Cuomo warns AIG over year-end bonuses

Cuomo warns AIG over year-end bonuses

Tue Nov 18, 2008 6:00pm EST  Fat Cat And Mouse, © Images.com/Corbis, RM, 2, Arrogance, Attitude, Business, Businessmen, Businesspeople, Cardio, CEO, Cigar, Commercial art and graphic design, Company executive, Conceptual, Consultant, Consultation, Corporate, Corporation, Design arts, Dieting, Downsizing, Encouragement, Exercise equipment, Exercise machine, Exercising, Expenses, Fat, Feline, Illustrations, Indifference, Inertia, Insolence, Laziness, Mammal, Manager, Mouse, Obesity, People, Rodent, Stopwatch, Supervisor, Timer, Treadmill, Trimming, Watch, Weight loss

By Grant McCool

NEW YORK (Reuters) – New York Attorney General Andrew Cuomo warned American International Group Inc (AIG.N) on Tuesday of “significant legal ramifications” over executive bonuses as part of his drive to force rescued firms to drop year-end payments.

“Please inform my office as soon as possible what AIG plans to do with respect to executive bonuses and pay raises this year,” Cuomo wrote in a letter to AIG Chief Executive Officer Edward Liddy. “As you know, I believe AIG’s decision has significant legal ramifications.”

Public outrage over lavish banker pay has prompted Goldman Sachs (GS.N) and UBS (UBSN.VX) to announce their executives would not be receiving year-end bonuses.

Bonuses have been strongly criticized as U.S. taxpayers, suffering the worst financial crisis since the Great Depression, question the U.S. Treasury Department’s $700 billion bailout of the industry that played a large role in creating the crisis.

Cuomo and California Congressman Henry Waxman are investigating executive pay, putting pressure on firms over their policies of paying out millions of dollars in bonuses to executives each year.

In his letter to Liddy, Cuomo said, “it seems hard to imagine that AIG could pay significant bonuses or give raises to its executives after the company has quite literally been bailed out by the American taxpayer.”

Cuomo said in a statement on Monday that it was time for the rest of Wall Street “to look in the mirror” and follow UBS and Goldman Sachs. He said Citigroup (C.N), which is cutting 52,000 jobs, should announce quickly that top executives will not receive bonuses.

Earlier in November, the U.S. government invested $125 billion in Goldman, Citigroup and seven other large U.S banks. Companies receiving funds agreed to restrictions on executive compensation.

Compensation for executives below the very top level is not disclosed, but banks are expected to cut their bonuses by 50 to 70 percent compared with last year.

(Additional reporting by Joseph Giannone; Editing by Bernard Orr)

Share with Others

3 comments on “Cuomo warns AIG over year-end bonuses”

  1. DrB Reply

    Look if AIG doesn’t cut these bonuses then don’t take the Gov. Money.
    These guys really P me off. What arrogance. Save the best and the brightest??
    Give me a break. My grandson could have done better.
    Mr. Pres. Please no more money for these rotten scoundrels. I don’t care what their lawyers say. Don’t we the tax payers have any lawyers???
    Like I thought, good money after bad. Really should have just bailed out the middle class by paying their mortgages and cc debt directly. Sounds wild, but everyone benefits then and your really going from the bottom up. Giving money to the top guys just never stops. They have this amoral sense of themselves. This corruption of the wealthy and powerful has no bottom. Its just a way of life to these guys. Imagine that, they are outraged that they have to cut their bonuses after running their company into the ground and gouging the profits out of it.

    On second thought. They should actually just go to jail without any pay whatsoever.
    I am not kidding. If they want to keep the money then lets prosecute them and send them to jail. They are embezzling money from the gov. and the taxpayers of the US. They are criminally libel to their shareholders. Come on Mr Pres. get some good lawyers and lets get it on if they want to act like this.

  2. jax Reply

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.