A suspicious Cuomo eyes AIG bonuses

New York Attorney General Andrew M. Cuomo queried AIG in a letter yesterday about what the insurer was planning to do about bonuses.
Since American International Group Inc. of New York has already received more than $150 billion in lifelines from the government, the insurer should be transparent with taxpayers about its plans for executive compensation this year, Mr. Cuomo said in a letter to Edward Liddy, chief executive of American International Group Inc. of New York.
The decision for executive bonuses and pay raises this year has “significant legal ramifications,” he wrote.
“Taxpayers have now sunk billions into the company to keep it afloat,” Mr. Cuomo wrote.
“It thus seems hard to imagine that AIG could pay significant bonuses or give raises to its executives after the company has quite literally been bailed out by the American taxpayer.”
He gave examples of UBS AG of Zurich, Switzerland, and Barclays PLC of London, which have said no to executive bonuses this year.
The Goldman Sachs Group Inc. of New York, which “received far less in federal funding than AIG,” has also decided against bonuses for seven of its executives.
AIG spokesman Joe Norton acknowledged the company’s receipt of the letter and said that the insurer would respond, but did not provide a time frame.
AIG has already agreed to freeze payments under ex-CEO Martin Sullivan’s $19 million contract and to make no payments from its $600 million compensation and bonus pools from its Financial Products unit — the infamous subsidiary that contributed to the company’s downfall in September.
Earlier this week, Mr. Cuomo also told Citigroup Inc. of New York its executives should do without bonuses this year, after the company announced it would eliminate 52,000 positions.

Related Topics: American International Group (AIG)