Beleaguered insurer to freeze Sullivan’s severance payments and bonuses.
AIG plans to freeze about £11.7m in compensation payments to Martin Sullivan, the company’s British former chief executive, the Financial Times reported.
Sullivan will also have some company as the stricken insurance group, which was rescued by the US government last month, also agreed to block about $600m of deferred compensation and bonuses that were destined for executives of AIG Financial Products. This is no surprise considering it was this company whose losses sent the group into collapse.
Quoted in the FT, Andrew Cuomo, the New York attorney general, said in a letter to AIG current chief executive Edward Liddy: “The American taxpayer is now supporting AIG, making the preservation of these taxpayer funds a vital obligation and a priority responsibility of your company.”
The move is part of AIG’s co-operation with Cuomo’s investigation, and its agreement not to pay improper funds to senior managers “until taxpayers are repaid with interest . . .”.
It’s expected that Cuomo could also investigate other firms that take government funds.
