Cuomo Reveals AIG Details: 73 Employees Got Multi-Million-Dollar BonusesMarch 17, 2009 01:22 PM
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AIG's assertion that it had no choice but to make multi-million dollar bonus payments was undercut this afternoon by New York Attorney General Andrew Cuomo, who revealed new details about the now-infamous pay packages.
Cuomo reveals that 73 individuals received bonuses of $1 million or more, with one recipient getting a bonus of more than $6.4 million.
In particular, Cuomo takes aim at AIG's rationale for distributing more than $160 million in retention payments to members of its Financial Products subsidiary, "the unit of AIG that was principally responsible for the firm's meltdown," according to a letter sent by Cuomo to Barney Frank, chairman of the House Committee on Financial Services.
Though AIG has stressed that payments were essential to retain individuals at Financial Products vital to unwinding the subsidiary business, Cuomo notes that "numerous individuals who received large 'retention' bonuses are no longer at the firm."Cuomo's office also learned more details about the bonuses:
• The top recipient received more than $6.4 million;
• The top seven bonus recipients received more than $4 million each;
• The top ten bonus recipients received a combined $42 million;
• 22 individuals received bonuses of $2 million or more, and combined they
received more than $72 million;
• 73 individuals received bonuses of $1 million or more; and
• Eleven of the individuals who received "retention" bonuses of $1 million
or more are no longer working at AIG, including one who received $4.6
million;
Again, these payments were all made to individuals in the subsidiary whose performance
led to crushing losses and the near failure of AIG. Thus, last week, AIG made more than 73
millionaires in the unit which lost so much money that it brought the firm to its knees, forcing taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will
address it head on.
We have also now obtained the contracts under which AIG decided to make these
payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.
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Link (with letter included):
http://www.huffingtonpost.com/2009/03/17/cuomo-reveals-details-of_n_175865.html:banghead:
:wtf:
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