How come they don't mention the x mas bonuses? These guys already had a nice fat x mas stocking stuffer. Here's some old news to remind you what I've been complaining about since day 1. This is during the 1st bailout. Less than a week after the federal government offered an $85 billion bailout to insurance giant AIG, the company held a week-long retreat for its executives at the luxury St. Regis Resort in Monarch Beach, Calif., running up a tab of $440,000.
The executives spent $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. "We will ask whether any of this makes sense. "
We dare to ask the company's executives about their multimillion-dollar pay packages -- some of which they continue to receive -- as well as who bears responsibility for the company's high-risk investment portfolio, which led to its near collapse.
"They were getting their manicures, their pedicures, massages, their facials while the American people were paying their bills," the executive retreat at the Monarch Resort.
Documents show that as the company's risky investments began to implode, the company altered its generous executive pay plan to pay out regardless of such losses. AIG lost over $5 billion in the last quarter of 2007 due its risky financial products division, Yet in March 2008, when the company's compensation committee met to award bonuses, Chief Executive Martin 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 over $5 million. The board also approved a new compensation contract for Sullivan that gave him a golden parachute of $15 million.
Joseph Cassano, the executive in charge of the company's troubled financial products division, received more than $280 million over the last eight years. Even after he was terminated in February as his investments turned sour, the company allowed him to keep up to $34 million in unvested bonuses and put him on a $1 million-a-month retainer. He continues to receive $1 million a month. To the executives' defense that the troubles in the business had to do with larger economic forces and not their own bad decisions. When a former AIG auditor, Joseph St. Denis, expressed concerns, Cassano told him "I have deliberately excluded you from the valuation ... because I was concerned that you would pollute the process".
St. Denis resigned in protest.
PricewaterhouseCoopers, AIG's auditor, told the company in March 2008 that the "root cause" of AIG's problems was that people assessing risk did not have enough access to the financial products division, where the risky investments originated. Sullivan had deliberately misled investors.
On Dec. 5, 2007, Sullivan expressed confidence to investors. But a week before, PricewaterhouseCoopers warned Sullivan that the company "could have a material weakness relating to these area," committee members said. m