Pay Czar Playing Hardball With AIG On Bonus Pledges
Ken Feinberg insists AIG fulfill pledges to return some of retention payments.
Jan. 25, 2009— -- Ken Feinberg, the Obama administration's pay czar, is insisting that bailout recipient AIG fulfill pledges from its employees to return portions of their controversial 2009 retention payments, ABC News has learned.
When the insurance giant – the recipient of a record $182 billion in taxpayer aid – dished out $168 million last March, there was massive popular backlash. Under pressure from the government and the general public, Ed Liddy, the CEO at the time of the troubled insurance giant, told Congress at a March 18 hearing that he was taking steps to get the money back.
"This morning I have asked the employees of AIG Financial Products to step up and do the right thing, specifically I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments," Liddy said. "Some have already stepped forward and offered to give up 100 percent of their payments."
At the time the company had 298 employees receiving bonuses worth at least $100,000.
"We will work to ensure the highest level of employee participation in this effort in the days ahead and we will keep the Congress and the American people informed of our progress," Liddy told lawmakers.
But nearly a year later, the government is still in negotiations with AIG to get the money back. A government audit in October said that as of August employees had pledged to return a total of $45 million in payments, but only $19 million had been collected.
Feinberg has repeatedly told the insurance giant that the repayment of the remaining $26 million in bonus pledges is a non-negotiable issue.
A resolution may come in the next two months when Feinberg is expected to issue his rulings for 2010 pay plans at five companies receiving "exceptional assistance" from the government. The companies are AIG, General Motors, Chrysler, GMAC, and Chrysler Financial.
AIG had no comment on the status of the fulfillment of the bonus pledges other than saying that they continue to work with Feinberg on compensation issues.
