Tuesday, December 23, 2008

Where's my Bailout

After Rescue, Bonuses Still Flow At AIG

Dec. 11, 2008

(CBS) Insurance giant AIG was given $152 billion in bailout money by the federal government since nearly collapsing in September. Now the company is planning to take millions of that money and hand it over to employees in a program that sounds a lot like bonuses. AIG's new CEO is only taking a single dollar for his compensation this year and the top 60 executives won't be getting bonuses. But that hasn't stopped AIG from finding a creative way to keep some of their top employees in what they're calling "retention payments," reports CBS News correspondent Priya David.

To some it seems like business-as-usual end-of-the-year bonuses. On Wednesday, lawmakers grilled Assistant Treasury Secretary Neel Kashkari about AIG's bonus plan. Rep. Donald Manzullo, R-Ill., asked if a $3 million bonus was too much. "It is excessive for a failing institution, yes," said Kashkari. But so far, no one's stopping AIG from paying millions to some employees in its new retention program.

The company has told 168 employees they'll receive between $92,500 and $4 million per individual if they stay with the company for one year. That angers some on Capitol Hill. "These so-called retention payments are nothing less than bonuses," Rep. Elijah E. Cummings, D-Md., told CBS News. He sent letters to AIG, demanding details of the retention program. "No one is indispensable, particularly when you've got tens of thousands of people being laid off from Wall Street and financial firms every day," Cummings said.

Nicholas Ashooh, AIG's senior vice president of communication, acknowledges that the perception of his company has taken a hit. "Oh, it's terrible, it's terrible," he told CBS News.

Ashooh said the retention program does not include anyone in the firm's financial products business, the tiny arm of the company that torpedoed AIG with its high-risk, bad loans.


QN: Retention Bonus - Where would they go?

Cartoon from www.investors.com

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