WORLD> America
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WORLD> America
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AIG chairman inherits retention bonus mess
(Agencies)
Updated: 2009-03-18 21:18 Geithner said he was working with the Justice Department to find ways to recover some of the payments. He cited a provision in the recent economic stimulus law that gave him authority to review compensation to the most highly paid employees of companies that already have received federal assistance.
As talk of Geithner's possible resignation swirled around Washington, White House officials were obliged to say that he still retained the president's full confidence. Overall, AIG has paid $220 million in retention awards to its financial products employees; it distributed $55 million in December and $165 million had to be paid by Friday. Documents provided by AIG to the Treasury Department said the awards ranged from $1,000 to nearly $6.5 million. Seven employees were to receive more than $3 million. New York Attorney General Andrew Cuomo said AIG last week paid bonuses of $1 million or more to 73 employees, including 11 who no longer work there. But even as the White House continued to label the payments outrageous, Geithner noted that Liddy, the former CEO of Allstate Corp., took the helm of AIG at the government's request. "He inherited a difficult situation, including these ... retention contracts, which were entered prior to his or the government's involvement in AIG," Geithner wrote in a letter to congressional leaders Tuesday. In his own letter to Geithner on Saturday, Liddy wrote that if it had been up to him, he would have designed the retention payments differently and at lower levels. But, he said, his hands were tied. "Honoring contractual commitments is at the heart of what we do in the insurance business," he said.
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