AIG is paying out the executive bonuses to meet a Sunday deadline, but the troubled insurance giant has agreed to administration requests to restrain future payments.
The Treasury Department determined that the government did not have the legal authority to block the current payments by the company. AIG declared earlier this month that it had suffered a loss of $61.7 billion for the fourth quarter of last year, the largest corporate loss in history.
Treasury Secretary Timothy Geithner has asked that the company scale back future bonus payments where legally possible, an administration official said Saturday.
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AIG agreed to reduce some retention payments in 2009 by 30 percent and tie bonuses to the companys recovery, according to a person briefed on the matter and a letter from AIG Chief Executive Officer Edward Liddy. The New York-based insurer still plans to distribute about $165 million on March 15 because of legally binding contracts, said the person, who declined to be identified because the talks werent public.
“I do not like these arrangements and find it distasteful and difficult to recommend to you that we - - - - >