In the winter of 2008, AIG leadership recognized they had a problem. They needed to keep employees at AIG’s Connecticut-based Financial Products division, perhaps to slowly exit parts of the risky derivatives business. And thus was born the “very prompt implementation of a meaningful employee retention plan.”
A total of 418 AIG employees were slated to receive 2008 retention payments, including 53 former employees who took home more than $33 million, according to the documents obtained by a Freedom of Information Act request.
The documents were peppered with threats that were later made against top executives by the public using a comment submission form on the AIG website.
Some are indirect: “If the bonuses don’t stop, it will be very likely that every CEO @ AIG has a bulls-eye on their backs”.
Some are outrageous: “I would really like to put a size 12 boot up the a** of every one of you motherf***ers.”
And some are downright chilling: “I don’t hope that bad things happen to the recipients of those bonuses, I really hope that bad things happen to the children and grandchildren of them! Whatever hurts them the most!!”
An employee or former employee sent an e-mail March 19 to the Financial Products Operating Committee saying:
“Just arrived home to several threats on the [answering] machine. ‘Give your money back or else’, terrible things going to happen, etc. Both private caller numbers. One at 633pm and one at 540pm. Don’t need follow up, please report them, though.”
These were among the 465 pages of AIG materials subpoenaed by Connecticut Attorney General Richard Blumenthal, presumably to demonstrate the company’s concern for its executives appearing at a public hearing. Thursday, AIG’s head of Human Resources is expected to testify before a state legislative committee.
Some of the documents spoke to the reasons behind the payments: that if the company was to leave the derivatives being handled by the unit, it needed to keep the right people in place to do so.
One in March 2008 highlighted the company’s belief that other “financial institutions affected by credit-related and other major write-downs in recent months have adopted” similar plans, including Citigroup, UBS and Lehman Brothers.
Even as the credit market started to crumble, the draft showed the company planned to guarantee most employees that they would be awarded bonuses in 2008 and 2009 that were guaranteed to equal their 2007 award.
And no matter what happened to the company’s books in 2008 and 2009, senior management would take home at least 75 percent of their 2007 award. However, the more profitable the division, the more “upside” for the executives.
“Prudence requires support of retention even if this [is] culturally challenging,” it concluded.