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AIG: $2.4 million in bonuses on hold

Insurer was scheduled to pay bonuses to 43 top executives July 15, but Treasury official nominee says they were not paid.

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By David Goldman, CNNMoney.com staff writer

AIG bonuses
The bonus saga continues with payments scheduled for later this year and 2010.
FP retention bonuses: $450 million
Paid $215 million
Pending $235 million
Executive bonuses: $121 million
Paid $116.2 million
Pending in July $2.4 million
Pending in Sept. $2.4 million
Who will benefit most from the Obama administration's proposed financial regulations?
  • Consumers
  • Banks
  • Regulators

NEW YORK (CNNMoney.com) -- Troubled insurer AIG did not pay $2.4 million in bonuses scheduled to be delivered to top executives on July 15, according to a Treasury official nominee.

George Madison, nominated to be general counsel for the Treasury Department, told Senate Finance Committee Ranking Member Chuck Grassley, R-Iowa, on Wednesday that he had "been advised that AIG did not make any bonus payments to its senor executives on or around July 15, 2009," in response to questioning about the matter.

AIG (AIG, Fortune 500) sought the government's consent earlier in July to make the performance bonus payments to 43 of the company's top-ranking executives.

The company declined to comment.

Millions under review. Kenneth Feinberg, the Obama administration's pay czar, was tasked with reviewing the scheduled $2.4 million, along with payouts of $235 million more scheduled to be paid out to AIG-Financial Products employees next year. Feinberg is analyzing bonuses and retirement packages for the 100 highest-paid executives at AIG, Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500), General Motors, GMAC, Chrysler and the now defunct Chrysler Financial.

Madison, a presidential nominee, is currently working for Treasury, a Treasury spokesman said.

However, Madison said Feinberg has not issued any advisory opinion on compensation, including AIG. He would only say that Feinberg continues to work with the troubled insurer.

AIG is trying to avoid another public uproar about its bonuses, after furor erupted in March when it was revealed that the company had paid out $165 million of retention bonuses to those employees.

The $2.4 million is part of a larger bonus pool of $121 million, the vast majority of which was paid out in March to the company's most senior executives.

The $165 million -- and remaining $235 million -- is from a larger retention bonus pool of $1 billion. To top of page

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