Officials at the embattled insurance company, which has received more than $170 billion in taxpayer money, have sought meetings with Kenneth Feinberg, the pay czar, to review the payments for 40 of its highest ranking employees, according to individuals briefed on the matter.
Mr. Feinberg has been tasked with approving the pay for the 100 highest paid employees, but he also can also weigh in on other matters if a company requests.
A.I.G. executives want to make sure that Mr. Feinberg is comfortable with the company’s compensation program and hoped to work with him to address any shortfalls, according to a person briefed on the situation. The insurance giant does not actually need his permission. But by obtaining Mr. Feinberg’s blessing, the company would also have the political cover to shield it from criticism.
The move also allows the Treasury Department to wash its hands of any problems stemming from any role it had in setting pay.
The payments stem from 2008 bonuses that were retooled last year to keep executives from leaving the troubled company. About $9.6 million in bonuses was allocated to 40 executives, with roughly half of money paid in March and the rest scheduled to be paid out on July 15 and in mid-September so long as the employees met certain requirements. That would be an average payment of roughly $60,000 for each employee in both months.
Christina Pretto, an A.I.G. spokeswoman, declined to comment. Mr. Feinberg could not be reached for comment late last night.
Besides the current bonus payments, A.I.G. executives have also been seeking his guidance in other controversial areas, the individual briefed on the situation said. A.I.G. has sought his advice in determining compensation for employees in its Financial Products unit, whose trading of high-octane derivatives brought the company to its knees. It is also seeking advice on the retention bonus program it put in place last fall.
A.I.G. officials have struggled to balance the need to retain executives and traders who can unwind its trading positions and sell its businesses against the public’s outrage that those employees would be paid bonuses at all. In the spring, lawmakers erupted after learning that A.I.G. planned to pay more than $165 million to executives in that unit, an amount that was reduced when some were pressured to give the money back.
Ever since, the insurance company, which is nearly 80 percent owned by the government, has been treading a fine line. And it is not the only financial company to seek advice.
Since early June, Mr. Feinberg, who oversaw the federal government’s compensation fund for victims of the September 11 terrorist attacks, has been meeting with Citigroup, Bank of America and others that received at least two federal bailouts. Those companies, along with General Motors, Chrysler, and A.I.G., are required to submit detailed packets of information for his review in the next month.
“Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk taking,” said Andrew Williams, a Treasury spokesman.
SOURCE is NYTimes.com