AIG Execs In Europe Resist Returning Bonuses

AIG Execs In Europe Resist Returning Bonuses - 3/26/2009

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AIG Execs In Europe Resist Returning Bonuses
Staff Writer

Reuters. March 26, 2009
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EXCERPT: American International Group Inc. executives in Europe are adamant they should not have to return their controversial bonuses and some feel that pressure on them to do so may amount to blackmail, according to a company employee and internal emails. AIG Financial Products unit head Gerald Pasciucco told a staff meeting for U.K. and Paris employees on Monday that he thought a demand for repayments was to a certain extent "blackmail," said a London-based recipient of one of the retention bonuses from the bailed-out insurer. "The vast majority of people in London have made the decision that the request is pretty offensive," the employee said. "It effectively constitutes blackmail whether it is criminal or not. There is no moral reason to give it back." A company spokesman, however, said AIG had no concerns as to the legality of any repayments. New York Attorney General Andrew Cuomo has pressed AIG and other banks and companies receiving government bailouts on the issue of bonuses, saying those who had returned the money "have risen to the occasion and I applaud them." His office is investigating whether the AIG bonuses were paid fraudulently under New York law. The attorney general of Connecticut, where the Financial Products unit blamed for bringing AIG close to collapse is headquartered, has subpoenaed 14 current and former AIG executives in a probe of compensation and bonus practices. The employee at the meeting said Mr. Pasciucco recommended that bonus recipients strongly consider returning the money but said any decision to do so was an individual choice. The employee asked not to be identified by name because of a lack of authorization to speak publicly about the matter.

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