NEW YORK — American International Group is set to pay out about $100 million in a fresh round of bonuses to employees of its financial products division, the unit whose risky bets helped sink the company and led to a $180 billion government bailout, according to reports published Tuesday.
AIG agreed to cut the retention bonuses by $20 million but will still hand out $100 million today, The New York Times reported, citing people with knowledge of the negotiations.
The Washington Post, also citing people familiar with the situation, said the retention payments are for employees at the division who agreed to accept 10 percent to 20 percent less than AIG had initially promised two years ago. In return, the money is coming a month ahead of schedule.
“AIG has taxpayers over a barrel,” Sen. Charles Grassley, R-Iowa, said in a statement Tuesday. “The Obama administration has been outmaneuvered. And the closed-door negotiations just add to the skepticism that the taxpayers will ever get the upper hand.”
AIG is due to pay tens of millions of dollars more in March, mostly to former employees who did not agree to concessions, the Post reported.
A message was left with an AIG spokesman seeking comment.
AIG faced intense public and congressional criticism in March when it paid out hundreds of millions of dollars in retention bonuses to employees months after receiving the government bailout. When the credit crisis hit in fall 2008, the Bush administration rescued AIG from the brink of collapse in exchange for an 80 percent stake in the insurer. AIG’s near collapse was due to risky derivatives contracts written by the financial products division. The Associated Press
