American International Group Inc. says it will end 14 voluntary deferred compensation programs so the participants no longer have to leave the company to cash out.
AIG, New York, says it will give the $500 million in earned but deferred pay stored in the programs back to the 5,600 employees, independent agents and sales representatives who deferred the pay.
The distributions will go out in the first quarter of 2009, AIG says.
Any participant who leaves the company for any reason is entitled to take out the deferred pay, AIG says.
“Many AIG employees have seen their life savings wiped out in the financial crisis,” Andrew Kaslow, a senior vice president at AIG, says in a statement. “Employees are now concerned about obtaining the pay they have earned but deferred so they can pay for retirement, college tuition or other expenses.”
The possibility that employees might leave simply to collect the deferred pay “is a concern at a time when AIG is working to maintain the value of its businesses, whether those businesses are to be sold to repay AIG’s Federal Reserve loan or to be continued as part of a restructured AIG,” the company says.