Nine of the 10 AIG employees who received the highest bonuses earlier this month have agreed to give the bonuses back, says New York Attorney General Andrew Cuomo.
The company recently paid out $165 million in retention bonuses to employees in the unit that was primarily responsible for the company's financial troubles. The company was on the verge of collapse when the federal government brought billions of dollars in aid, now totaling more than $170 billion.
When the news of the bonuses leaked, many politicians voiced outrage. Cuomo has been pressing the bonus recipients to return the money, starting with the employees who received the biggest bonuses. He thanked the employees who returned the bonuses.
“You have done what this country now needs and demands,” Cuomo said. “We are living in a new era of corporate and individual responsibility. I thank you for setting an example for the rest of the company.”
Of the employee who received the top 20 bonuses, 15 have agreed to return them. Cuomo estimates that thus far employees have agreed to return $50 million of the $165 million.
Earlier this week, the U.S House of Representatives approved legislation that would impose a 90 percent tax on bonuses that go to highly paid employees at recipients of the Troubled Assets Relief Program (TARP).
The 90 percent tax would apply to TARP recipients' bonus payments to employees who have an adjusted gross income exceeding $250,000 ($125,000 in the case of a married individual filing a separate return).
The legislation (H.R.1586) would exempt any employee who irrevocably waives or returns a bonus payment before the close of the taxable year. The exemption wouldn't apply to any employee who receives any benefit from the employer in connection with the waiver or return of such payment.
The legislation would apply to TARP recipients who received more than $5 billion from the program. Companies that repay the amount that exceeds the $5 billion threshold would be exempt from the tax.
The legislation now goes to the Senate.