Saturday, October 24, 2009

AIG's shameful bosses get their pay slashed

Kenneth Feinberg, the US Treasury Department’s special master for executive compensation, has ruled that the bosses of American International Group Inc or AIG have had excessive pay and has now slashed it.

A total of seven American companies, including New York-based AIG, that got “exceptional” aid from the Treasury’s $700 billion rescue fund are involved. Cash salary reductions announced yesterday were about 90 percent and total compensation was cut an average of 50 percent. AIG, which got U.S. aid valued at $182.3 billion, ignited a backlash in March after giving about $165 million of retention bonuses to employees winding down the derivatives unit blamed for pushing the company to the brink of collapse. President Barack Obama called the bonuses an “outrage,” and then-CEO Edward Liddy asked employees getting more than $100,000 to return half. But four of five managers in the Financial Products unit hadn’t made good on pledges to return the retention bonuses as of August, Feinberg said in documents released yesterday. The fifth employee hadn’t made a promise. AIG’s proposal to pay the five a total of $13.2 million this year was rejected.

Instead the bosses are going to get $200,000 ($NZ 267,000) a year each, still a lot more than the many victims of their greed-driven excesses ever got as salaries.

This scurrilous organisation operates in New Zealand as AMERICAN INTERNATIONAL ASSURANCE COMPANY (BERMUDA) LIMITED with NZ companies office number 583021. It's likely, given that Bermuda is a known tax haven, that these bosses will use it as a means of circumventing the US Government's ruling. Details of the official filings including financial statements are downloadable free at the NZ Companies Office website. The last set of financial statements is about a year old, but still makes interesting reading. There are a lot of unanswered questions, of course, particularly in regard to the tens of millions of dollars shipped offshore.

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