AIG Bonuses Four Times Higher Than Originally Believed from BailoutSleuth

http://bailoutsleuth.com/2009/05/aig-bonuses-four-times-higher-than-originally-believed/

American International Group Inc. paid out more than $454 million in bonuses last year, almost four times as much as it had previously reported.

Responding to questions from Rep. Elijah Cummings (D-Md.), the insurance and investment giant detailed how much it paid to employees of six of its divisions, as well as payments that were distributed companywide.

These payments are separate from the $165 million in retention payments that the company announced earlier this year it was contractually obligated to pay to employees of its financial products division.

That division was responsible for creating and marketing the complicated derivatives products that eventually threatened to bankrupt the company.

The decision to pay them retention bonuses out of the $170 billion that the firm had received in government bailout money caused a major public outrage, and at least some AIG employees opted not to accept them.

The $454 million in bonuses described in the letter to Cummings cover payments to workers at all of AIG's operating units around the world. The averages by unit ranged from $5,403 per worker at AIG's property and casualty business, to $51,206 per worker at the company's asset management business. The average for all workers was less than $9,000.

Those payments also are separate from the roughly $1 billion in retention payments that AIG distributed to induce workers to remain with the troubled company.

Politico.com, which first reported the new bonus figure, said AIG told it March that 2008 bonus payments -- excluding retention agreements -- totaled $120 million.
 
That number itself was surprising because in testimony before Congress earlier that month, AIG Chief Executive Edward Liddy said that the firm had paid out only $9 million in bonuses.

A spokesman for AIG told Politico that the discrepancies resulted from how the question had been posed to the company.

AIG was asked in March: "What was AIG's total bonus pool (outside the retention agreements) for 2008?" It answered $120 million. AIG has since said that figure represented payments only to its highest-ranking executives.

The $454 million figure came in response to a list of questions submitted by Cummings.

AIG was asked, "Please specify the exact amount in bonuses -- not retention payments or any other form of compensation -- paid by AIG to employees of any division of AIG in 2008 or paid in 2009 for work performed in 2008."

An AIG spokesman said the $454 million "reflects all types of variable compensation across all of our businesses," Politico reported.