American International Group (AIG) is preparing to pay again millions of dollars more in bonuses to several dozen top corporate executives, The Washington Post reported on Thursday. Although the payments are much smaller than those that caused the upheaval in March, the idea of AIG’s execs pretending additional compensation on the basis of proven incompetence is not only mind-boggling but also shows just how out of touch some financial firms still are.
The troubled insurance giant has been pressing the federal government to bless the payments in hopes of shielding itself from renewed public outrage.
The request puts the administration’s new compensation czar [Kenneth Feinberg]on the spot by seeking his opinion about bonuses that were promised long before he took his post.
AIG doesn’t actually need the permission of Kenneth R. Feinberg, who President Obama appointed last month to oversee the compensation of top executives at seven firms that have received large federal bailouts. But officials at AIG, whose federal rescue package stands at $180 billion, have been reluctant to move forward without political cover from the government.
“Anytime we write a check to anybody” it is highly scrutinized, said an AIG official, who declined to speak on the record because the negotiations with Feinberg are ongoing. “We would want to feel comfortable that the government is comfortable with what we are doing.”
AIG’s upcoming payments, which are due next week and include $2.4 million in bonuses for about 40 high-ranking execs, do not fall under Feinberg’s official purview because they involve bonuses delayed from 2008, the article said.
As a result, some Treasury officials believe they are under no obligation to offer an advisory opinion in this case, the Post said, citing a person familiar with the talks.