AIG unit agreed to accept US$20m in cuts
By Paritosh Bansal |
February 4, 2010, Thursday
|
Print Edition
Print Edition
AIG said on Tuesday that current and former employees of its Financial Products unit had so far agreed to accept cuts totaling about US$20 million in retention payments, short of a US$26 million target.
Separately, the insurer, which was bailed out with a US$182.3 billion United States aid package, also named Thomas Russo, a former top Lehman Brothers Holdings Inc lawyer, as its general counsel along with other appointments.
Russo fills the general counsel position that became vacant on December 30, when Anastasia Kelly resigned in protest over pay curbs imposed at the firm by US pay czar Kenneth Feinberg.
The cuts in retention payments to employees of the unit come after pressure from Feinberg and a public outcry last March, when AIG paid US$165 million to employees of the unit behind the insurer's near collapse.
Following the criticism, some employees of the unit said they would pay back US$45 million from the retention payments they received in March 2009, but AIG got only US$19 million back, putting it under pressure to recover the remaining money.
It asked the unit's current and former employees to make up for the difference by taking cuts from the US$195 million in retention payments that are due this March.
AIG said it had decided to make the reduced retention payments to staff who had agreed to the cuts.
Separately, the insurer, which was bailed out with a US$182.3 billion United States aid package, also named Thomas Russo, a former top Lehman Brothers Holdings Inc lawyer, as its general counsel along with other appointments.
Russo fills the general counsel position that became vacant on December 30, when Anastasia Kelly resigned in protest over pay curbs imposed at the firm by US pay czar Kenneth Feinberg.
The cuts in retention payments to employees of the unit come after pressure from Feinberg and a public outcry last March, when AIG paid US$165 million to employees of the unit behind the insurer's near collapse.
Following the criticism, some employees of the unit said they would pay back US$45 million from the retention payments they received in March 2009, but AIG got only US$19 million back, putting it under pressure to recover the remaining money.
It asked the unit's current and former employees to make up for the difference by taking cuts from the US$195 million in retention payments that are due this March.
AIG said it had decided to make the reduced retention payments to staff who had agreed to the cuts.
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