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Daily Insurance Industry News
Saturday 21st of October 2017
October 24, 2008

AIG freezes executive bonuses

by David Masters

Story link: AIG freezes executive bonuses

The former chief executive of AIG, Martin Sullivan, is to have his severance payments and bonuses frozen by the company he used to control.

Around £11.7 million in compensation payments to Sullivan will be frozen by the US-government backed company.

Sullivan can take comfort in the fact that he is in good company.

AIG plans to block around $600 million of deferred compensation and bonuses due to be paid to the executives of AIG Financial Products.

AIG Financial Products was the particular business responsible for AIG’s heavy losses that could have sent the group into collapse if the US government had not come to the rescue.

A spokesperson for AIG said the company will not be paying ‘improper funds’ to senior managers until American taxpayers are ‘repaid with interest’ the money loaned by the US government to AIG.

Analysts predict that AIG’s response to executive payouts is likely to be a ‘recurring scenario’ given the anger of taxpayers who are footing the bill to bail out Wall Street traders.

 

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