AIG Says Senior Executives Won’t Get $3 Million Deferred Compensation

January 8, 2009

American International Group Inc., the insurer getting a $152 billion federal bailout, said Wednesday that senior executives will not be given a $3 million payment that was to have been distributed by April.

In a filing with the U.S. Securities and Exchange Commission, AIG said it will still pay out about $273.5 million to current, non-senior employees who took part in a deferred compensation scheme that allowed funds to be set aside and drawn in later years.

AIG said in November it planned to accelerate payment of these funds in a bid to limit departures after the company posted $42.5 billion in losses over the past four quarters, putting it on the verge of collapse.

The plan has drawn the ire of some lawmakers, including U.S. Rep. Elijah Cummings, who upbraided management for the decision, saying it would line the pockets of some senior executives and employees who no longer work for AIG.

In addition to senior executives, former employees and agents will also not receive accelerated payments. The total that was to have been paid to these individuals was $90.3 million.

Employees at AIG can no longer make deferrals to the plan but participants’ who continue to have funds in the scheme after April will remain invested and continue to accrue interest until distribution, AIG added.

(Reporting by Lilla Zuill; Editing by Andre Grenon)

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