socialmedian: Fury over AIG's $450m payout to staff

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Source: The Guardian

Mar 16, 2009

Summary

The crisis-stricken insurer AIG has infuriated the Obama administration by paying "retention" bonuses of $450m (£322m) to staff at the London-run financial products division that crippled the company with vast losses on toxic derivatives.

Senior White House officials yesterday condemned the payments by the struggling company which has received more than $150bn of US government aid.

Newly released figures revealed that billions of dollars of public money used to prop up AIG have flowed to European banks which were trading partners with the insurer including Barclays, HSBC and Royal Bank of Scotland.

AIG's problems are largely down to disastrous contracts to protect banks against bad losses which were written by AIG Financial Products a business largely run from offices in Mayfair.

AIG is handing out money to 400 executives from this unit under a loyalty programme drawn up before the scale of its difficulties became clear.

The payouts are over the course of several years, with a tranche of $165m due this week. In addition, AIG is providing $121m to 6,400 emplo

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