Top Female AIG Executive Fights For Pay

Dec. 30, 2009— -- Before making partner at the law firm of Wilmer, Cutler & Pickering more than a decade ago, Anastasia Kelly once participated in a conference call while she was in labor delivering twins.

In 2006, after working seven days a week helping lead MCI WorldCom out of bankruptcy as general counsel, Kelly took a similar post at AIG in the chaotic wake of Hank Greenberg's departure as CEO amid a probe by then New York State Attorney General Eliot Spitzer.

Two years later, Kelly, known to friends as Stasia, found out the real meaning of chaos as AIG struggled to survive amid the most turbulent financial crisis in a century.

Kelly now finds herself in the public eye following news that she is going to collect millions from AIG in severance after she resigned rather than have her salary cut under rules set by President Obama's special pay master Ken Feinberg.

In a written statement today, AIG confirmed that Kelly had resigned "based on the reduction in her base salary that was mandated by the special master for executive compensation for TARP Recipients."

Kellys' resignation took effect today.

While most people on Main Street find it hard to understand how a top executive at troubled AIG could in good conscience accept millions after the massive bailout taxpayers gave the company, several businesswomen came to the defense of Kelly, the rare female Wall Street executive to earn as much as a man.

"Hooray for her," said Gail Evans, a former executive at CNN and the author of "Play Like a Man, Win Like a Woman." "Between the number of Wall Street women poised for leadership roles who were knocked off in the past year, not to mention the huge pay and title disparity in finance, here we have the rare exception. My question is when is this going to be the norm?"

Kelly could not be reached for comment. An AIG spokeswoman declined to comment.

The Wall Street Journal reported Tuesday that AIG had hired an outside law firm to review Kelly's activities in recent weeks when she explored legal options for herself and some other top executives seeking to protect severance benefits amid the administration's review of compensation for top executives, with cash salaries to be capped at $500,000.

Kelly, appointed vice chairman of the firm last year, and the other executives told AIG that they were prepared to resign if their pay were cut, prompting new decibel levels of outrage over financial industry fat cats who appeared tone deaf.

Kelly Worked 'Insane Hours' at AIG

One former AIG employee, speaking on condition of anonymity, said that in the past year Kelly, based in New York, had worked "insane hours," and disliked being apart from her family, including her twin boys, who are based in Washington, D.C.

"She's a very popular figure at AIG, a salt of the earth type who got along with everyone," the employee said. "After what she put up with, having risen to the top in a male dominated field, I guess she felt she had to stand up to the pay czar."

While there are no official statistics available on women on Wall Street, Catalyst, a nonprofit that studies women's advancement in business in general, said as of 2007 women only held 15 percent of Fortune 500 corporate officer positions, up from 11 percent a decade earlier.

"I am willing to bet that 40 percent to half of the total employees on Wall Street are female, yet females are virtually nonexistent at the highest levels," Evans said.

The handful of high-ranking Wall Street women took a hit in recent years. At Lehman Brothers, former CFO Erin Callan was shown the door by boss Dick Fuld amid growing turmoil there before Lehman's collapse.

Around the same time, at Morgan Stanley, top trading executive Zoe Cruz was forced out by then CEO John Mack.

A Boston native who attended Trinity College, Kelly attended George Washington University at night. Eventually she landed at the law firm of Wilmer, Cutler & Pickering, now Wilmer Hale.

In 2004, in an interview with online newsletter Bisnow, Kelly said that before she made partner to show how dedicated she was she did a conference call while in the labor room delivering twins, much to the horror of her male colleagues. After stints as top counsel for Sears Roebuck and Fannie Mae, Kelly joined MCI WorldCom.

"We were in total, utter chaos, but chaos can teach you," Kelly told Bisnow in 2004.

Female or not, as an executive at AIG, which has received $173 billion in total taxpayer assistance, Kelly will likely have more detractors than supporters.

"I wish it wasn't true, but on Wall Street women in senior roles remain rare," said Tanya Beder, a former CEO of a hedge fund that was part of Citigroup and the current chairman of the advisory firm, SBCC Group. "Given this and the spectacular costs the taxpayers may bear due to AIG, it isn't surprising she is in the limelight."

In AIG's statement announcing Kelly's resignation, AIG CEO Robert Benmosche thanked her for her "tireless service."

"We are exceedingly grateful for the work she has done to help AIG recover from its financial crisis and the excellent counsel she has provided the company, often during very difficult times," he said.

With reports from ABC News' Charles Herman.