Chicago — The greater press is reporting that American International Group Inc. agreed to freeze $19 million due to its former chief, and $600 million in compensation for other executives amid criticism of such payments in light of the collapsed insurer's U.S. bailout.
While AIG has not publicly confirmed this, Attorney General of the State of New York, Andrew Cuomo sent a letter to Edward Liddy, the CEO of AIG. The letter sets forth that: (1) AIG will freeze any payments under former-CEO Martin Sullivan's $19 million contract; and (2) AIG has confirmed that no payments will be made out of the $600 million compensation and bonus pools of the Financial Products subsidiary. The letter also states the Attorney General's position that taxpayers should be repaid before any executives and that new executive pay structures should eliminate improper incentives.
Cuomo states in his letter, “It is my understanding that Joseph Casano, the former head of this subsidiary, has a share totaling approximately $69 million of these funds. In addition, after Casano, five other top executives in AIG Financial Products have a combined share in these funds totaling approximately $93 million. The Financial Products subsidiary was largely responsible for AIG’s collapse, and Casano has been terminated.”
According to Bloomberg.com, Peter Tulupman, an AIG spokesman, declined to comment other than to say Cuomo's letter today to the company's new chairman and Liddy, is “consistent with our discussions with the attorney general and with actions we've taken.''
Source: Bloomberg.com and New York State Attorney General
