AIG Delays Deferred Compensation

At the request of key congressional leaders, American International Group Inc. won’t immediately pay out $93.3 million in employee compensation to former employees and agents and certain executives.

“AIG took this action in response to concerns expressed by several members of Congress,” said a spokeswoman for AIG. “We believe this is a positive outcome that still allows AIG to address concerns some employees have about accessing pay that they had earned but deferred.”

In a joint statement issued Wednesday, January 7, Rep. Paul E. Kanjorski, D-Pennsylvania and chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government-Sponsored Enterprises, and Rep. Joseph Crowley, D-New York, who serves on the Ways and Means Committee, said that as a result of congressional inquiries, AIG decided to change a previously announced plan to terminate several deferred compensation plans and accelerate the payout of $367 million to several thousand AIG employees and agents.

AIG had said such actions were necessary to retain key employees.

Some members of Congress have been critical of what they regard as AIG being overly generous in compensating past and current employees after the company received federal backing of as much as $152 billion to avoid collapse.

The decision “is encouraging evidence of AIG’s willingness to work openly and cooperatively when reminded of its indebtedness to American taxpayers,” the congressmen said in the statement.

“By cooperating with the congressmen’s request, AIG realized that more than $90 million of the payouts would have gone to former employees and agents, and therefore would have no impact on retaining key personnel,” the statement said. “AIG volunteered to revise its payout plan so that it no longer applies to former employees and agents.”

The total includes $3 million in deferred compensation that would have been paid to certain executives in April.

Filed by Mark A. Hofmann of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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