New York Attorney General Andrew says he hopes American International Group Inc. will set a new standard for corporate culture at financial services firms that are getting help from the government.
Cuomo has released a copy of a letter that he sent today to AIG Chairman Edward Liddy.
In the letter, Cuomo says he is writing to confirm that AIG, New York, has agreed to freeze any payments owed under a $19 million contract with Martin Sullivan, a former AIG chief executive.
Cuomo also asks for confirmation that AIG has agreed that no payments will be made out of the $600 million compensation and bonus pools associated with the AIG Financial Products Corp. subsidiary.
AIG Financial Products, London, sold credit default swaps.
Huge collateral calls at the unit triggered the recent cash crunch that forced AIG to seek emergency financing from the Federal Reserve Bank of New York.
“To be clear,” Cuomo writes, “it is my position that until the taxpayers are repaid with interest the more than $120 billion that has been used in the rescue financing of AIG, no funds should be paid out of these pools to any executives….I believe that rebuilding trust in our capital markets requires executive compensation packages that are rational, fair, and based on bona fide performance measures that are disclosed to the public.
Cuomo says he hopes the different tone Liddy is setting at AIG “will set a new standard for corporate culture at similarly situated firms.”