Inflation: AIG Bonuses Nearly Four Times Larger Than Thought
EmailABC 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.
Rick Santorum Sweeps 3 States 
Pentagon to Open Additional Jobs to Women
I guess crime does pay after all…
Posted by: Velvetjones | May 5, 2009, 6:27 pm 6:27 pm
Let’s cut corp. taxes.
Posted by: GOP | May 5, 2009, 6:29 pm 6:29 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 pm 6:31 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 pm 6:40 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 pm 6:41 pm
Bush’s fault.
Posted by: Mike Jones | May 5, 2009, 6:45 pm 6:45 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 pm 6:55 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 pm 6:55 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 pm 6:59 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 pm 7:02 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 pm 7:03 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 pm 7:05 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 pm 7:09 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 pm 7:15 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 pm 7:27 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 pm 7:28 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 pm 7:53 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 pm 7:58 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 pm 8:03 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 pm 8:13 pm
Why is it that individuals continue to dump this issue on the Obama’s when they were not even in the picture when AIG handed out these bonuses. It seems that THIS COUNTRY started to be RAPED under the last few Republican Administrations and now he has to take ownership of it. Please people it is Big Business and lobbyist that created the current situarion let’s put blame where it belongs.
Posted by: Bryan | May 5, 2009, 8:24 pm 8:24 pm
Should have let them go out of business. and another company would have filled the Vacuum!
Posted by: joeyj1958 | May 5, 2009, 8:26 pm 8:26 pm
Obama wasn’t President until January 2009. You Republicans really need to get a grip. And BTW, Obama won. He’s President. We don’t have to tread down the path of failure anymore.
Posted by: Eric | May 5, 2009, 8:29 pm 8:29 pm
Oh my God, I am so sick of the very name AIG. Please let them fail along with the rest of the losers…The Banks can go to heck. I have my safe and secure Credit Union. I don’t feel sorry for anybody who still does business with a bank. They all suck.
Posted by: Sick of all of this | May 5, 2009, 8:34 pm 8:34 pm
One effect of AIGs failure would have been that all the credit default swaps it was liable for would not have been paid.
Would it be appropriate to ask who didn’t want AIG to fail? I am sure many CDS holders made and are making tons of money.
Shortly after Tim Geithner engineered the federal reserve bailout worth $80B last year, AIG anounced they had lost $67B due to CDSs (read that as paid $67B more than they made). Another $70B to $90B have been drained by AIG since.
Had we let AIG on its own, it would have filed for bankruptcy, and a lots of CDS holders would have had to get in line to collect in bankruptcy court whatever would have been available from its assets. The bailouts enabled AIG to stay open, and, thus, liable to pay.
So I ask again, who didn’t want AIG to fail? If we were to follow the money, we would find out who. Who collected CDS payouts, who did they know (in politics of course) and who got campaign contributions. I smell quid-pro-quo; follow the money, someone.
Posted by: Javier | May 5, 2009, 9:39 pm 9:39 pm
joey1958,
Obama has taken an downturn and turned it into an opportunity to grab power. Many times in the past, these sort of thing has been taken care of by letting failures fail and using stimulating actions such as tax cuts and direct immediate stimulus actions.
Obama on the other hand, has taken over corporations, banks, insurance companies; coerced investors, intimidated employees, proposed “stimulus” that doesn’t take effect until after economic predictions indicate the worse would be over, oh yeah, and ordered his cabinet to seek $100M of combined cuts.
He’s not solving anything in the short-term and he’s using people’s emotions to grab power and thwart the free market forces from cleaning up the economic downturn.
Surely, the economy will recover shortly, not aided by Obama’s action; however, the lasting legacy will be government control of industries and inflation and currency devaluation from the spending spree.
We can now say that the $700B bailout negotiated by Bush, an action I opposed, was a measured response to the downturn; Obama’s opportunistic power grab spells disaster. But surely his pitchfork brigades appreciate it.
Posted by: Javier | May 5, 2009, 9:54 pm 9:54 pm
All those trillions of dollars for banks and bloodsuckers like AIG should have been given directly to the people. At least it would have gone to the very same people who originally gave it to the Treasury. Giving it to these lowlifes so they can triple screw the average American is nothing short of rape and obscene. Our government has become the prostitutes of these pimps. They are all corrupt and deserve to get thrown out of office and thrown in jail for bribery and misconduct, along with the bankers and AIG. Let these banks all fail. We demand that government serve the people as it was intended when this nation was created.
Posted by: Jake | May 5, 2009, 9:55 pm 9:55 pm
Washington + Wall Street = 2 Peas in a pod
Posted by: beth | May 5, 2009, 10:03 pm 10:03 pm
Does not surprise me… nothing does anymore.
But Bernanke said we will all be better off by the end of the year… so we have something to look forward to.
Now tell me what that was again……..
Posted by: lm | May 5, 2009, 10:23 pm 10:23 pm
Nothing is surprising anymore. The tax payers were looted left and right and nothing is going to happen to the looters. It is disgusting form of capitalism that the past 8 years have encouraged and condeoned
Posted by: gjkotw01 | May 5, 2009, 10:24 pm 10:24 pm
Javier. Regarding AIG and all of the other stuff that Obama is being blamed for. It would be a great waste of time to try an educate you so continue to remain the fool that you are. Eight more years of crying fool…
Posted by: johnnylee | May 5, 2009, 10:32 pm 10:32 pm
Seems like all those bailouts were a good thing….not.
Posted by: Huh | May 5, 2009, 10:40 pm 10:40 pm
Our government taxes the working people and gives the money to the rich. (dooH niboR.)
Now the government tells us they want to raise corporate taxes. That way the big shots have to return part of what they were paid. I think Orwell told us about this.
Posted by: Oonogil | May 5, 2009, 10:46 pm 10:46 pm
…This is still just half of the $800M airport that Congressman Murtha built for himself…
Posted by: Bill | May 5, 2009, 11:27 pm 11:27 pm
Now we all know that the congressional hearings were a joke. These guys have the politicians in their back pockets.
Posted by: Steve | May 6, 2009, 4:27 am 4:27 am
Insurance companies, lawyers, and the medical field are ruining this country. Oh, I forgot politicians.
Posted by: Steve | May 6, 2009, 4:31 am 4:31 am
Johnnylee,
Why don’t you put your pitchfork away and ask the question of your government: where did the AIG bailout money go? Last count was $180B engineered by Geithner.
Posted by: Javier | May 6, 2009, 9:25 am 9:25 am
Bail out = bonuses. This is a big joke when so many of us would just like a job.
Posted by: RS | May 6, 2009, 12:08 pm 12:08 pm
Only the party name and few people have changed in Washington. Otherwise, they’re still in in for themselves.
Posted by: deanbob | May 6, 2009, 2:51 pm 2:51 pm
javier. If you take the time to read the above story carefully, you will see that AIG paid the 454 million in bonuses in 2008. Obama became prez in Jan 2009. In the coming years, Obama will be blamed for lots of stuff that actually occur on his watch but the AIG fiasco did not happen on his watch.
Posted by: johnnylee | May 6, 2009, 3:18 pm 3:18 pm
I dont Think Obama was In office in 2008 He was Campaigning!
Posted by: Angie in Pa | May 6, 2009, 3:24 pm 3:24 pm