AIG Gets Stern Warning over Executive Bonuses

November 18, 2008 ( - In a letter to American International Group Inc. Chief Executive Officer Michael Liddy, New York Attorney General Andrew Cuomo issued a warning of "significant legal ramifications" over executive bonuses.

“Please inform my office as soon as possible what AIG plans to do with respect to executive bonuses and pay raises this year,” Cuomo wrote to Liddy, according to Reuters. “As you know, I believe AIG’s decision has significant legal ramifications.”

AIG spokesman Joe Norton confirmed with Reuters that Liddy has received the letter, and said the company would respond.

Cuomo is investigating executive pay of firms benefitting from the U.S. Treasury Department’s $700 billion bailout (See Banks Getting Bailout $$ Grilled over Executive Bonuses ).

Reuters said public outrage over lavish banker pay has prompted Goldman Sachs and UBS to announce their executives would not be receiving year-end bonuses. In a statement on Monday Cuomo urged the rest of Wall Street to follow UBS and Goldman Sachs, and also said Citigroup, which is cutting 52,000 jobs, should announce quickly that top executives will not receive bonuses.