Need a job? Try AIG.
American International Group CEO Edward Liddy was under the klieg lights Wednesday for paying $165 million dollars in retention bonuses to employees who are “winding down” the company’s notorious Financial Products division, known as AIG FP.
Liddy said he knew the company would be attacked for paying the bonuses, but he decided it would be better to pay them because the firm needed workers who understood the complex transactions on AIG FP’s “book” to make sure the contracts could be closed out.
Many lawmakers wanted AIG to fire everybody working for AIG FP and hire new ones to close the AIG FP unit. But Liddy said it wasn’t that easy.
“People don’t want to work at AIG. They are not cheap if you try to get them,” Liddy told the outraged members of Congress.
So Liddy decided to keep the existing employees and pay them extra money for staying at the firm instead of walking out the door.
“If we keep those people, we have a higher probabilty of running this book down and not costing the American taxpayer more” than the $78 billion already dispensed to AIG from Uncle Sam, Liddy told the panel.
The pols weren’t buying it.
“Can you understand the American people might think you paid way too much to get that bargain?” one lawmaker asked incredulously.
(Reuters photo by Kevin Lamarque)