat and cool? Lots. Greed. These individuals in charge of the banks had greed on a much larger scale…in which their decisions effect those around them.
Congress itself is also to blame for the current economic crisis that we are in. They could have easily prevented these loans from being made and sold by the banks…but they didnt have the foresight either. They were still arguing until recently about steriods in baseball!
Having this large, expensive war that we are paying out the nose for doesnt help either! Lowering taxes while raising spending isnt very prudent.
In many ways Congress is to blame then anyone.
January 29, 2009 at 1:24 pm
This should be the final straw. No more bailouts. No more airplanes, No more bonuses. Just say no. Call your legislator and say no. No more. We, the tax payers are done with being played as fools. The executives with these companies have no sense of reality. The unemployed Americans who are paying for these bonuses and airplanes should rally and picket the offices and homes of these CEO’s and executives let them hear from main street America. Let them feel the pressure that 99% of America is feeling (in large part due to the mistakes made by these executives and CEO’s). In conclusion, we, the American tax payer needs to tell our legislators we will not support this and demand our money back from these companies. We also need to let these companies know that they now work for us. We became their stockholders when they took our money to bail them out. We need to stand up and be heard.
March 15, 2009 at 6:55 am
Press Release for release by AIG on Monday morning:
Thank you, America, for your generous donation to our non-profit organization. We do not know what we would do without you.
As you fill out your income tax forms, please think of us, and all the good your taxes do for us.
See you next month when we’re back for another generous donation.
Love and appreciation,
Your friends at AIG
March 16, 2009 at 12:46 pm
Shame on them !!! They SHOULD NOT get any type of bonus… And the government should make sure of that. You get a bonus when you do something right… not when you F*** Up all the way…
March 16, 2009 at 7:25 pm
aig these crooks have a contract to churn and turn
for commission bonus thats what they did
there more they did this equaled bonus
lose or make money what a deal
if they have to get these bonus legally
then after that fire them all
next no jobs for any of these guys that the govt
does business with , next aduit there taxes
going back five years ,
no loans from any of banks we supported
no govt business for any company that hires them
what comes around goes around
they will run out of this money quickly
since there hi rollers
and of course investigate there actions in aig
to see if thats what they did churn and turn
just to get commissions