The front pages of the US papers today suggest that AIG are planning to pay out $165 million in bonuses to 400 employees in its financial products division.
According to the New York Times,
Word of the bonuses last week stirred such deep consternation inside the Obama administration that Treasury Secretary Timothy F. Geithner told the firm they were unacceptable and demanded they be renegotiated, a senior administration official said. But the bonuses will go forward because lawyers said the firm was contractually obligated to pay them.
Whilst the LA Times says that if the the bonuses are not paid
financial products employees who are denied payments could quit and that AIG's losses -- the insurer took the deepest bath in red ink in American history last quarter, losing $61.7 billion -- could spiral enormously if the only people who understand the company's convoluted dealings are not around to "unwind" the damage they have caused.
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