AIG exec's bailing despite bonuses...

Discussion in 'Financial Cents' started by Tango3, Mar 17, 2009.


  1. Tango3

    Tango3 Aimless wanderer

    http://business.timesonline.co.uk/t...ectors/banking_and_finance/article5926545.ece
    Eleven AIG executives quit despite bonuses up to $4.6 million

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    <!-- Remove following <div> to not show photographer information -->(Chip East/Reuters)



    <!-- Remove following <div> to not show image description -->Andrew Cuomo, New York Attorney General, has lead criticism of AIG over the bonus system



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    <!-- Print Author name associated with the article --><!-- Print Author name from By Line associated with the article --> Nico Hines

    <!-- END: Module - M24 Article Headline with landscape image (d) --><!-- Article Copy module --><!-- BEGIN: Module - Main Article --><!-- Check the Article Type and display accordingly--><!-- Print Author image associated with the Author--><!-- Print the body of the article--><style type="text/css"> div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } </style><!-- Pagination --> <!--Display article with page breaks --> The stricken insurance giant AIG was hit by fresh controversy today when it was revealed that eleven executives being paid bonuses of a million dollars or more to stay have quit the company.
    Andrew Cuomo, the New York State Attorney General, revealed this afternoon that the expensive retention payments were not enough to keep the staff on the payroll.
    The news undermined the argument of government-appointed AIG boss Edward Liddy that the bonuses were necessary to retain “the best and brightest talent".
    Mr Cuomo demanded to be told who had received $165 million worth of bonuses yesterday, but AIG refused to disclose the information despite accepting a multi-billion dollar bailout package from the government.
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    <!-- END: Module - M63 - Article Related Attachements --><!-- Call Wide Article Attachment Module --><!--TEMPLATE:call file="wideArticleAttachment.jsp" /--> In a letter to Barney Frank, chairman of the finance committee in the US House of Representatives, he wrote: “Eleven of the individuals who received ’retention’ bonuses of one million dollars or more are no longer working at AIG, including one who received 4.6 million dollars.”
    Mr Cuomo vowed to subpoena the insurer to force it to divulge the names, job descriptions and performance of the workers involved. He plans to investigate whether the bonus payments breached state law. The payments may be illegal if they were promised at a time when AIG knew that it did not have the cash to meet its commitments.
    In the letter to Congress, Mr Cuomo also revealed that the ten AIG employees who received the largest bonuses were paid a total of $42 million dollars.
    “These payments were all made to individuals . . . whose performance led to crushing losses and the near failure of AIG,” he wrote.
    A total of 73 employees received a million dollars or more, Mr Cuomo said. “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 a taxpayer bailout. Something is deeply wrong with this outcome,” he said.

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    We have bankruptcy laws that would have applied (employees with bonusses would have lined up with other creditors - and probably got nothing. Seems we need some bailout laws to be written. A nice touch would be the board of directors would be personally financially repsonsible for any bonusses.
    Dave, Victoria,



     
  2. Tracy

    Tracy Insatiably Curious Moderator Founding Member

    If AIG refused to pay the bonuses, and the employees tried to enforce their contracts, wouldn't their names become part of public record under the lawsuit?


    I'm trying to read the package (but it's horribly long). It looks to me as if the bonuses have been covered and do not have to be returned to the taxpayer (but I'm no legal beagle... just a curious cat ;) ).

    ‘‘SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.(3)‘‘(D)(IV)‘‘(iii) The prohibition required under clause (i) shall not be construed to prohibit any bonus payment required to be paid pursuant to a written employment contract executed on or before February 11, 2009, as such valid employment contracts are determined by the Secretary or the designee of the Secretary.
     
  3. ghrit

    ghrit Ambulatory anachronism Administrator Founding Member

    What irks me most of all is that the rats waited until the bonus checks cleared and then bailed. There is no descriptive term to cover that.
     
  4. Clyde

    Clyde Jet Set Tourer Administrator Founding Member

    I would have done the same thing. Get the cash and jump from the sinking ship. Ever wonder what they know that we don't? Don't most people who are going to leave a company leave after bonus time if it is voluntary? That is how the real world works.

    Obama and Co all knew this was going to happen, and all the whiners out there voted for these guys to get their compensation that was part of Tarp 2...and a final amendment by Chris Dodd allowed all previous agreements to be legal.

    They all knew this was coming and the architect was Geitner.


    Why are we pissed off over 150 million dollars when the real crime is the bailouts in the first place. If all the people quit AIG tomorrow, then AIG doesn't exist and the US Taxpayer is screwed even more than they are already.
     
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