AIG Pulls Fast One -- "Cash Awards" Going To Managers

When you are a pro at a scam--the definition of "scam" also can be found under the term "insurance industry" -- you know how to try to pull a fast one. And AIG is trying to pull one -- under cover of the holidays. Check this out.

You may remember that AIG -- which is afloat only thanks to a bailout by you, the taxpayer, to the tune of $152 billion and counting--made a whole lot of public relations when its top seven executives agreed not to take bonuses this year.

Well, on the eve of Thanksgiving, obviously knowing the markets would be closed on the holiday and obviously knowing that just before the holiday few people would pay attention, AIG actually notified regulators that, well, yes, bonuses would be given out, as Bloomberg News and The Financial Times reports today:

American International Group Inc., the insurer that said yesterday it scrapped bonuses for top executives after a U.S. bailout, will still pay 130 managers "cash awards" to stay with the firm, including $3 million to retirement services chief Jay Wintrob.

Wintrob, 51, will get the "retention" payment in two installments, the first in April 2009 and the rest a year later, New York-based AIG said today in a regulatory filing. The firm previously disclosed the program in a Sept. 26 filing and said today that Wintrob and Chief Financial Officer David Herzog elected to get the payments four months later than planned.

"The expectation from the public and Congress was that they weren't getting bonuses, not that they'd be pushed off by several months," said David Schmidt, a consultant at executive pay firm James F. Reda & Associates. "That clearly violates the spirit of AIG saying they'll forgo their bonuses."[emphasis added]

From the FT:

However, the UBS news comes just a day after it emerged AIG, which has received more than $150bn in bail-out financing from the US government, would still pay 130 managers "cash awards" to stay with the firm. AIG disclosed the bonuses in a regulatory filing on the evening before Thanksgiving, a day when US markets are closed. The insurer had previously said its seven top executives would forgo their bonuses for 2008.

They just can't help themselves, can they? Call it "retention pay" or "cash bonuses" or some other euphemism -- but the fact is that your tax dollars are going to reward people who are lucky to even have jobs. There should have been a housecleaning that swept the entire top level of managers out on their asses for playing a role in the financial crisis that is hurting millions of people.

I have not seen this reported in other mainline traditional media. But, this is a scam.

Comments

[fedupwiththis]

They are giving these clowns our money so they will not leave. Where are they going to go? They drove one of the largest insurance carriers in the world to the brink of bankruptcy and are rewarded for it. I say fire them just as they would fire an incompetent file clerk. This is insane. More welfare for the rich.

[OtayPanky]

fedupwiththis: They are giving these clowns our money so they will not leave. Where are they going to go?

===

You make a great point.

[hippynanainblingland]

In the meanwhile, in the news today, a Washington State homeless shelter will have to close its doors, at the beginning of winter, because it cannot procure $50,000,000 it needs to keep its doors open for another year. Go figure.

Oh, and I almost forgot, the building they're housed in is being foreclosed.

Bring these bums to the Northwest, and make them experience living homeless in Seattle this winter, I say!

[hippynanainblingland]

In the meanwhile, in the news today, a Washington State homeless shelter will have to close its doors, at the beginning of winter, because it cannot procure $50,000,000 it needs to keep its doors open for another year. Go figure.

[hippynanainblingland]

I apologize to the readers of this thread for the triple posting. It took forever to appear, and I kept on insisting it be posted. Sorry.

[katinpuyallup]

I think the managers have done exactly what they were supposed to do. The world's money is being concentrated into fewer and fewer megacorporations. America is being brought to her knees. The middle class is disappering. When America goes, most of the world will go with her.

These people seem to be loyal to their corporate flags not the American flag. I think their loyalty, in the long run, is to their investors not America. Who holds the major portion of stock in these companies? It's not the little guy, its the managers, the members of the boards of directors, some billionairs who we all know.

The small investors, the day traders were just scoopped up for the ride. Now they've been dropped by the wayside, their money in someone elses pocket.

I don't know if the Democrats are waiting for Bush and his buddies to leave office, before they act, or if they"re scared to stand up to the financials, or are just complacent. But, somebody had better grow some Kahunas fast and take back America.

[hippynanainblingland]

In the meanwhile, in the news today, a Washington State homeless shelter will have to close its doors, at the beginning of winter, because it cannot procure $50,000,000 it needs to keep its doors open for another year. Go figure.

Oh, and I almost forgot, the building they're housed in is being foreclosed.

Bring these bums to the Northwest, and make them experience living homeless in Seattle this winter, I say!

[wmholt]

Do you really mean 50 million?

[MagisterLudi]

Every bonus paid should result in 100 fold reduction in bail out money.
$3,000,000 bonus to Jay Wintrob ? OK, $300,000,000 deduction from the bail out payment. This will fix the problem double-plus quick.

[sonoffestus]

They don't really care as long as they're getting their cash.

[who38]

Good idea.

[BlueGirlRedState]

Perhaps the managers are being given retention bonuses because the top dogs need scapegoats after Jan. 20th. The delay sounds like a scheme to keep it from showing up on tax returns until 2010 when, they hope, we will have gone back to sleep.

[who38]

Or the company will have gone under.

[tomas0808]

No one will do anything. They are corporations and corporations run this country. This is why the MSM won't report this. They could call it 'The Fund for Indian Terror Victims' and no one would do anything when they gave it to one exec to 'oversee' and he pocketed it and put it in his offshore account.

[LeBeau59741]

I'd be willing to see each of these ...er...uh­m... individuals given $60, a Timex watch and a swift kick as a severence package, but "retention"?!
Why on Earth should these people keep their jobs at all, let alone be rewarded for staying on the ship they sank?

[mountainweb]

AIG needs to return the money asap, rewarding people for failure and outright stupidity is not right, not good business, not what the program was designed to accomplish and maybe some of the business schools need to start teaching that in their MBA programs.

[tomas0808]

They need to start teaching business and not 'How to Thieve and Scam.'

[gorgol]

I fear a NATIONAL FINANCIAL COLLAPSE before OBAMA can take over...wit­h Bush dancing his girly dance in the wings...ju­st "giddy" about causing more destructio­n...

[Sseb]

Retention bonuses? First, what company is hiring? Second, what company would hire these knuckleheads? Let 'em go. Don't pay them a red cent of taxpayer money. Maybe we should send that crowd from the Walmart in Nassau County over to AIG's offices.

[who38]

Good point about the hiring. This group of BFs (business failures) probably can't flip a burger.

[boughtout]

Heard a financial analys propose that every failing company, regardless of whether they are being "bailed out" or not, should replace it's management by the percentage of loss by it's company...­how can the same crooks and fools expect to "fix" the problem they created?

1 Timothy 6:10
"For the love of money is the root of all evil."

[who38]

Hear, hear. You know that the people on board at present are only those who couldn't find work at other corporations during the past two years. The talent at that company fled long ago. Wonder if there is a way to find out how many top executives left AIG in the past five years.

[psch]

Seems like it is time for a petition to stop any further bailouts with our tax dollars for companies who think they can bend the rules. No bonuses, means no bonuses in any way, shape or form!! It does not matter how you twist the lingo. What do theese big companies not get? Do they really think these people are so valuable? No way, they are not. They are just as easily replaceable as the rest of us.

[SWAMPCAT]

Psch, I would sign it. I would sign it twice, if necessary.

[girlwild]

No bonuses for managers who have managed to reduce a company's circumstances so that they need a bailout. Where are the controls on this money?

If the taxpayers are going to have suck it up to get themselves back on track, so must these companies on the public teat.

[Kalamama]

There should be very severe penalties on this. They need to return the money they took because they don't pay claims out to the very peope who are funding this bailout!
That's correct folks! Google their payout history for accidental death claims and I am sure you will be as sick to your stomache as I am. A friend of mine has been denied her claim to her husbands accidental death for almost 2 years now because AIG makes up the rules as they go. Their reason for denying a 47 year old widow her claim when she lost her husband is because statistics!!! Did not matter to them that the coroner ruled his death accidental. They needed that monet for another retreat I suppose, though her claim doesn't add up anywhere near the amount of ONE of their EMPLOYEES bonus or retreats. I urge anyone who carries AIG accidental death insurance to cancel now because of you ever need it, it will not be paid out. Boycot this company and the scum who run it. and SHAME ON PAULSON!!!!! Wonder if he got a cut of the pie???

[Kalamama]

Oops!! Sorry about the bad spelling in above post. When I am that angry and disgusted, I guess my fingers don't hit the right keys.

[who38]

You know he did or a relative or close friend got some kind of job or perk.