AIG seeks government’s approval for millions more in bonuses
Trying to avoid the public backlash it received during the last round of executive bonuses, American International Group is seeking the government’s approval for a new round of payouts.
The troubled insurer has requested that Kenneth R. Feinberg, who President Barack Obama recently appointed to oversee compensation issues for recipients of large federal bailouts, weigh in on the latest round of bonuses, according to the Washington Post.
In March, AIG set off a fury of criticism from the public and legislators on Capitol Hill when it announced it was awarding $165 million in retention bonuses, much to the surprise of many in Washington, D.C. The move came amidst the federal government’s more than $180 billion investment in keeping AIG solvent for fears of greater impact on the national economy.
In an appearance before a U.S. House subcommittee, AIG CEO Edward Liddy said he found awarding the bonuses “distasteful,” but awarded them per pre-conditioned contracts to be sure the company did not accept “unacceptably high” risk if the insurer failed.
Liddy told legislators he asked executives receiving bonuses in excess of $100,000 to return at least half and asked others to refund 100% of the payments.
New York Attorney General Andrew Cuomo, who sought more information from the insurer on the bonuses as part of an inquiry by his office, later disclosed that around $50 million was returned and that 47% of the bonuses, or $80 million, went to workers living in the U.S.
The latest round of payments coming due next week include $2.4 million in bonuses for nearly 40 high-ranking executives at AIG, according to the Post, which cites administration documents from earlier this year.
Since the new round of bonuses are actually ones delayed from 2008, they don’t fall under Feinberg’s official purview, the report states.


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