AIG Cuts $19 Million Golden Parachute Strings of Former CEO
NY Attorney General says Martin Sullivan won't be paid until taxpayers refunded.
October 22, 2008— -- AIG says it will freeze millions of dollars of payments to former CEO Martin Sullivan and other top executives, according to an agreement reached with New York Attorney General Andrew Cuomo.
Sullivan, who left AIG in June, was due to be paid about $19 million as well as other benefits.
Cuomo is currently investigating AIG for "unwarranted and outrageous" executive payouts after the company received billions of dollars in rescue money from taxpayers.
"The American taxpayer is now supporting AIG, making the preservation of these taxpayers funds a vital obligation and a priority responsibility of your company," Cuomo said in a letter sent to current AIG CEO Edward Liddy. (click here to read letter)
AIG has also agreed that no money will be paid out from a $600 million compensation and bonus pool for AIG's Financial Products subsidiary. The London-based subsidiary has been blamed for the losses that forced to company to near bankruptcy. Joseph Cassano, the former head of the subsidiary, was due to receive almost $70 million dollars from the pool and other top executives at AIG Financial Products stood to share in another $93 million, according to Cuomo.
When contacted by ABCNews.com, AIG confirmed the terms as outlined in Cuomo's letter to Liddy.
"The letter is consistent with our discussions with the Attorney General and with actions we have taken," said AIG spokesperson Peter Tulupman.
In his letter, Cuomo applauded Liddy for "the different tone you are setting at AIG," but cautioned that "until the taxpayers are repaid with interest the more than $120 billion that has been used in the rescue financing of AIG, no funds should be paid out of these pools to reward executives ahead of taxpayers."