AIG chief testifies some bonuses will be returned
WASHINGTON -- AIG CEO Edward Liddy said today that the company has asked employees in the financial products division who received bonuses of more than $100,000 to return at least half of the money.
Some employees have already pledged to return all of their bonuses, he said.
"We've heard the American people loudly and clearly," Liddy said.
"We are acutely aware not only that we must be good stewards of the public funds we have received, but that the patience of America's taxpayers is wearing thin," Liddy said in testimony to a House subcommittee today.
Also, Rep. Charles Rangel says the House plans to take up a bill Thursday that would impose a 90% tax on bonuses paid to top-earning employees at AIG and other companies big government bailouts.
The New York Democrat, who chairs the tax-writing House Ways and Means Committee, said the tax would hit employees making more than $250,000 a year.
He said the $5 billion threshold for companies to be covered would exclude community banks and other smaller companies that have received bailout money.
As new details emerged about $165 million in bonuses paid by the bailed-out insurance giant, lawmakers and administration officials are seeking ways to recoup the money either by imposing stiff new taxes on the extra pay or requiring the company to return it in exchange for future taxpayer aid.
Liddy said the company made the payments to employees in the financial products division, which was at the heart of AIG's problems, in part because the firm still has to wind down that part of the company and needs to retain people with expertise. The division's portfolio still has "substantial risk," Liddy said.
"I'm trying desperately to prevent an uncontrolled collapse of that business," Liddy said. He noted that if AIG were to go under, the government would not be paid back.
"I know $165 million is a very large number," Liddy said of the bonus pool. But given $1.6 trillion still needs to be wound down, "we thought that was a good trade."
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