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| AIG to pay $165 mn in bonuses: report |
| Press Trust of India / New York Mar 15, 2009, 17:24 IST |
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The American International Group (AIG) plans to pay about $165 million in bonuses even though the troubled insurance giant received a taxpayer bailout of over $170 billion, says a media report.
"The American International Group, which has received more than $170 billion in taxpayer bailout money from the Treasury and Federal Reserve, plans to pay about $165 million in bonuses by Sunday to executives in the same business unit that brought the company to the brink of collapse last year," the New York Times said.
The report said that "the bonuses will go forward because lawyers said the firm was contractually obligated to pay them".
The payments to AIG's financial products unit are in addition to $121 million in previously scheduled bonuses for the company's senior executives and 6,400 employees.
Treasury Secretary Timothy F Geithner last week pressured AIG to cut the $9.6 million going to the top 50 executives in half and tie the rest to performance.
AIG, however, defended the bonus payments and said that these bonuses were promised last year before the crisis and cannot be legally cancelled.
NYT cited Edward M Liddy, the government-appointed chairman of AIG saying that at least some bonuses were needed to keep the most skilled executives.
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