Insurance giant American International Group, which has received $170 billion in funds from the government to stay afloat, will award about $165 million in employee bonuses. The U.S. government has an 80 percent ownership stake in the company. Treasury Secretary Tim Geithner had urged AIG’s chief Edward Liddy to renegotiate the payments, but Liddy said he had “grave concerns” about the impact on the firm’s ability to retain talented staff. Liddy’s recommendation has “outraged” the Obama administration:
The senior government official, who was not authorized to speak on the record, said the administration was outraged. “It is unacceptable for Wall Street firms receiving government assistance to hand out million-dollar bonuses, while hard-working Americans bear the burden of this economic crisis,” the official said.
The payments “are in addition to $121 million in previously scheduled bonuses for the company’s senior executives and 6,400 employees across the sprawling corporation.”
“There are a lot of terrible things that have happened in the last 18 months, but what’s happened at AIG is the most outrageous,” said Summers, chairman of the White House National Economic Council, during an appearance on ABC’s This Week.