Million Bonus Dollars

Pressure from New York Attorney General Results in Agreement

Under intense pressure from New York Attorney General Andrew Cuomo, top executives from the insurance behemoth AIG have agreed to give back at least $30 million in bonus money from a pool of $165 million the company recently doled out.

Nine out of ten of the top bonus recipients at the Financial Products division at AIG are returning their bonuses in full. 15 of the top 20 recipients will return bonuses, which will amount to over $30 million.

Cuomo said Monday that AIG began to cooperate with his office and "at the end of the day" his office estimates it can "recoup" about $80 million.


"You have done the right thing," Cuomo said he would tell those employees. And he added "I believe the employees have set an example."


From among the top earners, $30 million, Cuomo said, came from 15 of the top 20 bonus earners who each agreed to give back their total bonus. He said others had not yet been contacted, were considering whether or not to give back and only a few had outright refused. "It's a difficult decision," Cuomo said.

AIG Bonuses 'Staggering' in Size, Seven Execs Received Over $4M Each

This for running the company into the ground.

Kat

Hi Scttrbrain,

What is running the company into the ground? Giving back the money? Are they going to list who gave back what? And who do we know it's really given back and it's not just bs? How could that ever be proven I wonder...

I don't know what AIG covers, I mean what businesses but I have to wonder who would ever trust them after this. I don't have AIG insurance and I wouldn't buy it either, not now.

I don't know how these companies expect our trust after this. Doing the right thing NOW? And 30 million out of a 165 million does that sound fair or not, I don't know.

Since they are not only policy financiers but also re-insurers, you may not even KNOW that they are covering you to some degree. That's their business, financing policies and re-insuring.

AIG Global Real Estate* comprises a group of international companies within AIG Investments that invest in and actively manage real estate for clients and AIG companies around the world. As of 31 December 2008, AIG Global Real Estate has approximately US $26 billion in equity under management. AIG Global Real Estate’s property portfolio includes over 53 million square feet of retail, residential, industrial, office and hospitality properties owned, managed, or under development in more than 50 countries. AIG Global Real Estate is headquartered in New York with over 35 regional offices, including Atlanta, Dubai, Hong Kong, London, Los Angeles, Mexico City, Moscow, Mumbai, San Francisco, Seoul, Shanghai, Singapore and Tokyo. Kevin Fitzpatrick has served as AIG Global Real Estate’s president since inception in 1987 and currently leads the real estate team, which includes more than 500 professionals.

Although it provides services to millions of people across the world, it recently announced the biggest quarterly loss in corporate history.

AIG provides insurance and financial services in more than 130 countries.

The group and its subsidiaries employ more than 100,000 people around the world, including 2,000 in the UK, and it is listed on the New York Stock Exchange, as well as stock exchanges in Ireland and Tokyo.

It provides a range of insurance services to a variety of commercial, institutional and individual customers.

It also provides retirement and asset management services around the world.

The insurer has 30 million US policy holders and provides insurance to more than 100,000 companies and other entities.

It is known across the world as a major sponsor of the football team Manchester United.

However, recent financial troubles mean the insurer will not be renewing its sponsorship agreement with the football club when the deal expires in 2010.

Long history

The company was founded in 1919 in Shanghai, China by the American businessman Cornelius Vander Starr.

In 1949 he moved the company's headquarters to New York where it remains today.

The company was listed on the New York stock exchange in 1969, and has grown through acquisitions.

In 2005 it became embroiled in a row with the US Securities and Exchange Commission over the way the company was operating.

In the wake of the controversy, Hank Greenberg - who had been the company's chief executive since 1967 - resigned and was replaced by Martin Sullivan.

At the beginning of 2008 it was ranked the 18th biggest company in the world in the Forbes Global 2000 list.

In June 2008, after two consecutive quarters of record losses, Martin Sullivan left the company and was succeeded by former Citigroup chief executive Robert Willumstad.

Mr Willumstad was awarded a $1m annual salary, and a potential bonus and incentive package worth $21m.

Hard times

But the timing could not have been worse for Mr Willumstad, as the credit crunch soon hit AIG hard.

The company soon racked up billions of dollars of losses related to the problems afflicting the housing and credit markets. AIG played a key role in insuring risk for financial institutions around the world.

On 16th September 2008, the US Federal Reserve announced an $85bn rescue package for AIG to save it from collapse.

Under the two-year agreement, the central bank took a 79.9% stake in the insurer.

Mr Willumstad had hoped to stay at the company for several years, but as part of the company's rescue deal he was replaced by the former boss of Allstate Corporation, Edward Liddy.

The government was soon forced to put a further $40bn into the company in November to save it from collapse.

Under the new deal, the existing $85bn government rescue package was restructured, cutting the $85bn to $60bn.

AIG was back in the news earlier this month when it reported losses for the final three months of 2008 of $61.7bn - the largest quarterly loss in corporate history.

It then hit the front pages when President Barack Obama expressed outrage at the $165m of bonuses that the insurer had agreed to pay to executives.

US Treasury Secretary Timothy Geithner has said that the $165m will be deducted from government funds due to be paid to AIG.

Kat

What is running the company into the ground? The greedy damn ceo's and bigwigs that want more and more. They invested monies that were loaned out and sold loans for their long term worth. With so many defaults the loans became worthless. In the hole if you will. That is just tiny piecec of it.

I read where AIG is suing the Feds about all this.
I don't know if it was before or after the agreement to return money.

By David S. Hilzenrath
Washington Post Staff Writer
Saturday, March 21, 2009; Page D01

As AIG takes billions of dollars from the federal government to stay afloat, it is suing the government for millions more.

This Story
AIG Suing To Recover Taxes in IRS Dispute
Special Report: AIG
The big insurer is trying to recover $306.1 million of taxes, interest and penalties from the Internal Revenue Service. Among other things, AIG is contesting an IRS determination last year that the company improperly claimed $61.9 million of tax credits associated with complex international transactions.

AIG has also asked a court to make the government reimburse it for money spent suing the government.

Given that the government owns 79.9 percent of AIG and has been using taxpayer money to fill a seemingly bottomless hole at the company, the lawsuit might seem like a case of biting the hand that feeds it. But an AIG spokesman said the company has an obligation to press its case.

AIG believes it overpaid the IRS, and it "has a duty to its shareholders, including the government and other shareholders, to insure that it pays the proper amount of taxes," spokesman Mark Herr said by e-mail.


http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032003089.html

That's the one!
Now, can I pat you on the head for being smarter than the average Bear?

willing...i was the one that posted it in another thread...i knew where to look

You just have to sign up for news to get this hon. I got it in my inbox.

Yellow.....

Kat

Well isn't that honorable of the few who are returning it. The ones that do not work there anymore will probably not give it back. They had contracted bonuses due from the company but were not there anymore so we can kiss those good bye I am sure.

Interesting, thanks for the tip, skpcg.

Thanks for all the info guys. Man I have a few choice words for this company but they can't be shared in polite company. This AiG has a huge set on them don't they? Ack!!

The money given back is up to $50 million now.

http://news.yahoo.com/s/ap/aig_bonuses

the bill was passed for the bail out and was rushed. they could have caught the bonuses before they gave AIG the money but didn't. if it had been reviewed more carefully...AIG wouldn't have been able to use the money for bonuses...but congress loaned it to them...now they are outraged????

I am not happy about AIG's behavior.

I can just imagine telling my parents that I was having a rough time and thought that I was going to lose my house. My parents give me money to help me. I then buy a jet ski instead of putting the money towards the house. My parents would be very angry about that. They would have expected me to use that money wisely.

AIG is a greedy company..no doubting that....but what abou congress pushing the bail out bill without catching anything first? congress has no part in the blame????? Dodd/Geithner???? or Dodd's wife working as an "outside" director for a company controlled by AIG?

all I keep hearing is how naughty AIG is...how dare they. who gave them the money in the first place?

Of course Congress should have proofed that bill. But..that doesn't take away AIG's responsibility to do right.

if the bonuses were in the bill then no they shouldn't have to give it back. congress should have made provisions for the money to NOT go to bonuses. congress handed over the tax payers money.....then gets outraged because they couldn't bother to read the bill over carefully???? how about cut those that approved the bill to get cut in salary to help pay back into the system. they did....not us so they should have to pay

More today about AIG.


WASHINGTON – Treasury Secretary Timothy Geithner called on Congress Tuesday to grant him new powers to regulate huge financial companies like insurance giant AIG, whose failure would pose a grave danger to the U.S. financial system and the broader economy.

Specifically, Geithner wants powers similar to those of the Federal Deposit Insurance Corporation, which has authority to seize control of banks, take over their bad assets and sell good ones to competitors.

"AIG highlights broad failures of our financial system," Geithner told the House Financial Services Committee. "We must ensure that our country never faces this situation again."

Federal Reserve Chairman Ben Bernanke, appearing with Geithner, agreed. He said the government's bailout of troubled insurance giant American International Group Inc. underscores the urgent need to safely wind down financial giants on the verge of collapse and subject them to much stronger regulatory oversight.

Much of the discussion centered on ways to help the government better deal with future AIG-like companies whose failure could devastate the financial system and the drag down the economy.

Geithner made it clear he believes the treasury secretary should be granted unprecedented power, after consultation with Federal Reserve Board officials, to take control of a major financial institution and run it. The treasury chief is an official of the administration, unlike the FDIC, which is an independent regulatory agency.

Bernanke and Geithner were braced for a scolding before lawmakers over the handling of bonuses at American International Group Inc., which has become a symbol of reckless risk-taking on Wall Street.

For his part, the Fed chief said he wanted to sue to stop insurance giant AIG from paying millions in bonuses, but lawyers advised against doing so.

AIG is a globally interconnected colossus, with 74 million customers worldwide and operations in more than 130 countries. The government decided it was simply too big to let fail.

"Its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income and jobs," Bernanke told the panel.

As a result, the government has bailed out AIG four times, to the tune of more than $180 billion altogether. The company recently paid at least $165 million in bonuses to employees who worked in the financial products division that has been blamed for the its near-collapse. The bonuses came even as AIG reported a stunning $62 billion loss, the biggest in U.S. corporate history.

New York Attorney General Andrew Cuomo said Monday that 15 employees who received some of the largest bonuses from AIG have agreed to return them in full, totaling about $50 million.

Bernanke said it was "highly inappropriate to pay substantial bonuses" to the employees. Bernanke said he asked that the payments be stopped but was told that they were mandated by contracts agreed to before the government seized control of AIG on September 16.

"I then asked that suit be filed to prevent the payments," he said. Bernanke said that his legal staff counseled against this action on the grounds that Connecticut law provided for substantial punitive damages in the event any such suit failed. AIG's financial products division has a base in Connecticut.


"As a result, the government has bailed out AIG four times, to the tune of more than $180 billion altogether. The company recently paid at least $165 million in bonuses to employees..." Yikes!!