* AIG discussing plan to cut 2010 bonuses -source
* Plan would help AIG recoup $26 mln to be repaid -source
(Changes sourcing, adds details)
NEW YORK, Jan 18 American International Group
Inc (AIG.N) is exploring several ways to repay $26 million of
the $45 million in bonuses that executives at its financial
products unit pledged to return last year, including a plan to
cut 2010 bonuses but pay them out early, a source familiar with
the matter said on Monday.
The plan being discussed is to make retention bonus
payments to employees at the unit several weeks before they are
due in March if they agree to have it cut by up to 15 percent,
the source said, speaking on condition of anonymity because
these details have not been made public.
By doing so, AIG -- which is obligated to pay out $195
million in retention bonuses in March to AIG Financial Products
employees -- would recoup the $26 million needed to cover the
shortfall, the source said.
The news was first reported by The Wall Street Journal.
Last year, some employees of AIGFP said they would repay
portions of their March 2009 bonuses after a public outcry at
the size of these payments. But a government audit from late
2009 said only $19 million of the total $45 million pledged has
"We remain committed to meeting our commitments to return a
portion of the retention payments," an AIG spokeswoman said.
The current proposal is designed to meet pay czar Kenneth
Feinberg's demand that the remainder of the $45 million paid
out as bonuses last year be recouped, the source said.
Feinberg is the U.S. Treasury Department's special master
for compensation, hired to help sort out exorbitant pay at
firms that received bailout dollars.
Bad bets on toxic mortgages and credit default swap
contracts made by the AIGFP unit led to the insurer's near
collapse and the subsequent U.S. bailout. AIGFP is in the
process of winding down its derivatives business.
(Reporting by Anupreeta Das and Steve Eder; Editing by Diane