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|Source:||UPI Business News|
U.S. insurance giant American International Group has found legal arguments to help it reduce bonus pay by $21 million, a source told The New York Times.
The firm found itself embroiled in political turmoil last year, when it attempted to pay full bonuses to employees after accepting billions of dollars in taxpayer assistance to rescue it from near-collapse.
While politicians fumed a year ago, AIG employees pledged to return $45 million out of the $165 million in bonuses paid. But employees only returned about half what they pledged, the Times reported Monday.
AIG has argued that a two-year contract signed in 2008 obligates the company to pay the bonuses, despite job performance.
But the firm plans to make use of a stipulation in the contract that allows it to reduce checks if an employee earns outside income, a source told the newspaper.
Many employees have left AIG since the crisis hit and the insurer will count income from any of its new jobs against the amount earned in bonus pay, which was set up, in part, as retention pay, the Times said.
AIG also reduced bonuses a month ago by offering bonuses early to employees who would accept a smaller checks, the Times said.