The American International Group (NYSE: AIG) bonuses controversy took a turn for the bizarre today, when The Financial Times reported that the company had paid $168 million in bonuses and retention payments to 400 employees in the troubled financial products unite between December 2008 and March 2009.

And $7,700 of that amount went to a kitchen assistant.

Look: The point here is not to beat up on "the little guy" and in the grand scheme of AIG's malfeasance, $7,700 to a kitchen assistant isn't that big of a deal.

Robert Benmosche has been CEO of American International Group (NYSE: AIG) for less than a month, but he's already established a reputation as an arrogant jerk -- which is exactly not what AIG needs at this particular moment in history.

Benmosche drew some sharp criticism for his comment that New York Attorney General Andrew Cuomo "doesn't deserve to be in government" and his comment that he will deal with "all those crazies down in Washington."

Those are pretty ambitious comments given that he and every single AIG employee around the globe literally owe their jobs to an unprecedented episode of taxpayer largesse -- brought to you by, at the expense of much well-deserved populist resentment, those "crazies down in Washington."

Executive pay czar Kenneth Feinberg could approve the compensation package for income American International Group (NYSE: AIG) CEO Robert Benmosche as soon as next week.

According to The Wall Street Journal (subscription required), "Mr. Benmosche, a former CEO of insurer MetLife Inc., was pressing for a quick resolution in large part to energize AIG employees and show them that AIG employees could be well-compensated, according to people familiar with the matter."

American Internation Group's (NYSE: AIG) top earners enjoyed a luxurious retreat at the St. Regis Monarch Beach resort in Dana Point, Caifornia -- manicures, pedicures and luxury dining at a cost of $440,000, with the tab helpfully picked up by the United States taxpayers.

But apparently that wasn't enough to save the resort from the ailing economy, and the property went into foreclosure yesterday. The Wall Street Journal reports (subscription required) that "The resort has missed payments since April on a $70 million mezzanine loan from Citigroup. The resort's $230 million mortgage, held mostly by units of Prudential Financial Inc. and a hedge fund, isn't in default, according to people familiar with the matter."

Reports today indicate that American International Group, Inc. (NYSE: AIG) may need yet another bailout from the federal government. This time, The New York Post states that AIG will likely require additional government guarantees before it can successfully sell its International Lease Finance Corp. (ILFC) aircraft leasing business.

"Already, the government has agreed to guarantee $5 billion of debt, but those remaining in the auction now want either more government aid or support from airline manufacturers," reports the Post. The newspaper notes that ILFC carries a $30 billion debt load, portions of which will soon mature, along with $50 billion in assets. The unit, which has been up on the auction block since last September, has a book value of $7.5 billion.

AIG shares slipped more than 6% this morning to trade at $1.46, extending their 52-week swoon of 95.7%. After smacking into resistance from its 10-month moving average, the stock is now struggling to maintain a foothold atop its recently supportive 10-week trendline.

Even though the security is trading fairly low on the charts already, some traders are betting on continued losses from AIG. Despite a 16.4% drop in short interest during the most recent reporting period, shorted shares still account for a hefty 9.7% of the stock's available float. Plus, peak put open interest in the June series lies at the 2 strike, with 17,975 contracts in residence.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

A report today in The Wall Street Journal [subscription required] indicates that the restructuring of American International Group, Inc. (NYSE: AIG) could be a multi-year process.

The paper cites an internal email sent to AIG employees on April 23, which describes an initiative known as "Project Destiny." The dreamily named plan involves a 45-day review of the insurance issue's various units, which is then meant to generate a longer-term road map for the future.

While the internal memo explains Project Destiny as an "effort to redefine the future of most of the major businesses within AIG," Chief Restructuring Officer Paula Reynolds described the initiative in terms indicating that all AIG needs to regain its joie de vivre is a torrid island affair with a younger man. "Simply put, we are going to get our groove back," she enthused.

Maurice Greenberg, the former chairman of American International Group (NYSE: AIG), testified before the House Oversight and Government Reform Committee Thursday that the company should have been allowed to go into bankruptcy, and is unlikely to pay off taxpayers under the current plan.

"It is clear that the current approach has not worked and cannot work in today's environment. A.I.G., in my judgment, in the current plan, will not pay the taxpayers back," he told lawmakers.

He also said that an AIG bankruptcy would not have been as disastrous as many had feared. "There would have been a ripple, but it wouldn't have been catastrophic," Mr. Greenberg said. "I don't think it would have been disastrous."

Plenty of investors have been calling for General Motors Corporation (NYSE: GM) to be removed from the Dow Jones Industrial Average (DJIA) as the automaker hovers on the brink of bankruptcy. But, like it or not, GM's rock-bottom share price isn't justification enough to oust the stock. GM still represents a major chunk of our industrial economy.

However, GM's nationalization would more than justify its removal from the Dow. After all, that's why American International Group (NYSE: AIG) got the boot last fall -- once the government took a controlling stake in the insurance giant, Dow Jones wasted no time adjusting its blue-chip lineup.

With pretty much everyone blasting the totally unearned bonuses at American International Group (NYSE: AIG), there was a need for someone to defend these poor bankers.

Describing the AIG-outage as "peasants with pitchforks, tossing around words like "communist" to describe people who are speaking out against rewards for failure, Rush Limbaugh came to to their rescue.

It's sort of weird that Limbaugh would decide to take up such an indefensible cause, but here's the rebuttal to his argument: Without these bailouts, those bonuses would be toast. They wouldn't have gotten paid their bonuses and they would have lost their jobs. So this isn't a question of government intervention with executive pay but really a question of whether we ought to use taxpayer money to reward people who worked at a firm that has since required $160 billion in taxpayer handouts.

Check out The Young Turks' dismantling of Limbaugh's argument in the video below.

General Motors (NYSE: GM) has convinced 6,000 of its UAW employees to take buyouts of their contracts, more than doubling Barclays Capital's estimates.

The buyouts affect 10% of GM's UAW-represented workers and come at a steep cost: a $25,000 voucher to buy a new car and $20,000 in cash. Now it's not that I begrudge GM's hardworking employees who individually had nothing to do with the company's collapse, but I have to ask: Is it really fair to write them checks for $45,000, with payments made by the United States taxpayers who had nothing to do with GM's collapse.

With the public at large indulging in a fit of righteous indignation over the bonuses at American International Group (NYSE: AIG), some of the fat cats actually have the nerve to fight back. From the Financial Times:

Senior executives on both sides of the Atlantic on Friday warned of an exodus of talent from some of the biggest names in US finance, saying the "anti-American" measures smacked of "a McCarthy witch-hunt" that would send the country "back to the stone age."

The New York Times reports:

One A.I.G. executive, who spoke on the condition of anonymity because he feared the consequences of identifying himself, said many workers felt demonized and betrayed. "It is as bad if not worse than McCarthyism," he said. Everyone has sacrificed the employees of A.I.G.'s financial products division, he said, "for their own political agenda."

Connecticut Attorney General Richard Blumenthal has been pawing through the data on American International Group's (NYSE: AIG) post-bailout bonus payments, and he's uncovered a bit of a discrepancy. Blumenthal says that the bonus payments totaled $218 million -- more than 30% higher than the widely reported $165 million figure.

Blumenthal said he isn't sure of the reason behind the discrepancy, and AIG denies that the discrepancy exists. Either way, Blumenthal isn't happy about it.

With American International Group (NYSE: AIG) blowing more than $100 million of its $160 billion bailout on bonuses for bad executives, Senator Chuck Grassley is pissed off and saying some pretty outrageous things. Grassley opined that AIG executives should "follow the Japanese example" and "take that deep bow and say I'm sorry" and then either "resign, or go commit suicide."

CNBC commentator Rick Santelli is blasting the payment of $100 million plus in bonuses to executives at corporate train wreck American International Group (NYSE: AIG), but he's also drawing attention to what a side issue it is given the thousand-fold larger pile of cash we piled into that hellhole of a company.

"I think it's reprehensible, but I think the bigger issue is we're giving a lot of talk to the $165 million towel rack . . . I would like to see greater scrutiny given to the $165 billion house we now own."

My, how a day of reaction can change things. Late last night, Treasury Secretary Tim Geithner announced that American International Group (NYSE: AIG) will repay the taxpayers up to $165 million that it doled out as bonuses.

According to Geithner's letter to congressional leaders, the government can't block the payments -- which were contractually agreed to before the government's bailout.

However, the public's "considerable outrage" over the payments was an epiphany for AIG, causing the bank to agree to pay the Treasury an amount equal to the payments. The Treasury will then deduct that amount from the $30 billion in government assistance that the company is slated to receive.