Five AIG executives in threat to quit over pay row
Tuesday 08 December 2009
Anastasia Kelly. Rodney Martin. William Dooley. Nicholas Walsh. John Doyle. These are the five senior executives at AIG who threatened last week to quit the government-owned insurer if their compensation is cut by the Obama administration's pay tsar, sparking a new public furore in the US over bonuses at bailed-out companies.
The ultimatum, which two of their number rescinded over the weekend, comes ahead of a new round of pay curbs to be demanded by Kenneth Feinberg, appointed by the White House to rewrite pay policies at the firms that received repeated infusions of taxpayer cash during the credit crisis.
Mr Feinberg has already limited pay and bonuses for 2009 for the 25 best-paid executives at AIG and is set to rule on 2010 contracts in the next two weeks. The recalcitrant executives are fighting to protect "golden parachute" provisions that entitle them to payouts if they quit before the end of this year.
The Wall Street Journal splashed the five names on its front page yesterday, reflecting how AIG has become a lightning rod for public anger over pay. It is also being watched closely on Wall Street to see what the effects of imposing big pay cuts might be on its ability to hire or retain talent – and critics of government intervention point out that more than half of its top 25 earners have quit in the past year. Robert Benmosche, recently installed as chief executive, tendered his own resignation in a fury over pay caps, but was persuaded by the board to stay.
AIG's financial products division, which traded in credit derivatives, threatened to pull down the entire financial system when it came close to collapse in September 2008. The company was nationalised and infused with $180bn in taxpayer loans.
None of the executives commented publicly yesterday, and nor did AIG.
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