Executives quit controversial AIG unit
New York, March 24, 2009
A handful of senior executives working within American International Group Inc's controversial financial products unit have resigned, said a company spokeswoman.
The division is at the heart of the financial problems that brought AIG to the brink of bankruptcy last September, saved only by a taxpayer bailout that has now swelled to as much as $180 billion.
The spokeswoman declined to specify the exact number of resignations, noting they were expected to be "manageable," and said there were indications that more will follow.
The resignations come after $165 million in bonuses paid to employees of this AIG division on March 15 ignited fury across America, with taxpayers questioning why they were footing the bill for individual retention bonuses of up to $6.4 million.
Under pressure from Capitol Hill, AIG Chief Executive Edward Liddy last week asked many recipients to return at least half the value of the awards.
Many have also been asked to take sharp cuts in compensation for 2009.
On Monday, New York Attorney General Andrew Cuomo said that 15 of the top 20 AIG bonus recipients had returned the awards in full, calculating the value of the awards at about $50 million. He added that he expected as much as half, or about $80 million of total bonuses paid to American employees, to be recovered.
The tax implications for those who returned the bonuses was not clear, said Cuomo.
The US House of Representatives last week voted to reclaim 90 percent of the bonuses already paid to employees of the unit by levying a special tax.
A similar measure in the US Senate has yet to be decided.
Workers at AIG Financial Products' Wilton, Connecticut-headquarters have had to deal with ridicule and scorn, dodging picketers outside the workplace, while bus tours past some executive homes. Some have even received death threats, CEO Liddy said last week.
The financial products unit, as of last month, employed about 370 in offices in Connecticut, London, Paris, Hong Kong, Tokyo and India. - Reuters