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Inflation: AIG Bonuses Nearly Four Times Larger Than Thought
May 05, 2009 5:48 PM
ABC News' Matthew Jaffe Reports: AIG, the recipient of approximately $180 billion in government bailout aid, paid out over $454 million in bonuses company-wide in 2008, according to documents that the company submitted to Congress.
The embattled insurance company, which ignited a heated controversy in March for dishing out $165 million in retention payments to employees in its troubled Financial Products division, revealed the bonuses in response to written questions from Rep. Elijah Cummings, D-Md.
The $454 million number is now the third different figure that AIG has disclosed for its 2008 bonuses, with each number far larger than the previous one.
On March 18, AIG CEO Edward Liddy told Cummings at the conclusion of a House Financial Services subcommittee hearing that AIG had paid out around $9 million in corporate bonuses in 2008.
"How much in bonuses -- not retention payments -- have you paid to AIG employees in 2008 and what was the range of bonuses paid?" Cummings asked Liddy.
"I'll provide you the information. I think it might have been in the range of $9 million," Liddy replied.
However, just two days later, Politico reported that AIG had revealed that they paid out $120 million to over 6,000 employees, a number confirmed at the time by an AIG spokesman.
But now, in a document sent to Cummings on May 1, AIG says they actually paid out $454.7 million.
The bonuses break down as follows:
- Domestic Life and Foreign Operations: $120,447,550
- Property Casualty Group: $21,304,029
- Foreign General Issuance Operations: $43,986,506
- Retirement Services Operations: $13,886,352
- Financial Services: $26,752,858
- Asset Management Group: $106,899,470
- Corporate-wide Variable Plan: $121,495,140
TOTAL: $454,771,905
In its written response to Cummings, AIG said it had 374 variable bonus plans throughout the entire company, which at one time was one of the world's largest insurance providers. The company said it also has nearly 236 plans where employees can earn more through sales and commissions, as well as other plans based on requirements from foreign governments or plans that pay based on ownership interests on investments in certain products.
After receiving AIG's new bonus figure, Cummings, who has repeatedly called for Liddy's resignation, said he was not shocked that AIG had changed their number, but rather that it had been changed so drastically.
"Given the company's history of constantly changing answers, I wasn't surprised to see a new figure from AIG, but even I was shocked to see the number jump from $120 million to nearly $455 million," he said. "I cannot understand why AIG cannot give us straight answers to these simple questions."
UPDATE: AIG spokeswoman Christina Pretto says, "Congress asked us for additional information regarding all performance compensation paid to employees around the world. We have provided details on some 374 variable performance plans for work done by lower level employees last year. These are not new payments and are not part of AIG's corporate executive bonus pool, which we reported in March was approximately $120 million."
ABC News' Charlie Herman contributed to this report.
May 5, 2009 | Permalink | Share | User Comments (41)
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I guess crime does pay after all...
Posted by: Velvetjones | May 5, 2009 6:27:19 PM
Let's cut corp. taxes.
Posted by: GOP | May 5, 2009 6:29:57 PM
Obviously, these people (who are asking the questions) have never worked in the insurance business. The whole thing is based on a structured pyramid scheme. You (the customer) keep paying and renewing and the agent who originated the policy (even if he's long retired or sold it to another agent or the company) keeps getting a percentage of your premiums. Those are called bonuses. It's the way the business operates. What AIG did was wrong, no doubt, but don't keep changing the rules on them if you don't understand the rules. And no, I'm not an insurance agent and I don't work for AIG.
Posted by: aztec69 | May 5, 2009 6:31:40 PM
This si the end of their free ride, let them go uinder who gives a crap
Posted by: NH voter | May 5, 2009 6:40:29 PM
Looks like Obama is the Fox guarding the hen house...hey America YOU'VE BEEN HAD....AGAIN!
Posted by: CC | May 5, 2009 6:41:02 PM
Bush's fault.
Posted by: Mike Jones | May 5, 2009 6:45:18 PM
BRILLIANT! Give thieves money and expect them to do the right thing... Doh!!!
ALL of the bailout money should have gone to the people, who would have paid of mortgages, bought homes, bought cars, paid off loans, invested into the stock market, went shopping, made home improvements, etc... or put it in the bank.... Evenly distributed in all sectors.
Instead we get more of the same, what a waste!
Posted by: Squierghia74 | May 5, 2009 6:55:05 PM
That is exactly the figure that the Connecticut AG's office gave out when everyone was complaining last time -- either the interns need to go or your correspondence are just clouding the issue.
Posted by: paulet | May 5, 2009 6:55:43 PM
For me, it is simple, I'm not doing business w/AIG, and I'm not going to let my company do business w/AIG.
Still NO REGULATION OR LAW CHANGES...still the same ole same ole...how many days has it been since the GREAT stock market crash of 2008????
Since the GREAT we need BILLIONS NOW Speech?
Now that's CHANGE you can believe in!
Posted by: Zito Barn | May 5, 2009 6:59:09 PM
For Mr. Obama, if it's not a political problem, it's not a problem. I think we will hear another fake outrage speech from Mr. Obama soon.
Posted by: young_voter | May 5, 2009 7:02:18 PM
Some people have to work for a living. They should have to give it back. With interest. Considering the damage they have done.
Posted by: Sara B. | May 5, 2009 7:03:52 PM
Looks like Obama is the Fox guarding the hen house...hey America YOU'VE BEEN HAD....AGAIN!
****************************************
paid out over $454 million in bonuses company-wide in 2008
Hmmmmmm... Obama in office in 2008?
Posted by: Thinking | May 5, 2009 7:05:22 PM
It doesn't really matter. Congress already acted and passed a 90% tax on the ill-gotten earnings anyways!
Posted by: Paul | May 5, 2009 7:09:17 PM
Funny. BHO wanted the stockholders from Chrysler to take less money, but he lets the AGI people pay out whoppin bonus and its okay? He handed the unions 55% of Chrysler, Oh yea, I get it the Unions are the ones that voted him in, so now its pay for play. Did the insurance companies do the same and pay big bucks to get him elected? When will it stop. He is giving away the country, rapeing us, and we're all watching. If you get in his way he will send one of his Chicago thugs, to threaten you. WHY WAS OUR COUNTRY NOT GOOD ENOUGH FOR ALL OF THE OBAMA PEOPLE?
Posted by: Carol in Alabama | May 5, 2009 7:15:36 PM
Let them do under! This just stuns me that they can get away with this crap!!
Posted by: Justme8811 | May 5, 2009 7:27:31 PM
Funny. BHO wanted the stockholders from Chrysler to take less money, but he lets the AIG people pay out big bonuses and its okay? He handed the unions 55% of Chrysler, Oh yea, I get it now, the Unions are the ones that voted him in, so now its pay for play. Did the insurance companies do the same and pay big bucks to get him elected? When will it stop. When there is no more America as we know it. If you complain, he'll send Ramm or another thug to threaten you. I ask all of you what was so wrong with OUR COUNTRY THAT HE AND THE ANGRY LADY WITH THE $540.00 SHOES ARE HELL BENT TO DESTROY OUR WAY OF LIFE.
Posted by: Carol in Alabama | May 5, 2009 7:28:21 PM
What the? Insurance companies are the devil, and AIG is the devil of devils. They should be dissolved.
Posted by: iamwomaninMI | May 5, 2009 7:53:19 PM
Why would you retain anyone who helped bring down the financial market. This is criminal and I hope what goes around, comes around for anyone who received this taxpayer money. What a bunch of criminals.
Posted by: Kris | May 5, 2009 7:58:59 PM
If AIG is going to pass out these huge bonuses to people that deserve no bonus, i'm going to apply for a job in that company..
Posted by: johnnylee | May 5, 2009 8:03:30 PM
Carol in Alabama. Would you like to blame Obama for fathering your children? It seems as though you are blaming him for everything else. Even crap that occured before he became prez. The bonuses for AIG employees were promised while GWB was president. Even GWB had nothing to do with that company bosses handing out huge bobuses to employees.
Posted by: johnnylee | May 5, 2009 8:13:39 PM
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