Financial Crisis
Cuomo Announces AIG Will Hold Back Pay for Former CEO
Posted Oct 23, 2008, 11:00 am CDT
By Rachel M. Zahorsky
New York Attorney General Andrew Cuomo announced Wednesday that American International Group will withhold more than $600 million in compensation due to its former chief and other executives as critics balked at such payments after the U.S. bailout of the collapsed insurer, Bloomberg reports.
The announcement followed Cuomo’s threat last week that AIG, once the world’s largest insurer, would face legal action unless it stopped “extravagant” expenditures and recovered millions of dollars in unreasonable payments, Bloomberg reports.
“Until the taxpayers recoup their investment in AIG, which is now in excess of $120 billion plus interest, there should not even be any contemplation of bonuses for executive performance,” Cuomo said in a conference call Wednesday, according to Bloomberg.
Cuomo added that such pay packages helped cause the problems at AIG and other companies. Bloomberg notes that the attorney general alluded to executive compensation bonus plans that provided incentives “to maximize booked gains as opposed to actual value.”
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