Report: AIG to pay millions in bonuses despite gov't pressure

WASHINGTON, March 14 (Chinese media) -- Insurance giant American International

Group, which has received 173 billion U.S.dollars in federal bailout cash, will

still give its senior employees tens of million of dollars in bonuses, The

Washington Post report.

A man stands in front of an AIG logo in

Tokyo March 3, 2009. Japan's Nikkei stock average touched a four-month low

on Tuesday but later pared losses to 1 percent, with banks such as Mizuho

Financial Group down on fear about the U.S. financial system after AIG

posted huge losses. (Chinese media/Reuters. File Photo)
Photo

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In a phone call on Wednesday, U.S. Treasury Secretary Timothy F. Geithner

told AIG Chairman and chief executive Edward M. Liddy that the payments were

unacceptable and needed to be renegotiated, according to the report.

The company has since agreed to change the terms of some of these payments.

But in a letter to Geithner, Liddy wrote that the bonuses could not be

cancelled altogether because the firm would risk a lawsuit for breaching

employment contracts, said the report.

Liddy also expressed concerns about whether changing the bonuses would lead

to an exodus of talented employees who are needed to turn the company around, it

added.

AIG has agreed to restructure the 9.6 million dollars in bonuses it would

have paid to the firm's top 50 officers. AIG's top seven executives, including

Liddy, have already agreed to forgo this payment altogether.