The Daily Background
| A.I.G. is paying millions of taxpayer dollars in “retention bonuses” to employees who no longer work for them
by Arlen Parsa
NY Attorney General Andrew Cuomo reveals new facts about the recipients of A.I.G.’s supposed “retention bonuses” that the 80% tax-payer owned company claims are vital to keep key employees on staff:
• 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.
Q: What do you call a “retention bonus” to an employee who no longer works for the company?
A: I dunno, but not a “retention bonus.”
Very informative. Thanks.
retention bonuses usually have a clause that states how long the employee has to stay in order to qualify for the bonus, so if the retention period has passed (lets say six months) then the employee can go about her business and still collect the bonus because they fulfilled their part of the agreement.
Sausage still tastes good.
We need to separate the meaningful facts from the data, and also control for the fact that the media (and some blogs) as currently constituted make money from eyeballs watching or page hits and so driving traffic with ginned up outrage is a useful tactic.
Let sober heads prevail.
You were detailed on Belkin. Same standards here.
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Chris Dodd Hearts Unwarranted AIG Corporate Bonuses…
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