AIG bonus payments controversy

Further information: Bankers' bonuses
The lobby of AIG's headquarters in the American International Building.

The AIG bonus payments controversy began in March 2009, when it was publicly disclosed that the American International Group (AIG) insurance corporation was going to pay approximately $218 million (~$301 million in 2023)[1] in bonus payments to employees of its financial services division.

AIG is notable for having received taxpayer bailouts and in the fourth quarter of 2008 posted a loss of $61.7 billion (~$85.7 billion in 2023),[1] the greatest ever[as of?] for any corporation.[2] Beyond the $165 million in bonus payments that were announced in March 2009, the total bonuses for the financial unit is unknown; it was estimated that it could have reached $450 million and bonuses for the entire company could have reached $1.2 billion.[3]

The event sparked widespread outrage among both Democratic and Republican politicians, and from media commentators on all sides of the political spectrum. Both the House of Representatives and the Senate adopted bills that taxed these bonuses at a very high rate, but these bills were never signed into law and were opposed by the financial sector and President Barack Obama.

In the end, some AIG employees, including 15 out of the 20 top executives of the company, paid back the bonuses they received to the company. In total, 50 million dollars in bonuses paid were returned to AIG.[4] Following this announcement, House Majority leader Steny Hoyer concluded that the scandal did not warrant a legislative response.[5]

  1. ^ a b Johnston, Louis; Williamson, Samuel H. (2023). "What Was the U.S. GDP Then?". MeasuringWorth. Retrieved November 30, 2023. United States Gross Domestic Product deflator figures follow the MeasuringWorth series.
  2. ^ Raum, Tom. "Obama: AIG can't justify 'outrage' of exec bonuses". Archived from the original on March 20, 2009. Retrieved March 18, 2009.
  3. ^ MacDonald, Elizabeth (March 17, 2009). "American Inconscionable Group". blogs.foxbusiness.com. Archived from the original on September 22, 2009. Retrieved October 31, 2011.
  4. ^ "15 AIG employees return bonuses worth $30M". cbc.ca. Associated Press. March 23, 2009. Retrieved 22 June 2020.
  5. ^ Cite error: The named reference :0 was invoked but never defined (see the help page).