Thread: Treasury objects to AIG bonus payments

UPDATE: Mr. Geithner received a letter back from the CEO of AIG saying, in essense -- my hands are legally tied and we HAVE to give these bonuses to the SAME GROUPS/DEPARTMENTS WHO WERE RESPONSIBLE FOR THE SUB-PRIME LOAN DISASTER -- It's time to write Mr. Geithner and AIG and DEMAND OUR TAXPAYER MONEY BE TAKEN BACK AND FOR THE GOVERNMENT TO CONSIDER AIG INSOLVENT SINCE THE AMERICAN TAXPAYERS NOW OWN 80% OF AIG......... FURTHER, THESE AIG EXECS NEED TO BE BROUGHT UP ON CORRUPTION AND FRAUD CHARGES AND THROWN IN JAIL FOR THE REST OF THEIR LIVES!!!!!!!

Treasury objects to AIG bonus payments

Sat Mar 14, 2009 7:59pm EDT
WASHINGTON (Reuters)

Embattled insurer American International Group agreed to revamp its bonus structure on Saturday after Treasury Secretary Timothy Geithner objected to its plans to pay out substantial sums for 2008, Obama administration officials and the company's chairman said.

AIG (AIG.N), which has received three government bailouts totaling $180 billion, will sharply cut remaining salaries for 2009 for top executives of its AIG Financial Products unit and will work with Treasury to realign 2008 bonuses to reflect the company's restructuring and repayment goals, AIG Chairman Edward Liddy said in a letter to Geithner.

AIG Financial Products was the unit that made bad bets on toxic mortgages that led to the company's near collapse.

Liddy said the firm was legally obligated to make already-committed 2008 employee-retention payments, the value of which were set last year before problems arose at the Financial Products unit.

"Some of these payments are coming due on March 15, and, quite frankly, AIG's hands are tied," Liddy said, adding that he found the arrangements "distasteful."

But he said he would work with Geithner to resolve the issue.

An Obama administration official said it was unacceptable for Wall Street firms receiving government assistance to pay million-dollar bonuses, but concluded that the retention payments were legally binding.

The Treasury will continue to negotiate with AIG to bring these payments down and seek to recoup the funds through mechanism outside of these contracts.

(Reporting by Glenn Somerville; Writing by David Lawder; Editing by Philip Barbara)

http://www.reuters.com/article/newsOne/ ... ZR20090314

Give them the bonuses....but then the government should fine them for all the fraud. The fines should amount to ten times the bonuses.

First this is bad management, not knowing what kind of grave one unit of the company is digging for the entire company. And as far as I am concerned, any companies receiving taxpayer dollars should not even be able to buy donuts for their employees without taxpayer approval. When are these guys going to be able to face reality?

The banks should have never got bail outs in the first place. They chose to come up with negative equity loans, promoted refinancing when prices were going up, loan money to high risk people and never thought for a minute that prices would decrease. The government should have given the citizens and legal residents money instead so they could use it to pay off credit cards, bills or spend it on things.