Bailout pay czar OKs $4.3-million boost for AIG exec
Bailed-out insurer American International Group today got permission to award $4.3 million in compensation to an employee who agreed to stay with the firm.
The employee, who wasn’t named, currently draws an annual salary of $450,000.
The pay boost approved by Kenneth Feinberg, the Obama administration’s pay czar for companies that have gotten huge federal bailouts, shows the pressure Feinberg faces to allow total compensation for key employees to far exceed the general $500,000 salary cap he has imposed.
From Bloomberg News:
Feinberg approved a deferred stock grant valued at $3.26 million and an annual long-term incentive award of as much as $1 million, according to a letter today to AIG released by the Treasury Department. The recipient is one of AIG’s top 25 managers and isn’t Chief Executive Officer Robert Benmosche, a Treasury official said.
“AIG has indicated that the employee is critical to AIG’s long-term performance and stability, and that his continued employment by AIG will significantly aid AIG’s ability to repay the taxpayer,” Feinberg said in the letter to Benmosche.
Benmosche, who was picked in August to lead AIG out of its financial morass, has been adamant about the need to pay competitive salaries to the insurance company’s key people, or risk losing them. He reportedly threatened to quit in November over “frustration” with negotiations on pay issues, but then announced that he was “totally committed” to the company.
"We are all working aggressively to overcome this compensation barrier that stands in the way of restoring AIG's value and allowing us to live up to our obligations to all stakeholders," Benmosche said in a memo to employees on Nov. 11.
AIG shares today fell to their lowest closing level since mid-August. The stock slipped 13 cents to $28.06. The price rose as high as $50.23 in late August, egged on by Benmosche's hopeful tone about some value being left for shareholders once Uncle Sam is repaid in full.
On Sunday, however, Benmosche told the Financial Times that he expected to take at least two years to divest businesses and earn enough from remaining operations to buy out the government's 80% stake.
-- Tom Petruno