AIG Bonuses to Be Rescinded in Part, CEO Pledges

Updated from 11:35 a.m. EDT

AIG (AIG Quote) CEO Edward Liddy on Wednesday told lawmakers the company was working to secure the return of at least half of the controversial retention bonuses awarded to top executives.

Liddy, addressing a hearing of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, said the embattled insurer has asked executives in its Financial Services unit who had received bonuses of more than $100,000 to return at least half the amount. AIG, which has received $170 billion in federal bailout money, more than any other private company during the current economic crisis, has come under fire for handing out $165 million in bonuses.

Some of the executives have already agreed to give back 100% of the bonuses, Liddy said. The company would work to ensure the maximum participation possible, he said.

Liddy, who took the reins of the giant insurer in the fall after the bonuses had already been pledged to the executives, called the payments distasteful, but said the company was obligated legally to pay them. Liddy has not received a bonus.

"We are meeting today at a high point of public anger," Liddy said. "I share that anger," he said.

AIG has come under fire from lawmakers on both sides of the aisle, regulators and the public since the existence of $220 million in bonuses were widely reported over the weekend. The most recent retention payments -- ranging from $1,000 to nearly $6.5 million -- of $165 million began to be paid last Friday.