Workers who crippled company to get ‘unmerited’ $450m
AIG is paying 400 workers at its New York-based financial products unit – the unit that brought about the company’s collapse - $450m (£316m) in bonuses, Bloomberg reports.
That is in addition to about $619m in retention pay going to top executives and employees at subsidiaries including life insurance.
AIG is said to have committed more than $1bn to employees to keep them from leaving the company.
Representative Elijah Cummings, a member of the House Committee on Oversight and Government Reform, in an e-mail: “I was extremely disappointed - but not surprised - to learn that AIG will be awarding bonuses to the very division that drove the company into the ground.”
He said AIG shouldn’t be awarding “millions of unmerited dollars to employees while at the same time begging the U.S. government for financial life support.”
Chief executive officer Edward Liddy has been providing data on employee compensation to Congress, saying retention programs are needed to keep the value of the units from eroding as AIG seeks buyers. The payments have drawn criticism from legislators including Cummings, the Maryland Democrat who has said that the awards are unnecessary while employment markets are weak and has called for hearings into the compensation.
“We adopted and disclosed this contractual retention program months before the government provided support to AIG,” said Christina Pretto, a spokeswoman for the insurer. “It was clear, given the market environment, that we would need to retain employees to manage the complex issues arising in our financial- products business, which we are now unwinding.”
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