The Good News About Those AIG Bonuses

You’d think that disproportionately big bonuses would be a serious no-no at any financial institution that benefited from last year’s bailout, right? — or at least the ones that haven’t already paid back their portion.

Well, think again!

American International Group, yes the insurance giant that received a whopping $182.3 billion aid package under TARP, is forking over about $100 million in bonuses to employees in the Financial Products unit – today! –according to the Washington Post.

Now, you’re thinking, where’s the good news here?

Well, for starters, the bonuses amount to 10 to 20 percent less than what employees were originally promised. Even better? Today marks the winding down of $195 million in awards promised to employees by the embattled institution before the bailout ever happened, reports Reuters.

"It ends this March with the last of these retention payments. These are the old grandfathered payments," Obama TARP czar Kenneth Feinberg told ABC's "Good Morning America. "Another month or so, these old, guaranteed bonuses will be a thing of the past."

Feinberg said AIG was "working hard to try and reduce the size of these bonuses" while moving to repay $45 million in previous bonus payments, adding that $39 million has already been returned to the Treasury (and the taxpayer.) AIG is expected to repay the remaining $6 million or so in the near future (or so the Obama administration hopes.)

Now here's an even better idea: Since AIG is already committed to paying out these bonuses, why not add a clause requiring recipients donate a percentage to charity? We recently told you about a proposal at Goldman Sachs to do just that. After all, even a small percentage of $100 million could go a long way.

Photo courtesy of AMagill via Flickr.