The chairman and CEO of American International Group acknowledged today to congressional interrogators that some of the insurance giant’s executive bonuses are “distasteful.” “We are meeting today at a high point of public anger,” Edward Liddy, chairman and chief executive officer, conceded in testimony prepared for a hearing by a House Financial Services panel. “I share that anger,” he says.
Liddy told lawmakers that the company grew into an internal hedge fund that became overexposed to market risks. AIG is the largest recipient of federal government emergency assistance. It has received $170 billion in bailout help, and the government holds a nearly 80% stake in the company.
AIG is under fire for $220 million in retention bonuses paid to employees in its troubled financial products division. The most recent payment of $165 million began to be paid last Friday and caused a furor. Liddy, who has led American International Group Inc. since last fall, has become the reluctant defender of princely employee bonuses that members of Congress—and much of the American public—find indefensible.
