American International Group is asking the Obama administration’s compensation czar, Kenneth Feinberg, whether it should pay previous agreed-to retention bonuses, reports The Wall Street Journal.
Prior to Feinberg’s appointment, AIG had pledged to try to reduce overall payments for this year’s performance by 30 percent to a few hundred employees at the financial products unit. The company also delayed a smaller set of payments to 40 high-ranking AIG officials that is set to begin paying next week for 2008 performances.
The company hopes to reach an agreement with Feinberg, allowing their employees to keep enough of the promised bonuses to serve as an effective incentive, but also reduces payments enough to make them palatable to a skeptical public.
The administration had been looking to curtail what it views as excessive compensation, and at one point, proposed a salary cap for top executives.
In a statement, the Treasury said: “Companies will need to convince Feinberg that they have struck the right balance to discourage excessive risk taking and reward performance for their top executives. That process is just beginning now, and Feinberg has begun consulting with those firms about their compensation plans.”