American International Group Inc Chairman Edward Liddy said some of his company’s compensation payments were “distasteful,” acknowledging a public outcry over $165 million in bonuses paid after a bailout by US taxpayers.
“No one knows better than I that AIG has been the recipient of generous amounts of government financial aid,” Liddy, said on Wednesday in prepared remarks at a House Financial Services subcommittee hearing in Washington. “We are acutely aware not only that we must be good stewards of the public funds we have received, but that the patience of America’s taxpayers is wearing thin.”
Liddy’s reputation is at stake as he defends AIG’s actions before Congress, where lawmakers have lashed out against the insurer for paying employees in the unit that sold credit-default swaps, transactions that helped trigger the global credit crisis. The contracts were signed before Liddy took the job in September at the government’s request.
“Something is seriously out of whack, and AIG needs to fix it now,” Representative Paul Kanjorski, a Pennsylvania Democrat who heads the subcommittee, said in his opening remarks.
Kanjorski called on Liddy “to accept responsibility, not to provide excuses.”
AIG has already adopted executive-pay restrictions, eliminated federal lobbying activities and stopped political contributions, Liddy said.
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“I am personally mindful of the environment in which we are operating and the president’s call for a more restrained compensation system,” Liddy said. “At the same time, we are essentially operating AIG on behalf of the American taxpayer so that we can maximize the amount of money we pay back to the government.”