NEWS
2/3/2010 11:26:00 AM
AIG employees to get $100 million in early bonus round
| |
|
Thought you couldn't get any more incensed about the Wall Street bonus scandals? Think again.
A group of American International Group (AIG) employees who agreed to accept discounted bonus payouts are expected to receive their payments today -- a whopping $100 million -- more than one month ahead of schedule.
Another bailed-out bank, Charlotte, N.C.-based Bank of America Corp., will give its CEO a 19 percent raise this year, according to a filing with the Securities and Exchange Commission. Brian Moynihan, who succeeded former CEO Kenneth Lewis on Dec. 31, will receive $950,000 in cash. That's up from $800,000 last year, when he was head of the bank's consumer banking division.
Additionally, two Bank of America divisional presidents, Joe Price, head of consumer, small-business and card banking, and Barbara Desoer, president of home loans and insurance, each will receive an $800,000 base salary this year, a 60 percent raise from their previous half-million-dollar salaries.
At AIG, this week's bonus payments will go only to employees at the company's Financial Products division who agreed recently to accept between 10 and 20 percent less money than AIG had initially promised them years ago, The Washington Post reported. In return, they are receiving their payments more than a month ahead of schedule.
The insurance giant is still scheduled to pay out tens of millions of dollars more in March, mostly to former employees who did not agree to the concessions. The government and AIG officials agreed last year that the bonuses, however unsavory in the wake of the company's multiple federal bailouts, were legally binding.
The new payments are in part an attempt by AIG to meet two demands from U.S. compensation czar Kenneth Feinberg. One is to scale back the size of the bonuses. By paying the employees less than they had been promised, the company is also seeking to compensate for $26 million that Financial Products employees had previously said they would return by the end of last year, but did not.
AIG executives have been scrambling to hammer out a compromise in advance of March 15, when the firm faces a deadline to pay nearly $200 million in bonuses to employees at Financial Products, the unit whose risky derivatives deals brought the insurer to the brink of collapse in 2008.
People familiar with the negotiations said about 97 percent of current employees at Financial Products division agreed last week to forgo 10 percent of their upcoming bonus in return for early payment. Participation rates have remained far lower -- about 35 percent, one person said -- among former employees, who were asked to surrender 20 percent of their bonuses.
"This lets us, as a business, pivot away from this issue," one Financial Products employee, who was not authorized to speak on the record, said of the deal. "Current employees stepped up. They want to continue to do their business. They obviously want to get beyond this."
|
Article Comment Submission Form
|
|
