AIG Executives Receive Tens of Millions in Bonuses Amid Taxpayer Bailout

Strategic Insights -

American International Group has awarded its executives tens of millions of dollars in new bonuses despite receiving a massive taxpayer bailout of over $170 billion. The troubled insurance giant has agreed to meet the administration's demands to restrain future payments, but a deadline forced the company to meet its contractual obligations. The Treasury Department has stated that it did not have the authority to block the current payments. AIG declared a historic loss of $61.7 billion for the fourth quarter of last year.

Key Takeaways:

  • AIG is awarding tens of millions of dollars in new bonuses to its executives despite receiving a $170 billion taxpayer bailout.
  • The company has agreed to scale back future bonus payments, but was obligated to meet the current deadline due to contractual obligations.
  • Treasury Secretary Tim Geithner has requested that AIG renegotiate its current bonus structure, calling it "unacceptable" given the billions of dollars in taxpayer support.
  • AIG Chairman Edward Liddy stated that the company's hands are tied due to contractual obligations and the threat of lawsuits.
  • The current bonus structure is considered "distasteful and difficult" for Liddy to recommend, given the company's financial situation.
  • Lawmakers are calling for more stringent regulations on executive compensation and increased oversight of companies receiving taxpayer support.

Statistics:

  • AIG received a taxpayer bailout of over $170 billion.
  • The company declared a $61.7 billion loss for the fourth quarter of last year, the largest corporate loss in history.
  • Tens of millions of dollars will be awarded to AIG executives in new bonuses.
  • The Treasury Department has stated that it did not have the authority to block the current bonus payments.

Sources:

  • The Associated Press, MARTIN CRUTSINGER, THE ASSOCIATED PRESS WASHINGTON (no publication date)
  • The Associated Press, MARTIN CRUTSINGER, THE ASSOCIATED PRESS (no publication date)
  • Administration official (speaking on condition of anonymity)
  • Letter from AIG Chairman Edward Liddy to Treasury Secretary Tim Geithner (dated Saturday, no month or day)
  • Treasury Department (no publication date)