Edward Liddy, the head of American International Group (AIG), a US insurance giant, told the US Congress that the "cold realities of competition" forced the company to pay out $165m in bonuses that have enraged the US public.
Liddy, under intense questioning from politicians in Washington, said on Wednesday: "Americans are asking quite simply, why pay these people anything at all?" about the bonuses handed to over 400 of its staff or former staff.
"I'm trying desperately to prevent an uncontrolled collapse of that business.
"This is the only way to improve AIG's ability to pay taxpayers back, quickly and completely, and the only way to avoid a systemic shock to the country that the US government [bailout], was meant to relieve."
Despite definding his legal obligation to pay the bonuses, Liddy asked employees to "do the right thing" and return at least half of the "retention payments" that have outraged American taxpayers who spent billions bailing out the troubled insurance giant.
Testifying under oath at the Congressional hearing, Liddy said he understood the rage over executive bonuses and said some AIG executives already have stepped forward to give money back.
Paul Hodes, a US Congressman, said on Wednesday AIG now stood for "Arrogance, Incompetence and Greed."
Gary Ackerman, a fellow Democrat, spoke of "a tidal wave of rage" sweeping the recession-hit United States.
But Alex Brill, a former economic adviser to former president George Bush told Al Jazeera: "These contracts were put in place prior to the bailout, prior contracts between two entities. "Now the taxpayer has gotten involved, and Washington is involved, they don't like the agreements on the ground between AIG and its employees, and they're discovering it right now." |