AIG asking to pay back bonuses

SPRINGFIELD, Mass. (WWLP) - American International Group, or AIG, ignited a firestorm of criticism in March when they began paying contracted bonuses after receiving nearly $182 billion in federal bailout money.

AIG still owes $235 million to employees of its crippled Financial Products division.

The issue of the bonuses resurfaced late Thursday after AIG asked the government's consent to make a scheduled performance bonus payment of $2.4 million to 43 of its top-ranking executives.

AIG put the issue before Kenneth Feinberg, the Obama administration's compensation czar.

Feinberg is reviewing bonuses and retirement packages for the 100 highest-paid executives not only at AIG, but Citigroup, Bank of America, General Motors, GMAC, Chrylser and the now defunct Chrylser Financial.

Local residents 22News spoke with do not approve of the bonus bailout.

"I suppose it's good that they asked, but my opinion is that the government bailout money should not be able to be earmarked for bonuses," said John Dalsey of Longmeadow.

"I don't think they should pay it," said Carol O'Connor of Springfield.

Feinberg will be reviewing both the $2.4 million, as well as the much more controversial $235 million that is scheduled to be paid out to AIG employees next year.

After the uproar in March, employees returned about a third of their bonuses, and a dozen workers resigned.

While the company is not required to get government approval because the payments are for 2008 employment contracts, executives are reluctant to move without official approval.