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Bailout King AIG Still to Pay Millions In Bonuses

Posted By admin On March 15, 2009 @ 4:12 am In Money Watch | Comments Disabled

David Cho and Brady Dennis
Washington Post [1]
Sunday, March 15, 2009

Insurance giant American International Group will award hundreds of millions of dollars in employee bonuses and retention pay despite a confrontation Wednesday between the chief executive and Treasury Secretary Timothy F. Geithner.

But the company agreed to revise some executive payments after what AIG’s leader, Edward M. Liddy, called a “difficult” conversation.

The bonuses and other payments have been exasperating government officials, who have committed $170 billion to keep the company afloat — far more than has been offered to any other financial firm.

The issue came to a head when Geithner called Liddy and told him the payments were unacceptable and had to be renegotiated, said an administration official who was not authorized to comment on the Geithner conversation.

Bailout King AIG Still to Pay Millions In Bonuses obamadecept 340x169 [2]

In a letter to Geithner yesterday, Liddy agreed to restructure some of the payments. But Liddy said he had “grave concerns” about the impact on the firm’s ability to retain talented staff “if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury.”

Lawyers at both the Treasury Department and AIG have concluded that the firm would risk a lawsuit if it scrapped the retention payments at the AIG Financial Products subsidiary, whose troublesome derivative trading nearly sank AIG. The company promised before the government started bailing out the firm in September that employees would be awarded more than $400 million in retention pay this year and next.

Full article here [1]

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[1] Washington Post : http://www.washingtonpost.com/wp-dyn/content/article/2009/03/14/AR2009031401394.html?hpid=topnews

[2] Image: http://www.prisonplanet.tv/subscribe.html

[3] Rescued bank to pay millions in bonuses: http://www.prisonplanet.com/rescued-bank-to-pay-millions-in-bonuses.html

[4] Workers at GM, Ford to Score Nice Bonuses This Year Read more: Workers at GM, Ford to Score Nice Bonuses This Year: http://www.prisonplanet.com/workers-at-gm-ford-to-score-nice-bonuses-this-year-read-more-workers-at-gm-ford-to-score-nice-bonuses-this-year.html

[5] London G20 meeting rejects plan to cap bankers’ bonuses: http://www.prisonplanet.com/london-g20-meeting-rejects-plan-to-cap-bankers-bonuses.html

[6] Goldmine Sachs: Bank’s bonuses cut to a ‘mere’ £142,000 EACH: http://www.prisonplanet.com/goldmine-sachs-banks-bonuses-cut-to-a-mere-142000-each.html

[7] Royal Bank of Scotland to pay staff £1 billion in bonuses: http://www.prisonplanet.com/royal-bank-of-scotland-to-pay-staff-1-billion-in-bonuses.html

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