Cuomo: 73 AIG Executives Got $1 Million Bonuses or More
By Tomoeh Murakami Tse
Seventy-three employees of troubled American International Group received more than $1 million in bonuses under contracts that guaranteed them 100 percent of their 2007 pay in 2008 regardless of performance, New York State Attorney General Andrew Cuomo said.
The revelation comes a day after Cuomo subpoenaed AIG for information regarding $165 million paid to executives and other workers in the company's troubled financial products division, chiefly responsible for bringing the insurance giant to the brink of collapse last year. The firm has required $170 billion in government injections.
"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 a letter today to Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee. "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 declined to comment on Cuomo's letter. But a person familiar with the situation said the company did not want to release the names because of privacy issues and also out of concern for the safety of the individuals. The company has been flooded with phone calls and death threats since news reports over the weekend about the bonuses.
"If you release those names . . . you put those people in harm's way," the person said.
Cuomo had requested the names of the recipients and expressed indignation that AIG had not disclosed them. The company, he said, had claimed the bonuses were "vital" to retaining key employees who could oversee an orderly unwinding of the unit.
"If AIG were confident in its claim that those who received these large bonuses were so vital to the orderly unwinding of the unit, one would expect them to freely provide the names and positions of those who got these bonuses," he said.
He also noted that of the 73 people who got bonuses of $1 million or more, 11 no longer work at the company.
The top bonus recipient got more than $6.4 million, Cuomo said. The top seven earners received payouts of more than $4 million each, while 22 people received bonuses of $2 million or more, Cuomo said.
The bonus contracts, written in March of last year, included a provision that required most bonuses to amount to 100 percent of their 2007 bonuses, Cuomo said.