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CHARLOTTE — Embattled insurer American International Group Inc. said it has set aside and paid in part nearly $1.5 billion in retention and performance-related bonuses to its employees, a higher amount than previously disclosed.
The payments, $1 billion for retention purposes and more than $454 million that are performance-related, have been made as AIG received more than $180 billion from the federal government.
The New York-based company previously said it will pay around $1 billion in payments aimed at retaining employees through 2010. Some of that money was paid out in 2008, and more will be paid out this year and in 2010.
But in answers to questions from a lawmaker that were released earlier this week, AIG said it also paid more than $454.7 million in previously undisclosed performance bonuses to employees in 2008.
AIG has been heavily criticized by government officials and the public after it awarded $165 million in bonuses in March; the money is included in the $1 billion in retention bonuses. Some of the money was returned by employees.
AIG told Rep. Elijah Cummings, D-Md., the performance bonuses were paid out by operating units, across the company's operations in some 120 countries. Cummings has been one of AIG's sharpest critics.
"I was not surprised to see a new number from AIG regarding compensation, but I was shocked to see that this latest figure is nearly 4 times what we last received," Cummings said Wednesday in a statement released through a spokeswoman. "If AIG can't provide a straight answer to a simple question like this, how can we expect them to manage $182 billion in taxpayer money?"
The payments, on average, ranged from $4,994 to employees of its financial services business, to $51,026 for employees in the company's asset management group.
AIG also told Cummings that the company's 2009 bonus plans were under development, "in consultation with the Federal Reserve and Treasury."
"Congress asked us for additional information regarding all performance compensation paid to employees around the world. We have provided details on some 374 variable performance plans for work done by lower level employees last year," AIG spokeswoman Christina Pretto said. "These are not new payments and are not part of AIG's corporate executive bonus pool, which we reported in March was approximately $120 million."
The bonuses were given to employees of the financial products division, a global unit that issued derivatives called credit default swaps, which drove AIG almost to collapse last year. Once the world's largest insurer, AIG has received $182.5 billion in financial support from the government since September. Problems at AIG did not come from its traditional insurance subsidiaries, but from the problems at the financial products division.
The government stepped in to provide support because of fears that a collapse of AIG would trigger hundreds of billions of dollars in losses at financial institutions worldwide, further crippling the already battered credit markets.
