AIG Bonus Update: Geithner Says Bonus Money Will Be Returned to Treasury

A quick update on the AIG bonus saga before we post this week’s new feature article.

Treasury Secretary Timothy Geithner said yesterday that AIG will be forced to return the $165 million it recently paid out in bonuses to executives.  According to the CNN.com story on AIG being required to return the bonus money:

“We will impose on AIG a contractual commitment to pay the treasury from the operations of the company the amount of the retention awards just paid,” Geithner wrote. “In addition, we will deduct from the $30 billion in assistance an amount equal to the amount of those payments.”

That would be a double payment, essentially a $165 million penalty on AIG for issuing the bonuses.

Also, as an addendum to yesterday’s post in which we mentioned that seven employees received $4 million or more each, the results of New York Attorney General Andrew Cuomo’s investigation found that 73 employees at AIG received bonuses of more than $1 million each.  11 of the employees no longer work for the company.

Read more:

AIG Makes Controversial Decision to Award Bonuses

AIG Bonuses: Business Ethics and Law Questions Abound

Congress Threatens to Tax AIG Bonuses at 60-100%

Tags: AIG, federal bailout, Timothy Geithner