Shamed AIG executives return bonus money
Tuesday 24 March 2009
Three-quarters of the AIG top executives who got millions in bonuses despite the company needing billions from the US government to survive have agreed to pay the money back.
Fifteen of the 20 who got the most money made the decision following a storm of criticism and some arm-twisting from New York's attorney general Andrew Cuomo's.
He said in total AIG employees have agreed to return about 50 million dollars of the 165 million dollars in bonuses awarded earlier this month by the troubled insurer.
Mr Cuomo said he still hoped that more AIG employees will return their bonuses. At most he said his office could hope to recoup 80 million dollars of the bonuses - roughly the amount paid out to American employees.
He said he thanked employees who returned the money, adding: I think they are being responsive to the American people."
Mr Cuomo said nine of the 10 people receiving the largest awards agreed to return their bonus. Others refused to return the money, and the remainder are still considering it.
"We are deeply gratified that a vast majority of Financial Products' senior leadership have expressed a willingness to forsake their recent retention payments," said an AIG spokeswoman.
She added that the company was continuing to review the responses of the other employees.
AIG chief executive Edward Liddy told Congress last week that some of the employees were willing to give the money back. But he claimed the company may not be able to attract and retain talented employees if they believe their compensation is subject to adjustment by the Treasury.
The spokeswoman said that a "handful" of senior-level executives have resigned from the financial products division, and that there will probably be more resignations to come.
"We do believe that at this point it's all manageable," she said.
Mr Cuomo said he did not plan to release the names of the employees who have agreed to return the bonuses.
Separately, officials in Connecticut, where AIG's financial products division is based, have taken a court order out against the company to see the contracts and names of employees who received the bonuses.
About 400 employees and future employees in AIG's financial products division received bonuses. Documents provided by AIG to the Treasury Department said the awards ranged from 1,000 dollars to nearly 6.5 million dollars. Seven employees were to receive more than 3 million dollars between them.
The Senate is soon expected to take up its own plan on the tax.
President Barack Obama is virtually certain to use a news conference tonight to continue an effort that began over the weekend: cooling the anti-AIG ferocity, now that it threatens to undermine his efforts to bail out the nation's deeply troubled financial sector.
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