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AIG executives to give back bonuses

Article published on the 2009-03-24 Latest update 2009-03-24 11:09 TU

Protesters stand in front of AIG's Financial Products Headquarters after a bus tour of executives' houses(Photo: Reuters)

Protesters stand in front of AIG's Financial Products Headquarters after a bus tour of executives' houses
(Photo: Reuters)

Executives of the AIG insurance multinational are to pay back 50 million dollars (37 million euros) in bonuses paid after the multinational received 170 billion dollars (125 billion euros) in a state bailout. The announcement comes ahead of a Congress committee meeting which is expected to grill Treasury Secretary Timothy Geithner and Federal Reserve chief Ben Bernanke on the controversy.

Fifteen bosses have agreed to hand back bonuses worth 30 million dollars (22 million euros), New York Attorney General Andrew Cuomo said late Monday.

They were in charge of the financial products unit, whose investments in financial derivatives was a major contributor to AIG racking up the largest quarterly loss ever recorded in the US in the final quarter of 2008 at 61.7 billion dollars (45.6 billion euros).

"You have done the right thing. You have done what this country now needs and demands," Cuomo told the executives in a statement.

He hopes that 80 million dollars (59 million euros) will be returned and already has commitments for 50 million dollars (37 million euros). But five of the top bosses have not agreed to return the cash and Cuomo believs that 80 million dollars (59 million euros) paid in bonuses outside the US are a write-off.

The House of Representatives last week approved a 90 per cent tax on bonuses paid to employees earning more than 250,000 dollars (185,000 euros) in firms that have received substantial government bailout funds.

President Barack Obama's much-criticised Treasury Secretary Timothy Geithner is to appear before the House of Representaitives Financial Services Committee on Tuesday, along with Fed chief Ben Bernanke and William Dudnely, the boss of the Federal Reserve Bank of New York.

Geithner has declared that he "should have known eralier" about the size of the handout but added that "it would not have affected the choices we had".