Troubled insurance giant– hey, let's see if we can't find a better intro. Totally hosed insurance failure (there we go!) AIG has received over $152 billion in rescue money from the federal government, so elected officials are keeping close tabs on the company's spending habits as it tries to get back on its feet.
American International Group Inc., the insurer whose bonuses and perks are under fire from U.S. lawmakers, offered cash awards to another 38 executives in a retention program with payments of as much as $4 million.
The incentives range from $92,500 to $4 million for employees earning salaries between $160,000 and $1 million, Chief Executive Officer Edward Liddy said in a letter dated Dec. 5 to Representative Elijah Cummings. The New York-based insurer had previously disclosed that 130 managers would get the awards and that one executive would get $3 million.
Whoa, whoa, hold your fire, lawmakers. These payouts are part of a "retention program," not bonus packages and perks. It says so right there. AIG wouldn't be scraping together money for a "retention program" if a "retention program" weren't important.
AIG disclosed the initial list of 130 managers in a September filing without saying how much most of the recipients will get. Another 38 people were added "subsequently," according to Liddy's letter, which didn't disclose the new recipients or say when they had been added.
The list was expanded so AIG can retain people with "key client relationships" and who have a high "degree of flight risk," Liddy wrote. He cited their "deep experience, extremely valuable business relationships, and unique ties to the many local communities where they live and work."
Well, that makes sense. It would be a terrible shame to lose the managers who have done such a fantastic job running AIG thus far, especially when the company risks losing them to rival firms.
Or South America.
Tags: AIG, Economy