New York Attorney General Andrew Cuomo said on Monday that 15 employees who received some of the largest bonuses from American International Group Inc (AIG) have agreed to return the more than US$30 million in payments in full.
In total, AIG employees have agreed to return about US$50 million of the US$165 million in bonuses awarded earlier this month by the troubled insurer, Cuomo’s office said.
Cuomo said he still hopes that more AIG employees will return their bonuses. At most, Cuomo said his office could hope to recoup US$80 million of the bonuses — roughly the amount paid out to US employees.
PHOTO: AFP
“I applaud the employees who are returning the bonuses,” Cuomo said during a conference call with reporters. “I think they are being responsive to the American people.”
Cuomo said nine of the 10 people receiving the largest awards have agreed to return their bonus. Additionally, 15 of the top 20 bonus recipients have consented to returning their money. Cuomo said some have refused to return the money, while others are still considering it.
“We are deeply gratified that a vast majority of Financial Products’ senior leadership have expressed a willingness to forsake their recent retention payments,” spokeswoman Christina Pretto wrote in an e-mailed statement. She said the company was continuing to review the responses of the other employees.
AIG has come under heavy criticism because the bonuses were given to employees after the company received US$170 billion in government bailout money. AIG chief executive Edward Liddy told Congress last week that some of the employees were willing to give the money back.
But Liddy has expressed concern that the company may not be able to attract and retain talented employees if they believe their compensation is subject to adjustment by the Treasury.
Pretto said on Monday that a “handful” of senior-level executives have resigned from the financial products division and that there would likely be more resignations to come.
“We do believe that at this point it’s all manageable,” she said.
Cuomo said he didn’t plan to release the names of the employees who agreed to return the bonuses and said there was no implied threat that if an employee did not return the bonus that their name would be released. Cuomo had sought the names of the employees who received bonuses from Liddy through a subpoena.
He said his office is continuing to assess the security of the employees.
About 400 employees and future employees in AIG’s financial products division received bonuses. Documents provided by AIG to the Treasury Department said the awards ranged from US$1,000 to nearly US$6.5 million. Seven employees were to receive more than US$3 million.
Last week Cuomo said AIG paid bonuses of US$1 million or more to 73 employees, including 11 who no longer work there.
Separately, Connecticut’s consumer protection division has subpoenaed AIG, demanding that the contracts and names of employees who received the bonuses be provided by March 27. Governor M. Jodi Rell has said she wants the division to determine whether the bonuses can be voided under the Connecticut Unfair Trade Practices Act.
The headquarters of AIG’s financial products division is located in Wilton, Connecticut.
Connecticut Attorney General Richard Blumenthal said his office also demanded the bonus recipients’ names and the amounts.
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