U.S. lawmakers move to strip AIG executives of bonuses

2009-03-18 05:43:59  

·Lawmakers vowed Tuesday to strip executives of AIG of their $165 million in bonuses. ·Democrats were crafting separate bills to tax up to 100% of generous bonuses ·"Recipients of these bonuses will not be able to keep all of their money," declared Reid.

    WASHINGTON, March 17 (Xinhua) --

Lawmakers at U.S. Congress vowed on Tuesday to all but strip executives of the troubled American International Group (AIG) of their 165 million dollars in bonuses.

    House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by AIG and other companies rescued by taxpayer money, according to U.S. media reports.

    Republicans said U.S. President Barack Obama's administration should have done more to stop the bonuses.

    "Recipients of these bonuses will not be able to keep all of their money," declared Senate Majority Leader Harry Reid.

    "If you don't return it on your own we will do it for you," Chuck Schumer of New York said.

    The financially strapped AIG, which has so far received more than 170 billion dollars in a federal rescue, was paying 165 million dollars of bonuses to its executives. In the fourth quarter of last year, the insurance giant lost 61.7 billion dollars, the largest corporate loss in history.

    Obama pledged on Monday that his administration will stop AIG from paying the "substantial sums" of bonuses to its executives.

    "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said, noting that the insurer is in financial straits because of "recklessness and greed."

    Obama said he has asked Treasury Secretary Timothy Geithner to "pursue every legal avenue to block these bonuses and make the American taxpayers whole."

    AIG would not be the only company to be named by either Democratic bill, but there was no question whose executives inspired the legislation.

    However, the bonuses for AIG executives were paid legally, part of a program that had been disclosed in advance in filings that the insurer made with the government, the U.S. media reported. Sharp questions have been raised about what the administration knew about the bonuses, and when. 

Obama slams AIG for paying bonuses to executives

2009-03-17 12:32:26  

    WASHINGTON, March 16 (Xinhua) --

U.S. President Barack Obama on Monday blasted insurance giant American International Group and pledged to try and prevent it from giving its executives 165 million dollars in bonuses after taking billions in federal bailout funds.

    "It's hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay," Obama said at the outset of an appearance to announce a plan to boost small businesses loans.

    "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said, adding that the insurer is in financial straits because of "recklessness and greed. "

    The president's remarks came as the financially strapped AIG, which Obama said has received "substantial sums" of aid from the government, was reported to be paying 165 million dollars of bonuses to its executives.

    The 165 million dollars were payable to executives by Sunday and was part of a larger total payout reportedly valued at 450 million dollars.

    Obama said he has asked Treasury Secretary Timothy Geithner to "pursue every legal avenue to block these bonuses and make the American taxpayers whole."

    "This isn't just a matter of dollars and cents," the president said. "It's about our fundamental values."

    AIG said on Saturday that the payments are legal because they were already promised in contracts signed with employees before the government provided the rescue aid.

    Edward Liddy, AIG's CEO, told Treasury Secretary Timothy Geithner in a letter Saturday that the bonuses could not be cancelled altogether because the company would risk a lawsuit for breaching employment contracts.

    Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees needed to turn the company around.

    As a response, the Treasury Department is planning to modify a planned 30 billion dollars rescue package to AIG, which was announced on March 2.

    Officials said Monday that new provisions would be attached to the terms of the aid plan that will provide the company an additional 30 billion U.S. dollars in federal assistance.

    Meanwhile, New York Attorney General Andrew Cuomo said his office on Monday issued a subpoena requesting that by late Monday AIG give more details of the bonuses, including each employees' job description and performance, and contents of the contracts under which the company has to make the payments.

    Cumo said AIG missed the deadline and that he will continue to investigate the issue to find out whether the bonuses are fraudulent under New York state law.

    AIG, the insurance giant that is now 80-percent owned by the U.S. government, lost 61.7 billion dollars in the fourth quarter of 2008, marking the largest corporate loss in history.

    The company has so far received more than 170 billion dollars in a federal rescue. The latest funding was announced on March 2, which is intended to support AIG as it absorbs 60 billion dollars in quarterly losses and operational and competitive upheaval.

Geithner: AIG to pay back government for hefty bonuses

2009-03-18 09:36:35  

    WASHINGTON, March 17 (Xinhua) --

U.S. Treasury Secretary Timothy Geithner said Tuesday that the troubled insurance giant American International Group (AIG) is to pay back the government for hefty bonuses it paid out to its executives.

    "We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company in the amount of the retention awards just paid," Geithner said in a letter to lawmakers.

    "In addition, we will deduct from the 30 billion dollars in assistance an amount equal to the amount of those payments," he also said.

    Geithner's letter came as outrage mounted over the news that the financially strapped the AIG, which has so far received more than 170 billion dollars in a federal rescue, was paying 165 million dollars of bonuses to its executives.

    He said that U.S. President Barack Obama had asked him "to fully review all additional measures at my disposal to recoup these bonuses and to recover funds on behalf of taxpayers."

    Meanwhile, the secretary said he would "work with" AIG chief executive Edward Liddy "on measures to wind down the AIG in an orderly way and protect the American taxpayer."

    Also on Tuesday, lawmakers at the U.S. Congress vowed to all but strip executives of the ailing insurer their 165 million dollars in bonuses.

    House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by the AIG and other companies rescued by taxpayer money.

    Republicans said U.S. President Barack Obama's administration should have done more to stop the bonuses.

    Obama pledged Monday his administration will stop the AIG from paying the "substantial sums" of bonuses to its executives.

    "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said, noting that the insurer is in financial straits because of "recklessness and greed."

    The AIG, which is now 80-percent owned by the U.S. government, lost 61.7 billion dollars in the fourth quarter of 2008, marking the largest corporate loss in history.

Editor: Sun

Report: AIG to pay millions in bonuses despite gov't pressure

2009-03-15 09:17:25  

    WASHINGTON, March 14 (Xinhua) --

Insurance giant American International Group, which has received 173 billion U.S. dollars in federal bailout cash, will still give its senior employees tens of million of dollars in bonuses, The Washington Post reported.

    In a phone call on Wednesday, U.S. Treasury Secretary Timothy F. Geithner told AIG Chairman and chief executive Edward M. Liddy that the payments were unacceptable and needed to be renegotiated, according to the report.

    The company has since agreed to change the terms of some of these payments.

    But in a letter to Geithner, Liddy wrote that the bonuses could not be cancelled altogether because the firm would risk a lawsuit for breaching employment contracts, said the report.

    Liddy also expressed concerns about whether changing the bonuses would lead to an exodus of talented employees who are needed to turn the company around, it added.

    AIG has agreed to restructure the 9.6 million dollars in bonuses it would have paid to the firm's top 50 officers. AIG's top seven executives, including Liddy, have already agreed to forgo this payment altogether.

Editor: Lin Liyu

White House: Latest aid to AIG is critical

2009-03-03 11:12:38  

    WASHINGTON, March 2 (Xinhua) --

The U.S. government's latest aid to the troubled insurance giant American International Group (AIG) is critical, White House spokesman Robert Gibbs said Monday.

    While answering questions raised by reporters, Gibbs did not rule out future help for the ailing insurer.

    The government determined that doing nothing was unacceptable, Gibbs said, adding that the potential failure of AIG was too big a risk to take when the economy is in a recession.

    Earlier Monday, the U.S. government announced it would provide another 30 billion dollars to AIG to stave off collapse of the insurance giant.

    The announcement came the same day as AIG, once the world's largest insurer, reported it lost 61.7 billion dollars in the fourth quarter of 2008, the biggest quarterly loss in U.S. corporate history.

    For all of last year, the insurer posted a net loss of 99.3 billion dollars.

    In an effort to avert a potentially catastrophic collapse of AIG, the U.S. government had already pumped some 150 billion dollars into the ailing company.

    "The company continues to face significant challenges, driven by the rapid deterioration in certain financial markets in the last two months of the year and continued turbulence in the markets generally," the Treasury Department and the Federal Reserve said Monday in a joint statement, announcing the aid.

    "The additional resources will help stabilize the company, and in doing so help to stabilize the financial system," the statement said.

AIG to get additional $30 bln aid from U.S. gov't

2009-03-02 06:46:29  

    NEW YORK, Mar. 1 (Xinhua) --

American International Group Inc. (AIG) will receive up to an additional 30 billion U.S. dollars in federal assistance as part of the latest revamp of its government bailout, the Wall Street Journal reported Sunday.

    The new funding is intended to support AIG as it absorbs 60 billion dollars in quarterly losses and operational and competitive upheaval.

    Under the plan, the insurer will repay much of the 40 billion dollars it owes the Federal Reserve loan with equity stakes in two AIG units overseas.

    AIG, the insurance giant that is 80 percent owned by the U.S. government, will report the largest loss in U.S. corporate history.

    The company has received 150 billions of government aid so far. That included a 60-billion-dollar credit line from the Federal Reserve, a 40 billion-dollar capital investment and 50-billion-dollar to wind down liabilities tied to mortgage-backed securities the insurer owned or backed through swaps.

    The U.S. Senate's banking committee has scheduled a hearing for March 5 to discuss AIG's bailout and the government involvement.     

Editor: Mu Xuequan