Posted on 01 Mar 2010
The chairman of the American International Group Inc. (AIG) wrote in a letter to the insurer’s shareholders that the firm has sometimes been hurt by government-imposed compensation limits, yet anticipates being supported by the government for “some time.”
The letter by AIG's chairman, Harvey Golub, was posted to AIG's website on Friday. In it, he also announced the retirement of Dennis Dammerman, the AIG director who oversaw the hiring of current chief executive Robert H. Benmosche.
As Bloomberg News poinouts out, Kenneth R. Feinberg, the special master in charge of compensation at some of the big bailed-out financial firms, has imposed a $500,000 ceiling on the base salary of most AIG workers.
Here’s more from Mr. Golub about the AIG. pay caps:
The board has been intently focused on working with the FRBNY and the U.S. Department of the Treasury as well as dealing with the pay guidelines imposed by the Special Master, who has ultimate authority over a number of major compensation decisions. While we can pay the vast majority of people competitively, on occasion, these restrictions and his decisions have yielded outcomes that make little business sense. For example, in some cases we are prevented from providing market competitive compensation to retain some of our own most experienced and best executives. This hurts the business and makes it harder to repay the taxpayers.
Mr. Golub also lists a litany of new AIG appointments, from directors to senior executives like Peter Hancock, who will oversee finance, risk and the notorious Financial Products division; Thomas J. Russo, the firm’s new general counsel and former top lawyer at Lehman Brothers; and Sandra Kapell, who will manage AIG's new performance measurement system.