Read other letters about this article

• Tuesday, March 17, 2009 01:06 PM

  Letter from NY AG Cuomo to Barney Frank today

  Already my Office has determined that some of these bonuses were staggering in size. For example:
  
  The top recipient received more than $6.4 million;
  
  The top seven bonus recipients received more than $4 million each;
  
  The top ten bonus recipients received a combined $42 million;
  
  22 individuals received bonuses of $2 million or more, and combined they received more than $72 million;
  
  73 individuals received bonuses of $1 million or more; and
  
  Eleven of the individuals who received "retention" bonuses of $1 million or more are no longer working at AIG, including one who received $4.6 million;
  
  Again, these payments were all made to individuals in the subsidiary whose performance led to crushing losses and the near failure of AIG. 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 ~ taxpayer bailout. Something is deeply wrong with this outcome. I hope the Committee will address it head on.
  
  We have also now obtained the contracts under which AIG decided to make these payments. The contracts shockingly contain a provision that required most individuals' bonuses to be 100% of their 2007 bonuses. Thus, in the Spring of last year, AIG chose to lock in bonuses for 2008 at 2007 levels despite obvious signs that 2008 performance would be disastrous in comparison to the year before. My Office has thus begun to closely examine the circumstances under which the plan was created.

  Letter to House Committee on Financial Services: http://www.oag.state.ny.us/media_center/2009/mar/House%20Committee%20Letter%203.17.09.pdf

  —EJ Read EJ's other letters
  Permalink
  Flag
  Click "Submit Flag" if you feel this post is inappropriate. Explain why below if you wish.

  Cancel