While the left and the right condemned reports that AIG will pay $165 million in bonuses after receiving $170 billion in taxpayer bailout funds, it is worthy noting that the Wall Street Journal is now reporting that the number is much higher: $450 million in bonuses.
American International Group Inc. will pay $450 million in bonuses to employees in its financial products unit. That division was at the heart of AIG’s collapse last fall, which compelled the U.S. government to provide $173.3 billion in aid to keep it running.
Chief Executive Edward Liddy told Treasury Secretary Timothy Geithner in a letter dated Saturday that the next payments to employees of the financial products unit — whose woes caused massive losses at the giant insurer — are due on Sunday, and added “quite frankly, AIG’s hands are tied.”
Those payments are in addition to $121.5 million in incentive bonuses for 2008 that AIG will start making this month to about 6,400 of its roughly 116,000 employees. AIG, which was rescued in September as it faced potential bankruptcy, is also making over $600 million in retention payments to over 4,000 employees.
Together, the three programs could result in roughly $1.2 billion in retention and bonus payments to AIG employees.