The Height of Irresponsibility

 

Contrition

 

AIG’s Mouat Says Bonus Rage Unfair, Would Give up His

 

Return Every Red Cent or

 

Resign or Go Commit Suicide

 
 

American International Group Inc.’s president for Southeast Asia, Leslie Mouat, said the “abuse” against the insurer’s employees amid furor over bonus payments is “unfair,” and he would give up his own payout if asked.

 

New York-based AIG, which received a $173 billion federal bailout, sparked an outcry by paying $165 million in bonuses this month to employees of the financial products unit that almost bankrupted the company.

 

The U.S. House responded to public outrage last week by voting to impose a 90 percent tax on employee bonuses at AIG and other companies that get at least $5 billion in taxpayer bailout funds. AIG said it lost a total of $61.7 billion in the fourth quarter, a record for any U.S. corporation.

 

Mouat, based in Singapore, said while he is “angry” with the bonus payments, those in the financial products unit represent just “400 of 120,000” people that AIG employs and that the “problem is isolated to one small place.”

 

Still, the firm receives “15,000 e-mails a day of hate mail on the AIG Web site,” he said.

 

Senator Charles Grassley, an Iowa Republican, said he wants “contrition” from company executives after previously telling Cedar Rapids, Iowa, radio station WMT they should “resign or go commit suicide.”

 

“Because I’m scared to death of being photographed with my staff with a beer in my hand at Christmas or Chinese New Year, we canceled every party; I’ve canceled every agent event,” he said.

 

“I wouldn’t wish this situation on my worst enemy,” Mouat said. “This is beyond character building; this is the hardest thing we’ve ever had to do. But I can assure we will come through.”

 

American International Assurance Co., which includes most of AIG’s life business in Asia, plans an initial public offering, part of Liddy’s plan to repay taxpayers.


ING Groep NV, the first Dutch bank to tap a government rescue package, asked 1,200 workers including its 200 “top employees” to return last year’s bonuses, joining rivals including UBS AG in cutting pay to assuage taxpayer criticism.

 

The Amsterdam-based bank also deferred 2009 variable cash compensation for all workers until a new policy is established next year, it said in a message to employees and obtained by Bloomberg News today.

 

“Given the continuing public scrutiny of variable pay practices in our industry, ING is moving to align its variable compensation practices with the new reality,” it said.

 

Banks are calling on executives to forfeit bonuses amid growing public criticism. Societe Generale SA, France’s third- largest bank, said yesterday senior executives would return their stock options in response to public “indignation,” while UBS reduced bonuses after a $59.2 billion lifeline from the Swiss government. New York-based American International Group Inc., which received a $173 billion federal bailout, sparked an outcry by paying $165 million in bonuses this month. President Barack Obama has called the payments “the height of irresponsibility.”

 

ING, which received a 10 billion-euro lifeline in October and is transferring the risk on most Alt-A mortgage assets to the government, paid 300 million euros in bonuses for 2008.

 

“In this environment, we must show how seriously we take this matter,” Jan Hommen, chief executive officer designate, said in the message. “Most important, we must put this issue behind us so we can focus on what matters most, our customers and how we take the company forward.”

 

ING rose 18 percent to 5.11 euros as of 12:19 p.m. in Amsterdam, paring its decline this year to 30 percent. That values the financial-services company at 10.5 billion euros.

 

The Dutch newspaper De Volkskrant today reported ING asked its top 1,200 employees to return their 2008 bonuses.

 

The bank said earlier this month that the 2008 bonus total had been cut by more than half, joining rivals such as Morgan Stanley and Deutsche Bank AG that are reducing payments to employees after the banking industry racked up more than $1 trillion of losses and writedowns.

 

ING employees at all levels of the company have offered to forgo variable cash compensation for 2008. “Given the response from employees, I have asked my top 200 leaders and their direct reports to consider whether they accept their 2008 cash pay,” Hommen’s message to staff said.

 

‘Strictly Voluntary’

 

“This is strictly voluntary, targeting the senior levels of the organization,” Hommen said.

 

ING spokesman Nanne Bos declined to comment on how much in variable cash compensation the 200 management council members and their 1,000 team members received last year.

 

Dutch Finance Minister Wouter Bos will investigate whether he can block 2009 bonuses at financial companies receiving government aid, he said in a letter sent to parliament today.

 

ING, created in the 1991 merger of Nationale-Nederlanden and NMB Postbank Group, is cutting 7,000 jobs to reduce operating costs by 1 billion euros this year and is reviewing which divisions it may sell in the coming months. The company posted a fourth-quarter loss of 3.71 billion euros last month.

 
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