NY AG demanded that AIG reveal the names of its employees who were awarded those "contractually-binding" bonuses. The Times Online reports the insurance giants' response:
AIG refused to hand over to the New York Attorney General the identities of workers who received $165 million (£117 million) in bonuses, despite stinging criticism from President Barack Obama over the payments.
Andrew Cuomo, New York’s Attorney General, who had demanded the information by 4pm yesterday, 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.
Seven London executives at AIG Financial Products (AIGFP) – the division responsible for the near collapse of the insurer – are known to have been granted at least $3 million each. These bonuses may yet be vetoed.
AIG outraged America at the weekend by pushing ahead with the $165 million bonus payout, made out of a $450 million pool set aside for 400 staff at the AIGFP division.
That's ballsy, but Rep. Barney Frank -- the chair of the House Financial Services Committee, btw -- broke it down for AIG yesterday on Rachel Maddow's MSNBC show: AIG is not some private company. We own AIG.
Visit msnbc.com for Breaking News, World News, and News about the Economy
Frank, at 6:50:
We own 80% of the company. We are told that, as the federal government which advanced them the money -- which the Federal Reserve did on its own authority last fall -- we cannot order the two parties, the company and the employee, to break the contract because the Federal Reserve didn't say that at the outset. But, I think we have more power, if we don't act as the federal government -- which leant them money -- talking to two different parties, but we assert our ownership rights. We own the company. We are the majority owners. I think the federal government should now step in as the owner and say to these employees, our employees, "Bonus, my foot! You messed up this company, and whatever your contract said, it can't be interpreted to mean that we're gonna reward you for losing money."
Posts
1 Lonely Comment:
how do you spell ridiculous? a- i -g.
aren't bonuses generally tied to performance? if my memory serves me correctly aig's performance wasless than stellar in 2008. for those who may have forgotten aig's performance was so poor that it lost its aaa credit rating causing 30 public transit agencies around the u.s. to slide to the verge of defaulting on loans that aig backed,including the washington metropolitan area transit authority (wmata) (see http://moran.house.gov/list/press/va08_moran/MetroCrisis.shtml).
as of 2 march standard and poor's rating services “We believe AIG is particularly susceptible to these broader market trends given its somewhat weakened position”. in other words, the organization's performance was still not up to snuff to justify the bonus checks that were mailed out lates last week.
Post a Comment
Two cents only, please...