WASHINGTON – American International Group is giving executives in its most troubled business unit tens of millions of dollars in new bonuses even though it received a taxpayer bailout of more than $170 billion dollars. Which means YOU the TAXPAYER are giving out those bonuses.
AIG has said it must pay out the executive bonuses to meet a contractually obligated Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments. How very wonderful of them
An official, who spoke on condition of anonymity because of the sensitivity of the issue, said that Geithner had called AIG Chairman Edward Liddy on Wednesday to demand that Liddy renegotiate AIG's current bonus structure. But what they really should have done was get some American taxpayers on the phone with Liddy.
Geithner termed the current bonus structure unacceptable in view of the billions of dollars of taxpayer support the company is receiving, this official said. I call it treasonous.
The large bulk of the payments at issue cover AIG Financial Products, the unit of the company that sold credit default swaps, the risky contracts that caused massive losses for the insurer.
The company says in the paper it will work to reduce the amounts paid for 2009 and believes it can trim those payments by at least 30 percent. WOW! A whole 30%??
AIG also pledged to Geithner that it would also restructure $9.6 million in bonuses scheduled to go a group that covers the top 50 executives. Liddy and six other executives have agreed to forgo bonuses. 7 out of 50 see their bonuses as a "problem". The humility is overwhelming.
The group of top executives getting bonuses will receive half of the $9.6 million now, with the average payment around $112,000. This group will get another 25 percent on July 14 and the final 25 percent on September 15. How WILL they get by?
"We cannot attract and retain the best and brightest talent to lead and staff the AIG businesses, which are now being operated principally on behalf of the American taxpayers — if employees believe their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury," Liddy said. If those yahoos are the best and the brightest, I think America is willing to take a chance on 2nd best.