AIG spokesman lied in blog posts

[ProSense]

AIG Lied To This Site

by The Bagof Health and Politics

Peter Tulupman, an AIG Press flak, came to this site in December and January. He was trying to build good will towards a failed firm. He was trying to distract us from the fact that his bosses were cashing in bailout welfare checks to pay for their lavish lifestyles. He repeatedly claimed that AIG Executives were receiving no compensation or bonuses. Today, we found out he lied.

On January 13th, Tulupman claimed that AIG had an understanding of issues surrounding executive compensation. Tulupman also said that AIG would be careful to limit executive compensation as long as it was on the public dime. According to the January version of Tulupman, paying back the government--and not executive bonuses--was AIG's priority:

"We fully understand the concerns surrounding executive compensation, which have been capped at the highest levels of AIG. Our new Chairman and CEO, Edward Liddy, will receive an annual base salary of $1 for 2008 and 2009. He will not receive a bonus in those years. Also, AIG’s top seven officers will not receive annual bonuses for 2008 performance or salary increases through 2009, and AIG’s top 60 managers will not receive salary increases through 2009...

no 2008 annual bonuses and no salary increases through 2009 for AIG’s top-seven-officer Leadership Group; and no salary increases through 2009 for the 50 next-highest executives, in addition to other bonus, severance and retention award restrictions."

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Excerpts from Tulupman's diary AIG Speaks (part 2):

First, here are the facts regarding AIG’s compensation practices, and more specifically, the importance to the American taxpayer of retaining talented people in AIG’s businesses. We fully understand the concerns surrounding executive compensation, which have been capped at the highest levels of AIG. Our new Chairman and CEO, Edward Liddy, will receive an annual base salary of $1 for 2008 and 2009. He will not receive a bonus in those years. Also, AIG’s top seven officers will not receive annual bonuses for 2008 performance or salary increases through 2009, and AIG’s top 60 managers will not receive salary increases through 2009.

At the same time, our plan to pay back taxpayers is predicated on the divestiture of our assets to strong, competent buyers. To do that, AIG must preserve the value of its businesses, which is based on the people who work for us and, in particular, the strong and experienced leadership of key business units. Talented management is important both to the lines of business that will remain part of AIG going forward, and attractive to prospective buyers in any asset sales.

That is where the retention comes in – trying to keep your key players who have the best business relationships and the best specialized knowledge about the business in place. This applies to the property/casualty businesses AIG plans to keep and helps AIG get the best value for other businesses AIG is selling to pay back the government. For AIG to compete moving forward and to get best value for these businesses, AIG needs people to stay. If you're selling the Cleveland Cavaliers, the team would be worth a lot more with Lebron James than without him.

But even with retention, compensation is down. Including retention payments, compensation for our top five officers was down 60 percent in 2008 vs. 2007. For our top 60 officers, compensation was down 40 percent in 2008 vs. 2007, including retention. So this is a small investment on our part to repay taxpayers.

Irony: If they're capable of taking those measures, why can't they stop bonuses?

Edited to add: Peter Tulupman, AIG Public Relations Manager