- The Washington Times - Monday, April 20, 2009

NEW YORK (AP) - The pension funds of the Service Employees International Union on Monday asked 29 financial services firms including AIG and Citigroup to investigate bonuses paid to top executives since 2005 amid fallout from the credit crisis.

The consortium of funds, known as SEIU Master Trust, wants the firms’ boards of directors to review more than $5 billion in bonuses, stock and options awarded to their companies’ top five executives since 2005. It asked for a determination of whether the awards were based on derivatives and other investments that have lost much of their value during the credit crisis and ongoing recession.

In the letters, the SEIU Master Trust said compensation payments based on false economic metrics may be recovered under law. The group said that it holds the right to take legal action if boards do not fully investigate what role incentives played in executive pay in recent years.

SEIU Master Trust held investments in each of the 29 financial firms. The trust manages funds with more than $1.3 billion in assets.

Among those sent letters was insurer American International Group Inc., which came under sharp criticism in recent months over bonus payments made to employees in its troubled financial products unit. Other major financial firms such as Goldman Sachs Group Inc., Citigroup Inc., American Express Co. and JPMorgan Chase & Co. were also sent letters, SEIU Master Trust said in a statement.

AIG, Goldman Sachs and JPMorgan declined to comment. A spokesperson for American Express was not immediately available to comment.

A Citigroup spokesman said the bank received the letter and the matter will be brought to the attention of the board as part of its regular business.

The SEIU Master Trust is also asking the companies to overhaul executive compensation practices to better align them with corporate performance.

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