WASHINGTON — The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year. Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them. The payments to A.I.G.’s financial products unit are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation. Mr. Geithner last week pressured A.I.G. to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance. The payment of so much money at a company at the heart of the financial collapse that sent the broader economy into a tailspin almost certainly will fuel a popular backlash against the government’s efforts to prop up Wall […]
Sunday, March 15th, 2009
A.I.G. Planning $165 Million in Bonuses After Huge Bailout
Author: EDMUND L. ANDREWS and PETER BAKER
Source: The New York Times
Publication Date: 15-Mar-09
Link: A.I.G. Planning $165 Million in Bonuses After Huge Bailout
Source: The New York Times
Publication Date: 15-Mar-09
Link: A.I.G. Planning $165 Million in Bonuses After Huge Bailout
Stephan: The rationale for these bonuses is nonsense. If the company had failed there would be no bonuses. Its existence is entirely dependent on the largesse of the American taxpayer. The only good thing about this absurd story is this: '...the administration plans to force A.I.G. to eventually repay taxpayers the $220 million cost of the financial products division bonuses as part of the government's agreement with the firm, which is being restructured.'