The 2010 bonus season is on the horizon at American International Group, but the backlash from the 2009 payouts have yet to be put to rest.
The giant insurance group still needs to repay about $26 million of the bonus payments it made last year to employees in its financial products division. News of the bonus packages totaling $168 million turned the bailed out company into public enemy number one, compelling the company and some executives pledge to give back about $45 million of their bonuses.
AIG Financial Products employees are set to receive about $195 million in retention bonuses by March 15 and company executives are working hard to determine how best to avoid stirring the public's anger and stoking a mass employee exodus. A potential plan in the works proposes to make the payment several weeks early if employees agree to have it reduced by 10% to 15%, people familiar with the matter said, writes The Wall Street Journal. The hope is to reduce the awards by $26 million which will allow the company to repay the pledged amount from 2009.
The finance arm is in the midst of unwinding thousands of derivative trades that still pose a risk to the company and finance system. The unit's headcount has thinned to 237 people from 428 before the government bailout.