WASHINGTON–Disclosure that American International Group paid more than $450 million in bonuses early last year to retain employees at its troubled Financial Products Group is stirring more outrage against the company on Capitol Hill.
But, a spokesman for AIG defended the action, saying it was necessary to keep the business running after the executive in charge was dismissed in March, and long before the company's dire need for a federal bailout became necessary. Moreover, she said, it is a contractual obligation.
It comes as financial services companies are under renewed fire following New York state officials' release of tax records indicating that financial executives working in the state were paid $18 billion in bonuses last year even though the industry reported billions of dollars of losses and some firms like AIG required government bailouts in order to stay in business.
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