Cuomo: 73 AIG staffers got bonuses of $1 million or more
Bailed-out insurance giant American International Group gave retention bonuses of $1 million or more to 73 employees in the latest round of payments, New York Atty. Gen. Andrew Cuomo said today.
And 11 of the people who received million-dollar bonuses no longer work for the company -- even though the payments were specifically aimed at retaining them, Cuomo said.
The new bombshells about AIG’s bonuses are in a letter Cuomo sent to House Financial Services Committee Chairman Barney Frank (D-Mass.).
"These payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near-failure of AIG," Cuomo said in the letter. "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."
AIG, now 80%-owned by the government after a series of bailouts that began last September, nonetheless paid out more than $160 million in retention bonuses beginning late last week -- despite congressional and White House protests. The company said its hands were tied because the payments had been guaranteed in employment contracts predating the bailout.
Cuomo, who has subpoenaed AIG to provide names of all bonus recipients, said he had obtained copies of the contracts.
"The contracts shockingly contain a provision that required most individuals’ bonuses to be 100% of their 2007 bonuses," Cuomo told Frank. "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."
-- Tom Petruno