This case is about american international corp, inc. All products and services are written or provided by subsidiaries or affiliates of american international group, inc. Aig is required to make these payments on or before march 15 by the terms of the. That division was at the heart of aigs collapse last fall, which compelled the u. For additional information, please visit our website at. Yacht policy wording this insurance is provided by aig europe limited. Aig to hand out retention bonuses disguised as loans to.
You call it a retention bonus, no, i am not making this up. Aig presentation university of california, berkeley. The fact that aig engaged in this negotiation flies in the face of aigs assertion that it had no choice but to make these lavish multimillion dollar bonus payments. According to the document, the goal is to provide incentives for employees. Implications of the aig bonus imbroglio harvard law school. A retention bonus is a targeted payment or reward outside of an employees regular salary that is offered as an incentive to keep a key employee on the job during a particularly crucial business. This move is making a complete and utter sham of the supposed punitive elements of the rescue. How can you give cash compensation to an executive, yet claim it is not a salary or bonus. Now that most of the public, albeit probably not the actual participants, seem to be past the initial. Compensation controversies at aig essay 2242 words 9 pages. The whole idea of the retention bonus was to have employees who wanted to be there. May 15, 2006 holding that whether guaranteed retention bonus payments were wages was an issue of fact. Aig bonus scandal bernanke and fed signed off propublica. Aig, on the other hand, calls the bonuses in question retention bonuses.
What types of work behaviors did aig intend to encourage through its retention bonus plan. Aig to hand out retention bonuses disguised as loans to 6,000 reps, advisers on the heels of american international group inc. Each of the plaintiffs was a participant in the dcp, and many were also covered. Special incentive plan sip, and the employee retention plan erp and collectively, the plans. Implications of the aig bonus imbroglio new york march 29, 2009 great outrage and indignation have been expressed, from multiple perspectives, in connection with aigs retention bonuses and the congressional response thereto. Aig europe limited is a member of the insurance fraud bureau ifb, a not for profit. What types of work behaviors did aig intended to encourage through its retention bonus plan. An aig spokesperson assured cbs news last december that the retention program does not include anyone in. Aig told employees of its financial products subsidiary on dec. Aig is the marketing name for the worldwide propertycasualty, life and retirement, and general insurance operations of american international group, inc. The president, the congress and the average american on main street are outraged at the top business story of the week which is. A free inside look at aig bonus trends based on 5,730 bonuses wages for 5,730 jobs at aig. Letter to treasury secretary geithner on march 14, 2009, aig ceo ed liddy wrote to treasury secretary tim geithner about a retention program for employees in aig financial products corp. He also said he believed the retention bonuses at the financial products unit were necessary, so that.
The aig employees were asked to stay and safely unwind the. It appears that aig had far more leverage than they now claim. Case study compensation controversies at aig case study. Aigs bonus payments controversy and its decision to adopt. Aig advisor groups retention bonuses will be paid out by its bds, not its parent as details of the aig advisor group inc. Aig released last night fyi american international group inc. In 2009, the leading insurance corporation in the us faced a severe backlash from taxpayers and the media after it became public that the company had made bonus payments. Record retention programs american international group. Types of work behaviors did aig intend to encourage. More than 60% of respondents indicated that bonus programs positively affect employee engagement, motivation and satisfaction. Note that aig chose to make this disclosure the day before thanksgiving, clearly choosing a time when it.
Aig weekly recap history, bonuses, congress and outrage. Read the controversial retention bonuses at aig case below and answer the questions in a word document. These findings are consistent with organizations featuring any bonus. Aig retention and cash awards draw ire, explanations. View recent featured presentations on company performance as well as reports, additional presentations, and webcasts. This amount is due pursuant to a retention plan entered into in early 2008. Over a weekend, word leaked out that aig is paying yet more retention bonuses. Other executives were also reported to be giving back their retention bonuses in the end, almost all of the executives gave back their bonuses. After rescue, bonuses still flow at aig december 11, 2008 7. This fact has some asking, why are bonuses being paid at a company that is being bailedout. The conference call including the financial results presentation material, the earnings release and the financial supplement may include, and officers and representatives of aig. When the media reports on the aig bonus story, it calls them bonuses. A couple days later, jon liebergall, the cohead of the north american marketing for aigs financial products unit, agreed to return the bonus money.
Activation key for pdf to go for blackberry pdf recover pdf password crack introductory econometrics for finance pdf aig retention bonus pdf. Officers that allows aig to recover the payments if the bonuses are based on inaccurate financial results. Through its retention bonus plan aig intended to encourage two types of work behaviors from their employees. Yet more retention bonuses at aig naked capitalism. Security and retention of personal information appropriate legal and security measures are used to protect. Politifact aig retention bonuses going to employees it. Retention bonuses in early december, members of congress knew about aigs retention bonus program that seems to have been effective on sept. But clearly, there was not enough of an adverse reaction to the earlier announcements of retention bonuses to deter the giant insurer. Controversial retention bonuses at aig essay 1430 words. Causes of failure huge bonus payouts after its bailout, aigs payout of retention bonuses, not to mention luxury trips and other perks, has caused aig further failure in the form of a public relations fiasco. Summary of benefits aig deluxe to assist you in selecting the right level of cover, below is a list of some of the benefits provided with your aig deluxe car insurance policy.
Aig bailout, cost, timeline, bonuses, causes, effects why it made bernanke angrier than anything else in the recession. Aig paying retention bonuses to people who left the company. On november 25, aig ceo edward liddy assured the public that the insurer would freeze pay and forgo bonuses for seven top leaders, according to bloomberg. If they gave them a lot of money to make money not a factor in working at aig, then the employees that stayed would be ones that would want to be there. The first and most important work behavior was loyalty to the company.
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