AIG Goes To Uncle Sam For Blessing On Exec Bonuses
The saga regarding bonuses, er, I mean, retention payments, with AIG continues. From the Washington Post’s David Cho and Brady Dennis tonight:
American International Group is preparing to pay millions of dollars more in bonuses to several dozen top corporate executives after an earlier round of payments four months ago set off a national furor.
The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage.
The request puts the administration’s new compensation czar on the spot by seeking his opinion about bonuses that were promised long before he took his post.
AIG doesn’t actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at AIG, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government.
“Anytime we write a check to anybody” it is highly scrutinized, said an AIG official, who declined to speak on the record because the negotiations with Feinberg are ongoing. “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 in bonuses for about 40 high-ranking executives at AIG, according to administration documents from earlier this year. Though the actual sum may have changed since then, the payments are much smaller than those that caused the upheaval in March.
I’ll bet some readers are thinking about what Senator Charles Grassley (R-Iowa) said back on March 16 in an interview with an Iowa radio station:
“I would suggest the first thing that would make me feel a little better toward them [AIG executives] is if they follow the Japanese example and come before the American people and take that deep bow and say, ‘I am sorry,’ and then either do one of two things: resign or go commit suicide… and in the case of the Japanese, they usually commit suicide.”
Source:
“AIG Seeks Clearance For More Bonuses”
David Cho, Brady Dennis
Washington Post, July 9, 2009
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