Nov. 18 (Bloomberg) -- New York Attorney General Andrew Cuomo demanded to know if American International Group Inc. will give bonuses or pay raises, a day after Goldman Sachs Group Inc. said it is scrapping 2008 awards for top executives.
AIG, which got an expanded government rescue worth more than $150 billion last week, should be ``completely transparent'' on executive pay, Cuomo said in a letter dated today. He said AIG's decisions on the matter had ``significant legal ramifications.''
It ``seems hard to imagine that AIG could pay significant bonuses or give raises to its executives after the company has quite literally been bailed out by the American taxpayer,'' Cuomo said in the letter.
AIG, once the world's largest insurer, has been under scrutiny from lawmakers and regulators as the $85 billion bailout it got in September almost doubled. The New York-based firm has agreed to halt severance payments to executives including former Chief Executive Officer Martin Sullivan and canceled most of its planned conferences.
Goldman became the first U.S. bank to forgo bonuses for top executives after the government passed a $700 billion rescue plan for the industry. Cuomo lauded Goldman and urged AIG to follow, saying today that top executives should take their ``fair share'' of economic hardship. The U.S. committed $10 billion to Goldman.
AIG received Cuomo's letter and will respond to the request for information, said Nicholas Ashooh, a spokesman for the insurer. The company hasn't paid CEO Edward Liddy a salary since he was appointed by the government in September, Ashooh said in an interview.
`Thankless and Payless'
``Mr. Liddy's compensation has not yet been determined by the board, and to date he's been working without compensation,'' said Ashooh in an interview today. ``You could say it's been both thankless and payless so far.'' Ashooh said he didn't know when the board would set Liddy's pay.
Liddy, former CEO of Allstate Corp., last week won lower rates and a longer duration for the U.S. loan that spared AIG from bankruptcy.
AIG agreed with Cuomo last month to freeze $19 million in compensation owed to Sullivan, who was ousted in June after record losses tied to the subprime mortgage market collapse. The insurer also withheld a $10 million severance payment to ex-Chief Financial Officer Steven Bensinger and $600 million in compensation to employees in a financial products unit that caused much of AIG's losses.
Bad Trips
Representative Elijah Cummings called for Liddy, 62, to resign last week after news of a conference at a Phoenix resort surfaced. AIG was rebuked by lawmakers in Oct. 7 hearings for a $440,000 conference held at a California resort in September just days after the company's original $85 billion bailout.
Liddy's predecessor, Robert Willumstad, rejected a $22 million severance package after leaving AIG in September. Willumstad, 63, had to step down as one of the conditions for AIG to receive government help.
AIG has posted about $43 billion in four straight quarterly losses tied to home mortgages. Liddy's plan to repay the original $85 billion loan by selling units stalled as plunging financial markets hobbled potential buyers, prompting the expanded bailout.
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