WASHINGTON BUREAU — The Treasury special master on compensation has ordered that the cash salaries of the 25 top executives at American International Group Inc. (NYSE:AIG) and other companies receiving large amounts of government help be cut by one-third on average from 2009 levels.
Total pay for executives at AIG, New York, and two other companies will be 15% lower than what the executives received in 2009.
Kenneth Feinberg, the special master, has given those orders in rulings on 2010 pay for companies that received “exceptional compensation” under government programs implemented after September 2008 to aid large companies in financial distress.
“Total pay decreased even including the value of the long-term stock the Special Master is requiring executives to hold over the long term,” Feinberg says.
But Feinberg says he has ordered the cash salaries paid at the AIG Financial Products unit frozen.
He also says he has ordered that pledges to repay bonuses by employees be honored, and that all additional compensation at the AIG Financial Products unit be made in stock that must be “held over time.”
AIG officials declined to comment.
Sources familiar with the situation say both current and former AIG Financial Products employees have agreed to repay $45 million in bonuses, and AIG has “gotten most of that back.”
The sources also say that AIG is winding down the financial products unit, and letting employees go as work volume declines.
Feinberg also released a letter he sent to request information about compensation paid to the ‘Top 25′ executives at each firm that received assistance under the Troubled Asset Relief Program before Feb. 17, 2009.
Feinberg plans to use the information obtained in the ‘look back’ review required by the American Recovery and Reinvestment Act of 2009. He says he will use responses to the letter to determine whether any payments were inconsistent with the public interest.