Executives at American International Group Inc. (AIG) were obviously raked with guilt after running their business into the ground, ruining the lives of thousands of employees, and requiring taxpayers to assume the debt of their poor decisions. They were who distraught, days after the bailout, that they spent $440,000 on a posh California retreat for spas and relaxation. This weekend frolic is the equivalent to the average household annual salary for roughly 20 citizens who will be footing their bill on debt.
The median income per household member in 2006 was $26,036. Yet, the AIG executive felt no shame in taking in a shvitz and a spa at their expense at the pricey St. Regis resort in California. Robert Willumstad, former CEO of AIG, testified before the U.S. House on Tuesday. The executives blamed one another for the disaster.
This included $150,000 for meals, $23,000 bill for massages and other spa services, and $14,000 for hair salon and manicure services. One certainly would not want to pick up a bailout check with last week’s nails. Of course, the executives spent the average for a citizen’s one year salary on their nails — that must make the oft-mentioned “Joe-six-pack” feel just great.
I suppose that one should not be surprised with how stupid executives must be to go to a spa days after a federal rescue when they showed the same lack of judgment in their investments.
For the full story, click here.
12 thoughts on “Shvitz, Spa, and a Bailout: AIG Officials Treat Themselves to a Resort Celebration After Bailout”
“Oct. 22 (Bloomberg) — American International Group Inc. agreed to freeze $19 million due to its former chief and $600 million in compensation for other executives amid criticism of such payments in light of the collapsed insurer’s U.S. bailout.
New York Attorney General Andrew Cuomo announced today that AIG will withhold severance and bonus payments from former Chief Executive Officer Martin Sullivan and will not distribute funds from the $600 million deferred compensation and bonus pools of AIG’s Financial
And more hearings today, including Alan Greenspan, btw…
This is a start. They are officially on notice. Getting the execs to
give up the contract bonuses without a scuffle might be a little trickier, unless, as it has been suggested, the argument is made they legally are not entitled to them in the first place, when you look at shareholder interests versus withheld information – not to mention colassall mismanagement and resulting losses.
from CNN Money
Lawmaker Calls For AIG To Reimburse Fed For Spa Stay
October 09, 2008: 01:38 PM EST
“… The House Government Oversight Committee flagged the event at a hearing Tuesday, issuing copies of invoices showing AIG shelled out more than $23,000 on spa treatments and nearly $150,000 on banquets at the resort.
Kanjorski, who chairs the House capital markets subcommittee, also called for Fed to take swift action to crack down on excessive pay or golden parachutes for AIG’s top executives, and to force AIG executives to return bonuses they should not have received.
The Pennsylvania Democrat told the Fed chairman that it’s “simply appalling” that AIG is continuing to spend lavishly after obtaining an $85 billion loan from the Fed to keep the firm afloat. The Fed agreed to provide an additional $ 37.8 billion credit line to AIG and its subsidiaries on Wednesday, putting the U.S. on the hook for up to $122.8 billion, Kanjorski noted.
Given that it is relying on federal funds, “AIG must cut back on its extravagant junkets to ocean-side hangouts, desert spas, mountain ski resorts, gambling casinos and exclusive golf courses,” Kanjorski wrote.
Officials at AIG and the Federal Reserve weren’t immediately available to comment. AIG spokesman Joseph Norton said earlier this week that the California trip was a “recognition event” for independent insurance agents and their spouses, along with 10 AIG employees.”
This is hilarious! If it’s for real people might want to contact Joe to let him know how you feel about AIG’s fabulous move.
Director, Public Relations
American International Group, Inc. (AIG)
70 Pine Street
New York, NY 10270
Earlier today, AIG announced an important policy change – one that we wanted to be sure you knew about.
A short time ago, our Chairman and CEO Ed Liddy said that he has ordered the immediate cancellation of all outside meetings, conferences, and recognition events across AIG, except those that are required by law or that are deemed absolutely critical to sustain our ongoing business needs.
Given AIG’s commitment to our customers, business partners, regulators, and American taxpayers, coupled with the new and very different challenges our company now faces, we take these responsibilities extremely seriously. Their trust is critical to our success. We recognize the need to be sensitive about all company expenditures.
As we move forward, we will continue our focus our efforts to pay back the $85 billion loan from the Federal Reserve Bank of New York as quickly as possible.
Supermax is too good for these thieves. RC, you were right to be concerned when you realized how much money the Health Care industry is throwing around while care goes down and people are being turned down for legitimate health care procedures.
This is nothing that 10 years in a supermax wouldn’t correct.
Show some compassion, RC – it’s exhausting work denying claims for examination and treatment of medical conditions you know little or nothing about all day long. First, you have to collect all that premium money and THEN come up with ingenious ways to hang on to it.
Same kind of dilemma at AIG.
It’s very stressful.
“…but I saw something a few months that really bothered me…” etc.
That is because, my friend, you have a soul.
Goldman Sachs (sacks) owned around 20 billion of AIG assests. Nothing to see here people, move along! Yesterday one woman was speaking about health care in the US. She pointed out that we have yet to devise a system to cover everyone in the US, yet in less than two weeks we were able to give the richest people of our economy 700 billion dollars. She remarked that we socialized private debt in record time while simultaneously refusing to “socialize” our medicine.
Gretchen Morgenson of the NYT said we ought to “claw back” the money from these executives. I couldn’t agree more. We the people own the debt, we own an insurance company and some banks. If we own it we should say what is done with the money. We should demand mortagage renegoiation, health insurance for all and a “claw back” of executive ill gotten gains.
I know it’s not illegal or even much on the radar screen, but I saw something a few months that really bothered me and this story reminded me of it. I was walking on the boradwalk along the beach behind the Hotel del Coronado. Staff members were setting up an area on the beach for what would obviously be a party for some hotel guests/conventioneers. What struck me was the name of the group staying at the del paying their incredibly high summer season rates.
The beach party was for a healthcare insurance company having their annual convention. When millions of Americans are without insurance and conservatives spew that the government wastes money, I was witnessing company executives and management spending their clients’ premium at one of the most posh hotel/resorts in America. With private companies spending 16%-20% of revenues for salaries, bonuses, annual sojourns, advertising, dividends, etc., a government run program for healthcare, by comparison (Social Security, Medicare and the VA spend about 3% of revenues for administrative expenses), is a bargain.
As the French once said, “Off with their heads!”
Juat some more Republicans stealing from the public! I heard about this last night. It even made the debates. What were these people thinking? I think they believe that they are “entitled” to this kind of treatment. I sure hope all of these people lose their jobs over this brainy idea. This is a prime example of what happened to the markets. The Bush regime failed to regulate and the rest of us have to pay for it.
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