AIG to shoot down CFO’s golden parachute

New York Attorney General Andrew M. Cuomo and American International Group Inc.’s chief executive have agreed on measures to recover what Mr. Cuomo called illegal expenditures and deflate a $10 million parachute for the firm’s departing finance chief.
Chief executive Edward M. Liddy and the attorney general met at Mr. Cuomo’s offices yesterday, a day after the attorney general sent out a sternly worded letter calling for New York-based AIG to recover improperly paid bonuses and perks or face legal action.
Mr. Liddy agreed to provide the attorney general’s office with an accounting of the compensation it paid to senior executives and to assist Mr. Cuomo in recovering illegal expenses.
Those include money paid to Martin Sullivan, ex-chief executive of AIG, and Joseph Cassano, former head of the financial-products unit.
In a joint statement issued by AIG and the Attorney General’s Office, the insurer said that it had also agreed to cancel 160 conferences and events for a total savings of more than $8 million.
One of the events, a “best-operator” conference to take place in Las Vegas, would have cost about $750,000.
AIG has also agreed to establish a special governance committee to institute new expense management controls.
The new controls will be designed by the company’s board to prevent unwarranted expenses in the future, including salaries, bonuses, severance pay and perks.
Richard Booth, AIG’s chief administration officer, will directly supervise these measures.
Steven Bensinger, departing executive vice chairman and chief financial officer at AIG, won’t receive any payments from the insurer, pending Mr. Cuomo’s review.
The severance pay would have been in the $10 million range, according to published reports.
Mr. Bensinger, who resigned Oct. 9, will be replaced by David L. Herzog, who was AIG’s comptroller.
A call to AIG wasn’t immediately returned.

Related Topics: American International Group (AIG)