American International Group said that after its U.S. bailout, retention bonuses planned for employees will cost the company $249 million in the last two quarters of this year, reports Bloomberg. The division that sold derivatives blamed for the firm’s near-collapse last year will receive $93 million of that money. AIG said the entire retention program will cost $1.09 billion, including $824 million already incurred through June 30 and and $19 million for 2010 and 2011 combined. “The public will perceive this very poorly,” said Frank Glassner, chief executive officer of pay consulting firm Veritas LLC. He said better plans provide more incentive for employees to improve performance, and AIG’s approach is “a poorly designed pay program that shareholders and taxpayers will have to bear the brunt of.”AIG agreed in September to turn over a majority stake to the government in exchange for a bailout that exceeded $182.5 billion including loans, an investment and purchase of mortgage-linked assets owned or insured by the company.
AIG Plans $249M in Retention Bonuses for 2009
AIG, criticized by Congress for handing out retention bonuses after its taxpayer-funded bailout, will award retention bonuses, costing the company $249 million
August 7, 2009