Saturday, March 21, 2009

Geithner's "AIG Employees Could Sue Us" Excuse Is Bullshit

I just found this interesting article from 2005 in the International Herald Tribune's archive, while searching desperately for another article I read last year about bonus shenanigans right before AIG started to tank. The article clearly stated that AIG was shifting UK executive bonuses to US execs before the bailout and the UK execs were pissed (I'll keep looking).

According to the rules stated in AIG's own annual report, Starr International, "a long-term incentive compensation pool for AIG's top 700 executives and managers," cannot pay out contractual bonuses to AIG executives if AIG's performance is down:

Starr International, according to AIG's 2000 annual report, is not supposed to set aside AIG shares for executives during any two-year period in its compensation plan when AIG does not report growth in its earnings per share.

Read the article to understand the amazingly twisted relationship between AIG and Starr - an offshore company "run by AIG's recently ousted chairman and chief executive, Maurice Greenberg, and by a handful of other senior former AIG executives, all handpicked by him."

And check out this October 24, 2008 article that says AIG will freeze executive bonuses! I guess their lawyers told them it's ok to do that.

A spokesperson for AIG said the company will not be paying ‘improper funds’ to senior managers until American taxpayers are ‘repaid with interest’ the money loaned by the US government to AIG.

Analysts predict that AIG’s response to executive payouts is likely to be a ‘recurring scenario’ given the anger of taxpayers who are footing the bill to bail out Wall Street traders.

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