AIG Employees Return Bonuses: Cuomo

As of Tuesday morning, nine of the top ten bonus recipients at American International Group Inc. (AIG) have agreed to relinquish their bonuses in full, according to assessments by New York Attorney General Andrew Cuomo. Of the top 20, 15 employees have agreed to return their bonuses. “I would like to say this to the individuals who have given the money back – You have done the right thing,” said Cuomo in a press statement Tuesday. “You have done what this country now needs and demands. We are living in a new era of corporate and individual responsibility. I thank you…” Cuomo and his team calculated that employees have agreed to return approximately $50 million of the $165 million dished out in bonuses on March 15. However, 47 percent of the $165 million pool has gone to Americans — about $80 million. Cuomo said he wanted to make public the names and details of bonus recipients, but felt it was necessary to evaluate the security and privacy of individuals following death threats against some employees. “Our legal theory is fraudulent conveyance, and we think it is a powerful legal theory,” Cuomo told reporters. “But if a person returns the money I don’t think it is in the public interest to name them.” He noted that those employees who have agreed to hand over their bonuses will immediately and permanently be removed from the list. An AIG spokeswoman told Bloomberg late Monday that a “handful” of senior executives have resigned from its Financial Products unit — the division largely blamed for the fall of the giant insurer. It was unclear, however, if any of the executives with the top bonuses had resigned. But she suggested that more employees from the unit would likely resign. Legislative efforts to recover the bonuses in full have been underway since last week. On the same day AIG CEO Edward Liddy testified in a special hearing, lawmakers sought to impose hefty taxes on bonuses paid out to employees of companies receiving federal support. The House voted Thursday in favor of the tax. But as of Monday, Senate majority leader Harry Reid indicated that further actions on the bill would be delayed. “Republicans have asked for more time to study the legislation, and they’re entitled to that,” he said as he opened the Senate on Monday afternoon. President Obama seemed apprehensive towards the current legislation, as he said in an interview Sunday on “60 Minutes,” that he had not reached a conclusion. “We can’t govern out of anger,” Obama said. Write to Kelly Curran at [email protected]. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.