American International Group Inc., which received $180 billion in U.S. taxpayer money, disclosed that up to 400 employees would be receiving as much as $650 million in bonuses.
The employees, who are part of the financial products unit, wrote the credit default swaps that lead to the downfall of what was the world’s largest insurer. Some $38 billion of the $100 billion in AIG’s losses are attributable to this unit.
AIG has promised retention bonuses totaling more than $1 billion, with nearly half of the sum earmarked for the financial products unit. It says it must pay the bonuses in order to retain the talent.
What follows are some details of the bonus and salary schemes that AIG agreed to pay to the unit’s employees in 2008 and revisions it has agreed to for 2009.
* The retention bonuses were agreed to in early 2008, under former chief executive Martin Sullivan.
* The bonuses range up to almost $6.5 million down to $1,000. Seven employees will receive more than $3 million each.
* The total amount that AIG has promised to pay their financial products employees in retention bonuses is $450 million.
* Retention bonuses for those employees of $230 million have been promised this year, but AIG said it expected to trim that by a third.
* The 25 highest paid AIG financial products employees will see their salary cut to $1 for the remainder of the year.
* Separately, AIG has agreed to pay $619 million in retention bonuses to employees of its insurance operations.
* The company also agreed to pay 2008 incentive compensation of $121.5 million to about 6,400 AIG employees, about 30 percent less than bonuses paid in 2007.
* The top seven AIG executives will forego any bonus in 2008. CEO Liddy’s salary is $1. He was not due a bonus for 2008.
* AIG’s top 47 executives agreed to 2008 salaries that were 56 percent lower than a year earlier.
(Source: AIG company officials, company documents, regulatory filings) (Reporting by Lilla Zuill, editing by Leslie Gevirtz)
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