AIG To Pay $100 Million in Bonuses

American International Group plans Wednesday to pay another round of employee bonuses worth about $100 million, said several people familiar with the matter, a year after similar payments at the bailed-out insurance giant infuriated many Americans and inflamed Washington.

This week's payments will go only to employees at the company's Financial Products division who agreed recently to accept between 10 and 20 percent less money than AIG had initially promised them years ago. In return, they are receiving their payments more than a month ahead of schedule.

The company is still scheduled to pay out tens of millions of dollars more in March, mostly to former employees who did not agree to the concessions.

AIG executives have been scrambling to hammer out a compromise in advance of March 15, when the firm faces a deadline to pay nearly $200 million in bonuses to employees at Financial Products, the unit whose risky derivatives deals brought the insurer to the brink of collapse in 2008. Government and AIG officials have been eager to avoid a repeat of the public furor that erupted last March when an earlier round of payments — worth $168 million — went to the same set of employees.

People familiar with the negotiations said about 97 percent of current employees at Financial Products division agreed last week to forgo 10 percent of their upcoming bonus in return for early payment. Participation rates have remained far lower — about 35 percent, one person said — among former employees, who were asked to surrender 20 percent of their bonuses.

Gerry Pasciucco, who was hired after the bailout to run Financial Products and help dismantle it, sent an email to employees earlier this week explaining that the company had decided to move forward with the reduced payments. "We expect payment to be received in your account no later than Wednesday, Feb. 3," it read in part.

"This lets us, as a business, pivot away from this issue," one Financial Products employee, who was not authorized to speak on the record, said of the deal. "Current employees stepped up. They want to continue to do their business. They obviously want to get beyond this."

Andrew Goodstadt, a New York attorney who represents more than a dozen current and former Financial Products employees, said he hoped the deal would be a step toward normalcy. "My clients are looking forward to getting paid their contractual entitlements," he said, "and resolving this matter once and for all."

The new payments are in part an attempt by AIG to meet two demands from U.S. compensation czar Kenneth R. Feinberg. One of is to scale back the size of the bonuses. By paying the employees less than they had been promised, the company is also seeking to compensate for $26 million that Financial Products employees had previously said they would return by the end of last year, but did not.