Most Top AIG Bonus Recipients Have Returned Taxpayer Funds

March 24, 2009 – Most executives receiving bonus pay at embattled and ailing insurance giant American International Group (AIG) have returned their share of the more than $165 million in employee retention payment bonuses after the insurer accepted up to $183 billion in taxpayer-funded federal relief.

Of the top 20 AIG recipients of AIG employee retention payment bonuses, 15 have agreed to return funds totaling about $30 million. New York’s attorney general said his office’s investigation into the retention payments is helping convince some to return the money. Based in New York, AIG is regulated by New York law.

“My office’s investigation of AIG is continuing and we are proceeding with our security assessment for the employees. Through that process, my Office has been working with AIG and its employees in an attempt to assess the status of the $165 million in bonuses that were paid on March 15, 2009, New York Attorney General Andrew Cuomo said. “So far, nine of the top 10 bonus recipients have agreed to give the bonuses back. Of the top 20, 15 have agreed to return the bonuses.”

The bonuses raised a large uproar as taxpayers learned of hundreds of millions of dollars in taxpayer funds being used to compensate executives as failing businesses rescued by the federal government. President Barack Obama recently denied knowing about the bonuses, but Sen. Chris Dodd (D-Conn.) says the President insisted the bonus payments be ensured through enabling legislation. Obama would have vetoed the measure otherwise, according to Dodd.

So far, about $50 million in bonuses allegedly will be returned.

“Of the $165 million pool, we calculate that employees have agreed to return approximately $50 million. It bears noting that 47 percent ($80 million) of the $165 million pool went to Americans,” Cuomo said. “I would like to say this to the individuals who have given the money back – you have done the right thing. You have done what this country now needs and demands. We are living in a new era of corporate and individual responsibility. I thank you for setting an example for the rest of the company.”

Cuomo said AIG paid retention payment bonuses of $1 million or more to 73 employees, including 11 who are no longer employed by the company. AIG officials contend the bonuses are necessary to retain important high-level managers and executives at units being sold or wound down.

A recent CBS News poll indicates 83 percent of Americans think AIG could have avoided paying the employee retention payment bonuses while 42 percent of those polled disapprove of President Obama’s handling of the matter while 41 percent approve.