Cuomo Reveals AIG Details: 73 Employees Got Multi-Million-Dollar Bonuses

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.

According to Bloomberg News, AIG has "also budgeted $57 million in "retention" pay for employees who will be dismissed, according to a March 2 filing to the Securities and Exchange Commission."

AIG planned to award about 4,600 of its managers and employees a total of about $1 billion, Bloomberg News reported in January, citing two people familiar with the situation. In addition to $450 million for employees in the financial products unit that sold credit-default swaps, AIG was to give about $470 million to staff of three other subsidiaries and $148 million to top executives, according to the people and company filings.

Of the $450 million for the financial products unit, the $165 million in retention pay was for 2008 and due to be paid by March 15, $55 million was paid in December and an additional $230 million was originally earmarked for 2009 retention payments. Liddy has said he wants to reduce the 2009 payments by at least 30 percent.

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.

READ THE LETTER:

House Committee Letter 3.17.09 - Free Legal Forms

Comments

[mcostello]

This is the tip of the iceberg folks.

What federal budget of the last 30 years was not a economic bailout?

If you want to see a large American company CEO cry real tears, tell him he can't have anymore contract work for the federal government. All of these SOBs are feeding at the federal trogh.

[bccmeteorites]

Just out of curiosity. Does anybody know how many bailed out wall street employees lost their primary residence through foreclosure during this fake economy? And is there a breakdown by racial makeup? How many white and non-white employees versus foreclosure counts if any?

[rudya]

When the government says that it cannot do anything about these bonuses because of "the sanctity of the contract", remember that they forced GM to alter its contract with the unions.

You can;t have it both ways. It's OK for the rich to have their contracts honored, but not for the working class? Since they were broken for the unions, they can also be broken for these "financial geniuses" that put all of into this mess. The US government has broken its contracts with US citizens before.

The Social Security contract was broken when the government started to tax 85% of the benefits. It was also broken the government started rigging the inflation measure in order to beat retirees out of their cost-of-living adjustments.

[rudya]

It is time for the people to take this AIG situation into our own hands.

If you had a neighbor that offended you, would you shop in his hardware store? Then why would you patronize AIG when they are stealing from you and enriching themselves?

Do not do business with AIG or any company that receives bailouts. CANCEL YOUR AIG INSURANCE POLICIES! Sign up with a responsible company. Also, please be aware that AIG knows that its brand is tarnished and has renamed part of its insurance as 21st Century Insurance. they have been advertising heavily in this area (probably using our TARP funds). So not use 21st Century as your insurer.

Take your money out of B of A and CitiBank and place it into a regional or community bank that was responsible and has been helping your community.

Once the government realizes that the PEOPLE will be drowning these greedy companies, and that there is no way that they can survive, they will realize that throwing bailout money at them will not work.

It is time to take back our nation!

[Millie Lencioni]

Cuomu has the tenacity of a bulldog, and its a very refreshing change. He is going full speed ahead, and is not going to stop, until money is returned or people are in jail. When was the last time an attorney general took his job so seriously? Too long!

[Flashfolds]

Cuomo looks like a Soprano thug. I guess the job suits him. Violating people's civil rights doesn't seem to bother you libs very much as long as it's one of your guys doing it.

[lunchlady]

I think its time to find some young hungry talent and replace all these spoiled entitled jerks. They all seem to think they deserve multimillions, even when their companies are shot to hell. Where's the long term planning for survival and profitability?

[Subol Shrestha]

Mr. Cumo has really done a great job seeking the details of this bonuses. The facts that have come out of his study are really interesting . Some of the people who have already quit the job are also receiving the bonuses. Moreover, AIG is delivering this bonus amounts to those people who are the main culprit for the current AIG's crisis. And the people who are receiving these bonuses are accepting with open arms.

[gevan]

We should perhaps be looking towards contracts that insist that that something we buy, like stocks or real estate, will retain 100% of value in future years. That would help.

[RationalDubSteppa]

We Want Names!!!!!!!!

[stagebandman]

WE
WANT
NAMES!!!!

[Jo Manning]

Cuomo might have made an excellent Secretary of the Treasury.

[MoMoDo]

You think that's not the job he's bucking for?

[gevan]

No. Governor fo NY, like the Roosevelts.

[AN2009]

Cuomo would do a much better job than Geithner could!

[Wiseup2Day]

I believe when politicians can go in and request someones information that legally is between the employer/employee/IRS it becomes unconstitutional...what is happening to our rights of privacy? Where is the ACLU? Just because we may not like that they got it..guess what it's too late and boils down to the sloppy legislative work of this Congress. Regardless..this is unconstitutional and politicians have no right to do this to anyone.

[Athleticsfan]

You are talking about public tax payer money being paid out here. Tax payers have a right to know where their cash is going. You're argument has no merit because you dont include the circumstances/context of the subject.

[dlvme2]

I think things change as far as rights when you are begging for a taking money from taxpayers. If is horrible that this was done and that the people accepted it. YES I would love bonus like that, but if I was aware of where it came from and how it was hurting an entire nation I would refuse it - what is wrong with people. We have become such a me - me - me society that it is sad.

[pghperson]

I think since this firm was bailed out by the taxpayers, it would seem appropriate if these people started considering the faceless taxpayers more like their board of directors. A board of directors who holds them accountable for the cash they were given.

[gatogato]

Am I the only one who thinks Cuomo looks like the guy who played the one armed man in the movie "The Fugitve"?

[tokenconservative]

Cuomo needs to stop grandstanding and either do something or sit down. We don't need you to rear your ugly political face any higher Andrew.