AIG’s Benmosche assures staff nobody will repay anything
AIG chief executive Robert Benmosche told employees that US pay czar Kenneth Feinberg will not claw back compensation, Reuters reports
"It is important that all of you know that the Special Master's jurisdiction is quite limited, and we expect Feinberg's upcoming decisions on compensation to cover only the top 25 employees at AIG," Benmosche said in an internal memo.
The company is in "direct, near-daily discussions" with Feinberg, who has told AIG he will not seek retroactive salary adjustments.
Promises broken
Bloomberg reported that four of five managers in AIG’s Financial Products unit that are under the jurisdiction of pay master Kenneth Feinberg didn’t make good on pledges to return the bonuses as of August. The fifth employee hadn’t made any promise, Feinberg said.
“The performance of AIG Financial Products has contributed significantly to the deterioration in AIG’s financial health,” Feinberg said. Compensation proposed by AIG for the staff doesn’t “adequately reflect the role of AIG Financial Products” in the decline of the insurer, he said.
In an August report to the pay master, AIG proposed paying the five workers a total of $13.2m, Feinberg said. The insurer suggested increasing the Financial Products executives’ base salaries to as much as $950,000 and awarding bonuses of as much as $2.6m.
The executives should return the bonuses and will receive only their cash base salaries through 2009, Feinberg said. He is in “ongoing discussions” with AIG regarding these workers, he said.
