In a Washington Post article, AIG has been noted that after being one of the companies to be 'bailed out' by US taxpayers, they sent executives to a luxury spa!
AIG lost more than $5 billion in the last quarter of 2007 because of its risky financial products division.
Yet in March 2008 when the company's compensation committee met to award bonuses, Sullivan urged the committee to ignore those losses, which should have slashed bonuses.
But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of more than $5 million.
The board also approved a new contract for Sullivan that gave him a golden parachute of $15 million.
As for Cassano, the executive in charge of the company's troubled financial products division, he received more than $280 million over the past eight years. Even after he was terminated in February as his investments turned sour, the company allowed him to keep as much as $34 million in unvested bonuses and put him on a $1 million-a-month retainer.
He continues to receive $1 million a month.
As for Cassano, the executive in charge of the company's troubled financial products division, he received more than $280 million over the past eight years. Even after he was terminated in February as his investments turned sour, the company allowed him to keep as much as $34 million in unvested bonuses and put him on a $1 million-a-month retainer.
He continues to receive $1 million a month, Waxman said.
Asked why they didn't fire Cassano, Sullivan said they needed to "retain the 20-year knowledge of the transactions."
"What would he have had to have done for you to fire him?" Waxman said.
Just last week, about 70 of the company's top performers were rewarded with a week-long stay at the luxury St. Regis Resort in Monarch Beach, Calif., where they ran up a tab of $440,000.
At a House committee hearing yesterday, Rep. Henry A. Waxman (D-Calif.) showed a photograph of the resort and reported expenses for AIG personnel including $200,000 for rooms, $150,000 for meals and $23,000 for the spa.
"Less than a week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation," Waxman said in kicking off an angry hearing of the House Committee on Oversight and Government Reform.
"They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," thundered Rep. Elijah E. Cummings (D-Md.).
"We will ask whether any of this makes sense."
Former chief executive Martin J. Sullivan, whose three-year tenure coincided with much of the company's ill-fated risk-taking, is receiving a $5 million performance bonus. Robert B. Willumstad served as chief executive from June until September, and before that was chairman of the board.
"Shame on you, Mr. Sullivan," said Rep. Jackie Speier (D-Calif.), noting that Sullivan was not giving up any of his $5 million performance bonus.
Over and over, the committee members vented outrage at having the federal government bail out the company, referring frequently to their angry constituents.
But neither Sullivan nor Willumstad acknowledged making any mistakes.
The committee members, barely concealing their frustration, seemed stunned by the duo's refusal to find fault with their own performances."Don't you think the management has some responsibility for what went on there?" Rep. John F. Tierney (D-Mass.) said at one point, his voice incredulous.
As if one trip to a luxury spa resort wasn't enough for American International Group (AIG) following its taxpayer-funded bailout, the company had plans to do it all over again.
50 AIG managers were scheduled to do a deluxe retreat at the Ritz-Carlton resort in Half Moon Bay. The company said it was going to host 150 top-producing agents for educational purposes.
The cost of this "educational opportunity?" Ritz Carlton rooms go for $300 to $1,200 a night, plus high costs for meals, drinks, and entertainment. If the earlier trip is any indication, this whole extravaganza could cost the company around $500,000.
Outrage from taxpayers has led management to cancel this outing, and lawmakers are relieved.
