AIG to give back bonuses worth $50 mn

Top executives of struggling insurance giant American International Group have agreed to return $50 million taken as bonus as the company faces sharp criticism from taxpayers and federal officials on these payments.

"We have been working our way down the list beginning with the recipients who received the largest bonuses. So far, 9 of the top 10 bonus recipients have agreed to give the bonuses back," New York Attorney General Andrew Cumo said.

Cumo further added that "of the top 20 (bonus recipients), 15 have agreed to return the bonuses and of the $165 million pool, we calculate that employees have agreed to return approximately $50 million".

The US insurance giant paid a whopping $165 million as bonus to its executives even as the Federal government had pumped in about $170 billion into the company.

Satisfied with this move by AIG bosses, Cumo said, "I would like to say this to the individuals who have given the money back -- You have done the right thing. You have done what this country now needs and demands.

"We are living in a new era of corporate and individual responsibility. I thank you for setting an example for the rest of the company."

The bonus payment by AIG had drawn flak from the White House for using the government's bailout funds to pay bonuses to its top executives, with President Barack Obama vowing to pursue a legal avenue to block these payments.

Earlier last week, the troubled insurance giant's Chairman and Chief Executive Edward Liddy had asked its employees to return at least half the bonuses paid to them recently, after facing sharp criticism from taxpayers and federal officials against the payments.

"We will work to ensure the highest level of employee participation in this effort in the days ahead. And we will keep Congress and the American people informed of our progress," Liddy had said.

Cumo further said the investigation of AIG is continuing and the office of the Attorney General is proceeding with "our security assessment" for the employees. "Our investigation and security assessment continues," he added.

The controversy has led to the US House of Representatives passing legislation on levying tax on bonuses paid to employees of companies that have received at least $5 billion from the US Federal government's financial bailout packages.

The legislation would impose a new 90 per cent tax on bonuses received by employees who earned more than $250,000.