A.I.G. to Suspend Millions in Executive Payouts

The beleaguered insurer American International Group has agreed to suspend payments to executives from a $600 million bonus fund as well as $19 million in payments to its former chief executive, the New York attorney general announced on Wednesday.

The moves are the latest steps in an effort by the attorney general, Andrew M. Cuomo, to prevent bonuses and other compensation to former executives at A.I.G., which in recent weeks has received tens of ... Full Story »

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4.2
by Marsha Iverson - Oct. 22, 2008

Perhaps this is more of a twisted "feel good" story than breaking news. Glater gives a delicious report of the legal moves by New York's attorney general to ensure that the AIG executives whose management practices bankrupted the company don't benefit from their malfeasance.

I'm hoping that the AIG executives are the first in a long string of financial 'leaders' who don't get their mind-boggling bailout benefits. I would be happier if the money withheld from these D&G-suited pirates went to pay back the taxpayers for the money loaned to their firms--or at least go toward repaying the bailout.

Mr. Cuomo has already called on A.I.G. to help recover payments made to former executives at the company. During the call with reporters, Mr. Cuomo suggested that his actions offered a template for dealing with executive compensation at companies now receiving taxpayer money through the bailout approved by Congress this month. “Once a company accepts tax dollars, there are different rules,” Mr. Cuomo said. “These are taxpayers who did not voluntarily make an investment in these companies. In many ways it was a forced investment.” The suspension of payments appears to be the product of negotiation between Mr. Cuomo’s office and A.I.G., but last week the attorney general raised the prospect of using New York law to recover past payments to executives whether the company cooperated or not.

Bravo, Cuomo! May Congress follow your lead!

(13 answers)

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