AIG, the insurance group that took flak for going ahead with an expensive junket after receiving bailout funds, is now prepping a payout of millions of dollars in executive bonuses, which are due to be paid on July 15th.
According to undisclosed sources, AIG, the American International Group, has been in conferences with Kenneth Feinberg (known informally as the compensation czar) in order to avoid the furor that happened last year, when they paid $165 million in retention bonuses to employees of the financial division that was largely responsible for the company’s $99 billion in losses.
In order for the payout to happen, AIG must convince Feinberg, who was appointed last month to oversee the top executive compensation at seven different firms that have received bailout funds, that the right balance, “to discourage excessive risk taking and reward performance for their top executives” has been struck. This is according to a statement from Treasury spokesman Andrew Williams.
went on to say, “That process is just beginning now, and Feinberg has begun consulting with those firms about their compensation plans.” He added that the Treasury, “provide a running commentary on that process.”
AIG has received over $80 billion in federal loans and a total of as much as $180 billion in taxpayer aid since nearly collapsing last September. They declined to comment on the planned payouts.
The bonuses in question were previously disclosed, and include awards of roughly $9 million dispersed among 40 managers, based on performance records, with payments scheduled to be staggered throughout this year, and contingent on certain restructure-related targets.
Currently, AIG is in the process of reducing liability at its financial products unit, and is also selling and/or spinning off some of its insurance operations in order to repay taxpayers. Their total promised retention bonuses, as of last year, was $1 billion, which included payments to the financial products employees. Some of the executives in that division agreed to return all or part of their bonuses after the payments garnered national attention.