Special Report: Global Financial Crisis

    WASHINGTON, March 18 (Xinhua) -- U.S. mortgage giants Fannie Mae and Freddie Mac plan to pay retention bonuses to their executives while the government and Congress are seeking ways to strip American International Group executives of hefty bonuses.

    The government-controlled Fannie Mae plans to pay bonuses of at least one million dollars to four key executives in an effort to keep hundreds of employees from leaving the company, according to news reports on Wednesday.

The corporate logo for Freddie Mac is seen at its headquarters building in McLean, Virginia, July 23, 2008.(Xinhua/Reuters File Photo) Photo Gallery>>>

    Freddie Mac was reported to be planning similar awards. Like Fannie Mae, Freddie Mac is a government-sponsored finance company created to encourage home ownership by lowering mortgage rates.

    Together, the two companies own or guarantee more than half of the home loans in the United States.

    Hobbled by skyrocketing loan defaults resulting from the worst financial crisis in decades, Fannie Mae recently requested 15 billion dollars in federal aid while Freddie Mac has sought a total of almost 45 billion dollars.

    Fannie Mae disclosed its "broad-based" retention program in a recent regulatory filing with the Securities and Exchange Commission.

    The company was only required to disclose the amounts for the top-paid executives, who will pocket at least 470,000 dollars on top of their base salaries.

    The bonuses were authorized last year by the Federal Housing Finance Agency, which seized control of Fannie Mae and Freddie Macin September and ousted the companies' former CEOs.

    "It was critical to retain their most important asset -- their employees -- who are being asked to play a vital role in the nation's economic recovery," the agency's director James Lockhart said in a statement.

    "As the previous senior management teams left, it would have been catastrophic to lose the next layers down and other highly experienced employees," Lockhart said.

    On Wednesday, U.S. President Barack Obama said he will ask Congress to pass legislation giving the administration greater regulatory authority over financial institutions like AIG.

    He assailed AIG's business practices and the millions of dollars in executive bonuses it paid out even as it was 170 billion dollars in debt to government bailouts.

    Charles Rangel, chairman of the House's the Ways and Means Committee, said Wednesday that the House plans to take up a bill Thursday that would impose a 90 percent tax on bonuses paid to top-earning employees at AIG and other companies receiving big government bailouts.

    Under this bill, tax would hit employees who are making more than 250,000 dollars a year, the head of the tax-writing committee said.

    The AIG, which is now 80-percent owned by the U.S. government, lost 61.7 billion dollars in the fourth quarter of 2008, marking the largest corporate loss in history.

    However, the financial strapped company distributed 55 million dollars in December and 165 million dollars had to be paid this month.

    Testifying under oath at a congressional hearing on Wednesday, Edward Liddy, chairman and chief executive officer of AIG, called on top-earning employees to voluntarily return at least half of the bonuses.

    Some employees have already stepped forward to give money back, he said.

AIG bonus causes uproar at time of bailout 

    NEW YORK, March 17 (Xinhua) -- American International Group (AIG), the largest U.S. insurer under water, has become a public spitting target after it revealed a 165-million-U.S. dollar bonus package to its executives.

    Meanwhile, as details of the scandal were uncovered, Barack Obama's administration scrambled to assign blame for the payouts. Full story


Geithner: AIG to pay back government for hefty bonuses 

     WASHINGTON, March 17 (Xinhua) -- U.S. Treasury Secretary Timothy Geithner said Tuesday that the troubled insurance giant American International Group (AIG) is to pay back the government for hefty bonuses it paid out to its executives.
     "We will impose on AIG a contractual commitment to pay the Treasury from the operations of the company in the amount of the retention awards just paid," Geithner said in a letter to lawmakers. Full story

U.S. lawmakers move to strip AIG executives of bonuses

    WASHINGTON, March 17 (Xinhua) -- Lawmakers at U.S. Congress vowed on Tuesday to all but strip executives of the troubled American International Group (AIG) of their 165 million dollars in bonuses.

    House and Senate Democrats were crafting separate bills to tax up to 100 percent of generous bonuses awarded by AIG and other companies rescued by taxpayer money, according to U.S. media reports. Full story

Obama slams AIG for paying bonuses to executives

U.S. President Barack Obama (L) and Treasury Secretary Timothy Geithner arrive in the East Room of the White House in Washington March 16, 2009 to make announcements on helping small business during the economic crisis. (Xinhua/Reuters Photo) Photo Gallery>>>

    WASHINGTON, March 16 (Xinhua) -- U.S. President Barack Obama on Monday blasted insurance giant American International Group and pledged to try and prevent it from giving its executives 165 million dollars in bonuses after taking billions in federal bailout funds.

    "It's hard to understand how derivative traders at AIG warranted any bonuses, much less 165 million dollars in extra pay," Obama said at the outset of an appearance to announce a plan to boost small businesses loans. Full story

Obama administration unveils plan to unlock credit for small businesses

    WASHINGTON, March 16 (Xinhua) -- The Obama administration on Monday unveiled a plan to help unlock credit for the nation's small businesses, which have generated about 70 percent of net new jobs annually over the past decade.

    "We are taking immediate action to help ensure that credit -- the lifeblood of America's small businesses and its economy -- gets flowing again to entrepreneurs and business owners," said U.S. Treasury Secretary Timothy Geithner, who with President Barack Obama unveiled the plan at the White House. Full story

Report: AIG to pay millions in bonuses despite gov't pressure

    WASHINGTON, March 14 (Xinhua) -- Insurance giant American International Group, which has received 173 billion U.S. dollars in federal bailout cash, will still give its senior employees tens of million of dollars in bonuses, The Washington Post reported. Full story

White House: Latest aid to AIG is critical

    WASHINGTON, March 2 (Xinhua) -- The U.S. government's latest aid to the troubled insurance giant American International Group (AIG) is critical, White House spokesman Robert Gibbs said Monday.

    While answering questions raised by reporters, Gibbs did not rule out future help for the ailing insurer. Full story

AIG to get additional $30 bln aid from U.S. gov't

    NEW YORK, Mar. 1 (Xinhua) -- American International Group Inc. (AIG) will receive up to an additional 30 billion U.S. dollars in federal assistance as part of the latest revamp of its government bailout, the Wall Street Journal reported Sunday.

    The new funding is intended to support AIG as it absorbs 60 billion dollars in quarterly losses and operational and competitive upheaval. Full story