WASHINGTON, March 24: Executives with AIG’s financial products division have agreed to pay back $50 million in bonuses amid outcry over the insurance giant’s use of taxpayer cash for executive perks, according to officials.

The agreement came as Treasury Secretary Timothy Geithner and Federal Reserve chief Ben Bernanke faced a grilling from lawmakers on Tuesday over government aid for the troubled American International Group.

The US government has so far pumped around $170 billion into the multi-national insurance titan to keep it afloat, fearing its collapse could deepen a market-wide liquidity crisis.

Fifteen of the top 20 bosses who received big bonus cheques after the US government doled out cash to rescue AIG would give back their bonuses, New York Attorney General Andrew Cuomo said on Monday night.

The 15 executives from the financial products’ unit are expected to return $30 million in cash. Mr Cuomo said a total of $50 million, including bonuses from other employees of the unit, was to be returned.

“I would like to say this to the individuals who have given the money back:

‘You have done the right thing. You have done what this country now needs and demands’,” he said in a statement.

Nine of the top 10 bonus recipients have agreed to return cash, Mr Cuomo said, adding he hoped to eventually get back $80 million paid out as bonuses in the United States.

Another $85 million was given to employees outside the United States, and Mr Cuomo said it was unlikely that US officials had the legal standing to seek to regain that cash.

The financial products division was widely blamed for the company’s downfall through its investments in complex financial derivatives that turned out to be worth a fraction of their on-book value.

AIG has been lambasted for using $165 million of government bailout funds to pay for staff bonuses, despite massive losses at the firm.

In the final quarter of 2008, AIG posted a $61.7 billion loss, the largest quarterly loss ever recorded in the United States.
—AFP
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