After Rescue, Bonuses Still Flow At AIG
Insurance giant AIG was given $152 billion in bailout money by the federal government since nearly collapsing in September. Now the company is planning to take millions of that money and hand it over to employees in a program that sounds a lot like bonuses.
AIG's new CEO is only taking a single dollar for his compensation this year and the top 60 executives won't be getting bonuses. But that hasn't stopped AIG from finding a creative way to keep some of their top employees in what they're calling "retention payments," reports CBS News correspondent Priya David.
To some it seems like business-as-usual end-of-the-year bonuses.
On Wednesday, lawmakers grilled Assistant Treasury Secretary Neel Kashkari about AIG's bonus plan. Rep. Donald Manzullo, R-Ill., asked if a $3 million bonus was too much.
"It is excessive for a failing institution, yes," said Kashkari.
But so far, no one's stopping AIG from paying millions to some employees in its new retention program. The company has told 168 employees they'll receive between $92,500 and $4 million per individual if they stay with the company for one year. That angers some on Capitol Hill.
"These so-called retention payments are nothing less than bonuses," Rep. Elijah E. Cummings, D-Md., told CBS News. He sent letters to AIG, demanding details of the retention program.
"No one is indispensable, particularly when you've got tens of thousands of people being laid off from Wall Street and financial firms every day," Cummings said.
Nicholas Ashooh, AIG's senior vice president of communication, acknowledges that the perception of his company has taken a hit.
"Oh, it's terrible, it's terrible," he told CBS News.
Ashooh said the retention program does not include anyone in the firm's financial products business, the tiny arm of the company that torpedoed AIG with its high-risk, bad loans.
"We know that this is not a popular thing. A lot of people just won't accept it, but if you think about it, it's a calculated decision to keep businesses intact so that we can sell them and pay back taxpayers what we owe them," he said.
Whatever you call it, it's still money in the pocket of AIG managers.
"It's very unfortunate, but a culture of entitlement has emerged among Wall Street executives," said Peter Morici, a University of Maryland economist. "They're paid far too much money and they're trying to find ways around the rules."
Even though there are more layoffs every month, AIG says its top talent is being recruited to rival companies. In fact, the company says two of its top people just left this week, despite being offered big retention payments. AIG says it needs its best people to keep its healthy businesses profitable until it can sell them and the company plans to sell 65 percent of its businesses to repay its federal loan and get back on track.
Copyright 2009 CBS. All rights reserved. AIG's new CEO is only taking a single dollar for his compensation this year and the top 60 executives won't be getting bonuses. But that hasn't stopped AIG from finding a creative way to keep some of their top employees in what they're calling "retention payments," reports CBS News correspondent Priya David.
To some it seems like business-as-usual end-of-the-year bonuses.
On Wednesday, lawmakers grilled Assistant Treasury Secretary Neel Kashkari about AIG's bonus plan. Rep. Donald Manzullo, R-Ill., asked if a $3 million bonus was too much.
"It is excessive for a failing institution, yes," said Kashkari.
But so far, no one's stopping AIG from paying millions to some employees in its new retention program. The company has told 168 employees they'll receive between $92,500 and $4 million per individual if they stay with the company for one year. That angers some on Capitol Hill.
"These so-called retention payments are nothing less than bonuses," Rep. Elijah E. Cummings, D-Md., told CBS News. He sent letters to AIG, demanding details of the retention program.
"No one is indispensable, particularly when you've got tens of thousands of people being laid off from Wall Street and financial firms every day," Cummings said.
Nicholas Ashooh, AIG's senior vice president of communication, acknowledges that the perception of his company has taken a hit.
"Oh, it's terrible, it's terrible," he told CBS News.
Ashooh said the retention program does not include anyone in the firm's financial products business, the tiny arm of the company that torpedoed AIG with its high-risk, bad loans.
"We know that this is not a popular thing. A lot of people just won't accept it, but if you think about it, it's a calculated decision to keep businesses intact so that we can sell them and pay back taxpayers what we owe them," he said.
Whatever you call it, it's still money in the pocket of AIG managers.
"It's very unfortunate, but a culture of entitlement has emerged among Wall Street executives," said Peter Morici, a University of Maryland economist. "They're paid far too much money and they're trying to find ways around the rules."
Even though there are more layoffs every month, AIG says its top talent is being recruited to rival companies. In fact, the company says two of its top people just left this week, despite being offered big retention payments. AIG says it needs its best people to keep its healthy businesses profitable until it can sell them and the company plans to sell 65 percent of its businesses to repay its federal loan and get back on track.
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America will fall just like The Great Roman Empire. But this fall could trigger the end of all things as we know it. America is crumbling at its foundation of equal opportunity, freedom, and care for the fellow man. And tearing at the seems in modesty, honesty, and morals.
This is not the America that was envisioned for us and our posterity to come.
Will you change it?
any good American accept this money? Would you? What kind of people are they?
We need to work together not hide behind a contract. Shame on them.
Liddy actually wrote Geithner, "We cannot attract the best and brightest talent to lead and staff the AIG businesses...if employees believe their compensation is subject to continued change and arbitrary adjustment..."
Well, duh. compensate means to make up for something that was done and bonuses are adjustable based on performance.
And if we are paying these bonuses with our money to "the best and brightest talent", I want a refund. These are the same undeserving morons that got us here. I guess I should go to my boss and ask for a bonus after screwing up!
That seems to be the way things are going. They should all be fired and locked up for stealing from the American people based on the fact that they are recieving bonuses for a job poorly done. "Those contracts were null and void once they took the $170 Billion bailout money.."
Oh by the way, I am still waiting for a response from the government on my financial bailout bonus, i mean package!