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AIG's Top Lawyer Tells Pay Czar 'Hands Off My Paycheck'In another dust-up in American International Group's battle with the government over executive pay, The Wall Street Journal reported Monday that GC Anastasia Kelly and four other high-ranking executives had written notices that they would resign by the end of the year if the government significantly cut their compensation. An AIG spokesperson, however, said the executives never threatened to resign. Rather, they had written the notices in an effort to protect their executive severance packages.
Corporate Counsel2009-12-08 12:00:00 AM
Anastasia Kelly, general counsel of American International Group, is at the center of another dust-up in the insurer's ongoing battle with the government over executive pay.
The Wall Street Journal reported Monday that Kelly and four other high-ranking executives at the insurer said last week in written notices that they would resign by the end of the year if the government significantly cut their compensation.
AIG spokesperson Christina Pretto, however, told Corporate Counsel that Kelly and the other executives never threatened to resign. Rather, they had written the notices in an effort to protect their rights to collect executive severance packages, which they worried new government regulations might eliminate. "No one threatened to quit or has quit," Pretto said.
According to the Wall Street Journal, people familiar with the matter told the paper Kelly asked other employees to say they were prepared to resign, and four executives agreed. But Pretto says Kelly simply advised the executives about how to protect their rights under AIG's executive-severance plan. Kelly has been AIG's general counsel since 2006.
It's just the latest skirmish between AIG and Kenneth Feinberg, the government's compensation czar, who is responsible for setting pay limits for top executives at the U.S. companies that received the most federal bailout money. The government owns 80 percent of AIG after giving the insurer $182 billion in financial support, making it one of the biggest recipients of government aid.
Feinberg has already cut the compensation of AIG's top 13 employees by more than half and limited most base salaries to no more than $500,000. Now he's working on new pay structures for the company's 75 highest-paid employees.
Robert Benmosche, AIG's recently appointed CEO, threatened to quit last month over pay limitations for the company's top executives. And Benmosche's frustrations are valid, said Ernest Patrikis, AIG's general counsel from 1999 to 2006 who's now a partner at White & Case in New York.
Benmosche might not want to keep all of the executives who have reportedly threatened to quit, Patrikis said. But even if he wanted to hire a new leadership team, government-imposed salary caps would make it hard to recruit top talent. "He should have the ability to pick the senior staff that he wants," Patrikis said. "And this just puts him between a rock and a hard place."
According to the Journal, the other executives involved are Rodney Martin, who heads one of AIG's international life-insurance businesses; William Dooley, who has been overseeing the financial-services division; Nicholas Walsh, head of AIG's international property-and-casualty-insurance businesses; and John Doyle, head of the U.S. property-casualty business. Walsh and Doyle rescinded their notices this weekend, the Journal reported.