Back in March, AIG sought to quell public outrage over the hundreds of millions in retention bonuses it paid to employees by having many of the executives at its toxic Financial Products group promise to give back at least half of their bonuses. All told, roughly $45 million of the $168 million in “retention payments” were pledged to be returned.
A report by TARP Inspector General Neil Barofsky has found that only $19 million, or less than half, of the $45 million in pledged repayments had been received by the end of August. AIG now seems to be backing away from the pledge, telling investigators that the additional $26 million could hinge on how negotiations proceed with the Obama administration’s pay czar Kenneth Feinberg.
Those pledges helped convince Congress to back off its plans to levy a 100% tax on the bonuses and calmed down a very angry public. If you need a reminder of how much outrage there is, take a look at this cover of the New York Post.