AIG Pays Former CEO Sullivan a Severance Package Worth $47 Million

July 1, 2008

American International Group Inc. said it paid a $47 million severance package to former Chief Executive Martin J. Sullivan, whose resignation took effect Tuesday.

Sullivan, who left his position in mid-June after two quarters of record losses at AIG, will receive severance of $15 million, and a bonus of $4 million for the portion of the year he worked, according to a regulatory filing.

Sullivan also will hold on to outstanding equity and long-term cash awards valued at about $28 million, the filing said.

His resignation is being treated as for "good reason" meaning he is entitled to the severance package outlined in his employment agreement but contingent on his not competing with AIG for business for one year.

Sullivan, who worked at AIG for 37 years, also will be provided an office and an assistant until the end of December.

(Reporting by Dan Wilchins; additional reporting by Phil Wahba; editing by Carol Bishopric)