American International Group Inc (AIG) derivatives staff agreed to forgo about three-quarters of the US$26 million in retention bonuses that the US paymaster asked be forfeited, people with knowledge of the matter said.
Employees in the bailed-out insurer’s Financial Products unit, which sold the derivatives that drove New York-based AIG to the brink of collapse, agreed to cuts in scheduled payments totaling about US$20 million as of Friday in exchange for getting the cash earlier than originally planned, said the two people, who declined to be identified because the talks are private.
AIG enraged lawmakers in March after handing out about US$168 million in retention awards to Financial Products staff following a US bailout that has swelled to US$182.3 billion. Under pressure from New York Attorney General Andrew Cuomo, the staff pledged to return about US$45 million.
After the employees returned US$19 million last year, Kenneth Feinberg, the special master on executive pay for US President Barack Obama’s administration, asked AIG to recoup the remaining US$26 million.
AIG asked Financial Products staff to accept a 10 percent cut to the final round of retention bonuses payable this year, the people said.
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