American International Group (AIG) had a party but the taxpayer gets the hangover, according to Andrew Cuomo, who is demanding the government-supported insurance firm forfeit all bonuses and other payments granted to its executive officers in recent months.
In a letter sent yesterday to AIG’s CEO and board members, the Cuomo took issue with the “unwarranted and outrageous” bonuses being paid to AIG executives in spite of the firm’s recent insolvency and subsequent borrowing from the federal government.
AIG, which just a month ago was facing the possibility of applying for bankruptcy protection, has since borrowed nearly $100 billion from the New York Federal Reserve in order to prop up its collateral positions. Company stock, which floated around $70/share this time last year, currently sits in the low single-digit region, having closed yesterday at $2.43/share.
The excesses noted by AIG critics in the midst of the company’s scramble for U.S. government aid include a $100,000 hunting excursion in England and a $444,000 California retreat, though the latter was awarded to top-performing insurance agents and not executive-level employees.
More damningly, Cuomo’s letter cites the $15 million golden parachute paid to departing CEO Martin Sullivan in June, and a $34 million bonus package permitted to former CFO Joseph Cassano, who left in February. Cassano also continued to receive a monthly payment of $1 million, according to Cuomo.
Cuomo’s letter demands that AIG “immediately cease and desist these improper and extravagant expenditures,” and “review, rescind, and recover all improper payments where appropriate.”
AIG has yet to release an official statement regarding the letter, but a spokesperson claimed the company would fully cooperate with the attorney general’s office.