The incredible expanding AIG bonus pool

You'd think an insurance company would know how to keep its numbers straight, wouldn't you? But for AIG, it just doesn't seem that easy.


Andrew Leonard
May 6, 2009 1:45AM (UTC)

Politico is reporting that AIG can't seem to keep its bonus numbers straight. After telling Politico in March that it had "paid about $120 million in 2008 bonuses to a pool of more than 6,000 employees," the company has now responded to a request from Rep. Elijah Cummings, D-Md., with the revelation that the true total is actually $454 million, distributed among nearly 50,000 employees.

Neither number includes the $165 million in "retention bonuses" paid to employees of AIG FP, the division responsible for the credit default swap trading that brought down the company.

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I'm not entirely sure what to make of Politico's story. The disparity in numbers between March and May is embarrassing and contributes to the narrative of the insurance company that just can't shoot straight, but I don't know if we're supposed to be horrified at the news that, for example, the 23,851 employees of AIG's Domestic Life and Foreign Life Operations division received an average bonus of $5,050 each or that the 8,669 employees of AIG's Foreign General Insurance Operations division received an average of $5,074 each.

I suppose one can reasonably ask if any employee of a company sucking down $185 billion worth of taxpayer bailout money deserves a bonus of any kind, but presumably these divisions of AIG included legitimate businesses. The reason the bonuses paid to AIG FP employees stoked so much outrage was because that division was partially responsible for tanking the whole global economy.

In other AIG related news, Bloomberg is reporting that on Thursday, AIG will announce its quarterly earnings. The good news: AIG is not expected to need any more bailout money, and the earnings figures will show a narrower loss than for the fourth quarter of 2008.

One would hope so! AIG lost $61.7 billion in that quarter -- a record for any U.S. company, ever! It shouldn't be that hard to trim losses just a little, huh?


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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