In the coming week, AIG (AIG) plans to make more bonus payments.
AIG plans to make $2.4 million in bonus payments to 43 employees. This would approximate $56,000 per person. On a historic basis, however, these are relatively negligible given the much higher bonus payout amounts from this company in the past.
Lawyers for AIG executives stated that the company would be breaking the law if the bonus are not paid, based on various standing contracts.
Kenneth Feinberg is examining the bonus process for the Obama Administration. Asking for the administration’s approval was definitely a smart move, as it does provide AIG political cover if the administration OKs the bonuses. But the Treasury Department’s stance its that AIG needs to prove that the executives deserve to be rewarded.
Clearly this is ruffling feathers after billions of government dollars were used to bail out the company. Recently, a congressional bailout watchdog group warned AIG it is only looking for trouble with these bonuses.
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