AIG is all the rage right now! (And by "rage," I mean blind fury). As reported in the NYT, AIG gave out $165 million in bonuses last week, despite the fact that nearly 80% of it is owned by the US government.
Now Senators Wyden (D-OR) and Snowe (R-ME) may have reason to gloat just a little. It turns out that they introduced Senate Amendment 468 to the recently passed Recovery Act. This amendment would have required financial institutions receiving TARP funds (like AIG) to cap their bonuses at $100,000 or pay excise taxes of 35% on any portion above that figure that isn't immediately repaid to the Treasury.
The amendment actually passed the Senate, but was removed during the conference committee with the House. (At this point, no one is publicly taking responsibility for removing the amendment). According to Sen. Snowe, the pair will be re-introducing the legislation this week, but now they will be capping the bonuses at $25,000. And it will apply retroactively, to bonuses paid in 2008 as well. Suh-NAP.
AIG's CEO, Edward Liddy, will testify today before the House Financial Services Committee. Watch the hearing here or, if extremely uncomfortable situations cause you to avert your eyes, just check out his written testimony.
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