Wikinvest Wire

Who's the $6.4 million man?

Wednesday, March 18, 2009

AIG Chairman and CEO Edward Liddy testifies before the House Financial Services Committee this morning, during which time one topic of discussion is likely to be the $165 million in bonuses awarded to executives in the division that helped bring global financial markets to their knees and, in the process, made the world's largest insurance company one giant government money pit.

The Wall Street Journal filed this report on the proceedings:

House Financial Services Chairman Barney Frank (D., Mass.) said he would ask AIG Chairman and CEO Edward Liddy for the names of bonus recipients. If the company doesn't provide those names, he said, Congress will formally subpoena them from the company.

"We also will be asking Mr. Liddy to give us the names of the recipients," Rep. Frank said at a hearing. "If [he] declines to give us the names, then I will convene the committee and have a vote to subpoena the names."
The hearings (now in progress) are not likely to be a friendly affair.

An earlier story in the Journal carried the graphic below that has been enhanced for your viewing pleasure.
IMAGE And a short excerpt:
The Obama administration said Tuesday it would seek to recoup from American International Group Inc. the $165 million in bonuses paid to employees of the bailed-out insurance titan as it tried to contain a national furor over the payments.

White House officials are looking to use an executive-pay provision inserted into the recently passed stimulus law. The administration has seized on language that would allow the Treasury secretary to claw back payments if they were "inconsistent with the purpose" of the Troubled Asset Relief Program or "otherwise contrary to public interest."
I wonder what the $6.4 million man's lawyer has advised him to do?


NMMM.NU said...

It is strange that everyone, icludes me speaks how much money AIG received as bonuses, however nobody speaks about the other side of the coin - Those people who receiving the bonus suppose to "fix" AIG. They will not do that for free. May be some people expects that, but I do not. I believe their salaries are not as high as the salaries to the previous management.

The current AIG management have very high responsibilities. Their job is very complicated etc. I will say once again - with big responsibilities must come big salary and big bonuses. Else there will be no stimulus for the management to fix the company.

More - many of them, I believe 50% had long time contracts in which the bonuses were calculated. If those bonuses are not paid, then, these people may sue AIG for much bigger sums.

The situation is really moral hazard one and I do not see any solution. If I was US government, I just would let AIG fail and drag along all US and world banking system. Then I would print money. Lots of money.

Anonymous said...

Ah, get bent you freaking idiot.

I'm sure the WAG guesses about who to send all that tax payer money to is tough work.

What I'd like to see is to cut off the rest of the funds to this POS, get the bonuses back. Then see how much of the funds we can get back from recipients.

The bonuses are just way to big. If these jokers leave over the bonuses then GOOD. It will kill this pig faster.

There should be fraud and conspiracy chrages against these guys (RICO). Not to mention civil suits against them personally.

I'd be going after multiple years of bonuses and their personel assets. Plus fine time with the guys from the hood in upstate NY.

Clearly the bonuses were an order of magnitude too large.


AJ said...

The fact that some of the bonus recipients no longer work at AIG should do much to dispel the illusion that these bonuses are meant to retain the best talent. Further, it should highlight that these individuals were well aware of the mess they had made, because otherwise they wouldn't have had their bonuses locked in for years to come.

Mathlete said...

Barney Frank is a bigger criminal than anyone at AIG. The American people are truly stupid and the politicians know exactly how to play on their emotions. People who think this is more important than the bailout itself, the stimulus, the other bailout, the future bailouts, and the Fed's buying of long-term Treasuries...then you are an ignorant emotional rube who needs to calm down and think rationally.

AIG is not the enemy. Congress and the President are the enemy.

Anonymous said...

The 6.4 million dollar guy is probably one of the trio who alone over the last few years gave Senator Chis Dodd in excess of $280000. The same Chris Dodd who changed the language in the stimulus bill to make sure those bonuses would not be blocked.

If you are a resident of Connecticut please let Chis Dodd know how you feel:

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