American International Group Inc., which accepted $182.3 billion in U.S. aid, is expected to pay out another round of employee bonuses worth about $100 million.
AIG [AIG] is reportedly moving forward with a plan to accelerate bonuses to employees of its financial products division after they agreed to a $20 million reduction in $195 million of previously promised awards. As reported in American Banker, The Wall Street Journal said some lawmakers took issue with the move, which could result in $100 million of payouts.
Sen. Charles Grassley of Iowa, the top Republican on the Senate Finance Committee, who said AIG ''outmaneuvered'' the Obama administration, and now has taxpayers ''over a barrel.''
Obama administration’s pay czar, Kenneth Feinberg, denied the claim that the firm was trying to outmaneuver the Obama administration.
"These AIG bonuses were signed into law years ago,” Feinberg reportedly said. “What I'm trying to do now is maximize whatever leverage we have to get as much of that money back and—to use Senator Grassley's word—to maneuver AIG to pay back what it said it would pay back.''
In other news, in a letter to The Wall Street Journal editor, Therese Vaughan, CEO of the National Association of Insurance Commissioners, took issue with the Journal's Jan. 28 editorial, "The Latest AIG Story," questioning the insurance regulator's ability to protect AIG policyholders. And an op-ed by Eric Dinallo, former superintendent of insurance for New York State, professor at New York University's Stern School of Business and a candidate for New York State attorney general, looked at some of the lessons learned from the bailout of the insurer.
Meanwhile, AIG was "working hard to try and reduce the size of these bonuses'' while moving to repay $45 million in previous bonus payments, added Feinberg.
"It ends this March with the last of these retention payments. These are the old grandfathered payments,'' Feinberg told ABC's "Good Morning America'' program. ''Another month or so, these old, guaranteed bonuses will be a thing of the past.''