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Pay Czar Cites Legal Obstacles in Curbing AIG Bonuses
By: devona walker
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Thu, 02/04/2010 - 07:53
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The Washington Post reports the Obama administration's compensation czar said Wednesday that he will continue pushing for reductions to the hefty bonus payments being handed out by American International Group but acknowledged that he is constrained by guarantees the company made to employees years ago.
"I am as troubled as Main Street is by the contracts," Kenneth R. Feinberg said in an interview, referring to agreements signed before the financial crisis that promised millions in retention bonuses to employees at AIG's troubled Financial Products unit. But, he added, "there's a limited amount of leverage when you have valid, grandfathered contracts."
Outrage surfaced again this week with news that the bailed-out insurance giant would pay $100 million to employees at Financial Products, a year after $168 million in similar payments to the same set of employees sparked a national uproar. The most recent bonuses are going to employees who agreed to accept less money than AIG had promised in return for early payment.
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