American International Group Inc., the insurer getting a $152 billion federal bailout, in a regulatory filing late on Tuesday disclosed it would pay roughly $3 million to several executives under deferred compensation plans that are being terminated.
AIG said last week that it would terminate plans totaling $503 million in deferred compensation because it did not want to provide an incentive to employees to quit the company.
The additional disclosure follows New York Attorney General Andrew Cuomo’s writing to the insurer on Tuesday to ask for information on any bonuses or salary raises for 2008.
Executive pay at AIG and other financial institutions that have recorded large losses is coming under increasing scrutiny from investors, who have endured plummeting stock values, and lawmakers, who are bailing out the strapped firms.
AIG’s shares have lost nearly all their value in recent months. They closed at $1.95 on Tuesday, off a year-high of $62.29.
AIG last week said the monies being paid under the deferred compensation were previously earned, and had no connection to the federal bailout.
AIG plans to pay the deferred funds, earned under the plans, in the first quarter of 2009. The funds will remain invested and accrue earnings until that time, according to the company’s filing with the U.S. Securities and Exchange Commission.
Jay Wintrob, an executive in the company’s life operations, has accrued about $1.9 million under the plan. David Herzog, the company’s newly appointed chief financial officer, is due about $371,000, AIG said.
Five others, including investment executive Win Neuger, will together receive roughly $800,000 under the plans, AIG said.
Deferred compensation plans allow employees to postpone taking some of their pay. This lets them defer taxes, sometimes until retirement, when their tax brackets might be lower. AIG said it recently employed about 116,000 people.
AIG recorded more than $42 billion in net losses in the last year. The losses stemmed largely from credit default swaps tied to the performance of risky mortgages.
AIG’s bailout package was originally $85 billion, but ballooned to $152 billion when it became clear the lower amount would not be enough. As part of the rescue, the government took a nearly 80 percent stake in the insurer.
(Reporting by Lilla Zuill; Editing by Phil Berlowitz)