NEW YORK—American International Group, the insurer that is 80 percent owned by U.S. taxpayers, reportedly distributed $100 million in bonuses to top employees on Wednesday.
Several people familiar with the matter told the Washington Post this week that the company went ahead with the payments—despite public anger surfacing regarding payments to the employees of the very AIG subsidiary that was directly responsible for the firm’s near-collapse.
This week’s payments, dubbed a “retention bonus,” was given to staff at AIG Financial Products who agreed to accept 10 to 20 percent less than what was agreed upon years ago in exchange for early payment of their bonus money.
“We are greatly appreciative that virtually all, some 97 percent, of active FP employees have volunteered to reduce their upcoming 2010 payment,” AIG said in a statement. “We have decided to begin these reduced payments to those active employees as well as those nonactive employees who agreed to reductions.”
AIG is still on the hook for $200 million in additional bonuses next month, although the company is working to iron out a compromise with its employees at Financial Products.
Last year’s bonuses—totally $168 million—caused uproar in Washington as angry lawmakers chided executives of the company for rewarding reckless behavior.
Financial Products, based in Connecticut and London, is the AIG subsidiary responsible for underwriting risky derivatives called credit default swaps, which directly led to AIG’s near-demise in September 2008.
Several people familiar with the matter told the Washington Post this week that the company went ahead with the payments—despite public anger surfacing regarding payments to the employees of the very AIG subsidiary that was directly responsible for the firm’s near-collapse.
This week’s payments, dubbed a “retention bonus,” was given to staff at AIG Financial Products who agreed to accept 10 to 20 percent less than what was agreed upon years ago in exchange for early payment of their bonus money.
“We are greatly appreciative that virtually all, some 97 percent, of active FP employees have volunteered to reduce their upcoming 2010 payment,” AIG said in a statement. “We have decided to begin these reduced payments to those active employees as well as those nonactive employees who agreed to reductions.”
AIG is still on the hook for $200 million in additional bonuses next month, although the company is working to iron out a compromise with its employees at Financial Products.
Last year’s bonuses—totally $168 million—caused uproar in Washington as angry lawmakers chided executives of the company for rewarding reckless behavior.
Financial Products, based in Connecticut and London, is the AIG subsidiary responsible for underwriting risky derivatives called credit default swaps, which directly led to AIG’s near-demise in September 2008.
