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 said. 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 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 percent stake in the company. On the eve of the hearing in the House of Representatives Financial Services Committee, condemnations of AIG and the bonuses were coming fast and furious, with the matter for the most part dominating news in Washington.
AIG chief Liddy has asserted that bonuses the company paid were necessary to retain the best and brightest talent, an assertion he expressed directly to U.S. Treasury Secretary Timothy Geithner in a letter, adding that bonus contracts with employees were finalized well before Congress approved financial bail out funds in late 2008. In a congressional hearing on Wednesday, the CEO of American International Group, the troubled insurance company, will face tough questions from angry members of Congress.
