AIG planning more bonuses
American International Group Inc. is preparing to pay millions of dollars more in bonuses to several dozen of its top executives after an earlier round of payments set off a national furor.
The payments being considered are much smaller than the $165 million in so-called retention bonuses whose disclosure in March angered lawmakers and the public and threatened to undermine the government’s effort to rescue the financial system.
Still, officials at AIG and in the Obama administration see the pending bonuses as a land mine. The insurer has been pressing the government’s new “compensation czar” to bless the payments to shield itself from renewed public outrage.
The company doesn’t actually need the permission of Kenneth Feinberg, whom President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at the troubled insurance giant, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government.
“Any time we write a check to anybody” it is highly scrutinized, one AIG official said. “We would want to feel comfortable that the government is comfortable with what we are doing.”
The payments coming due next week include $2.4 million for about 40 high-ranking AIG corporate executives, according to administration documents from earlier this year. The exact amount may have changed since then.
Feinberg, who managed the government’s efforts to compensate the families of those killed in the Sept. 11 attacks, has the power to determine salaries, bonuses and retirement packages for top executives at firms such as Citigroup Inc., Bank of America Corp., General Motors Corp. and AIG.
But the pending AIG bonuses fall outside his official purview because they were delayed from 2008. The Treasury Department declined to comment on the bonuses. Feinberg didn’t respond to an e-mail seeking comment.
Of the $165 million in bonuses that caused the upheaval in March, employees vowed to return more than $50 million. But that didn’t stop lawmakers from proposing to levy harsh taxes on bailout recipients paying executive bonuses.
Dennis and Cho write for the Washington Post.