New York: Five top executives at troubled insurer American International Group (AIG) said last week they will quit if their compensation is cut significantly by the US pay czar, says a media report.
Attributing to people familiar with the matter, The Wall Street Journal said that five senior AIG executives indicated on 1 December, in written notices, that they’re prepared to leave by year-end.
The threat is the latest in the running fracas between AIG and the government’s compensation czar, Kenneth Feinberg, who is charged with setting pay limits for top executives in companies receiving the most federal bailout money.
AIG had received funds to the tune of overUS $180 billion at the height of the global financial crisis last year.
Among AIG executives prepared to resign are its general counsel, Anastasia Kelly, and the heads of some of its largest insurance businesses, the report said, adding two of them changed their minds over the weekend to leave the firm.
“The executives are worried that their 2009 pay will be clipped, and that they will be subject to even tougher restrictions in 2010, including a prohibition against collecting so-called golden-parachute severance payments that they are currently eligible for,” the daily said.
The company’s recently hired chief executive Robert Benmosche threatened to quit last month reportedly amid frustrations over limitations on pay for top AIG executives.
Feinberg has reduced average compensation for the 25 top earner employees at companies that received government funds and is working on pay structures for the next 75.
In October, Feinberg reduced 2009 compensation for AIG’s top 13 employees by 57 per cent, including limiting most base salaries to no more than US $5,00,000. Those 13 executives were the ones who remained of the 25 top 2009 earners at AIG, whose pay Feinberg was ordered to review.