American International Group Inc. remained locked in last-minute discussions with former employees of its financial-products unit as it attempted to extract $5 million in retention payments, according to a person familiar with the matter. These discussions, which have intensified in the last two weeks, come ahead of a Monday deadline. That is when AIG has to give these retention payments, or bonuses, to employees who left the company after parts of the financial-products business were wound down or sold. Failure to reach an agreement would result in AIG, which is 80% owned by the U.S. government, falling short of its stated goal to recoup $45 million in controversial retention payments made to employees at the financial-products unit. That unit was responsible for the soured trades that precipitated the government rescue of the company. "We continue to work on getting to that $45 million figure," said Mark Herr, an AIG spokesman. "We're confident that we will get there." So far, AIG employees, mostly current and some former, have agreed to return $40 million.[Read more...]