AIG General Counsel May Depart After Protesting Pay (Update2)
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By Hugh Son
Dec. 8 (Bloomberg) -- Anastasia Kelly, the general counsel of American International Group Inc. who threatened to quit over government-imposed pay limits, may depart as early as this month, said three people familiar with the matter.
Kelly, 60, said in a Dec. 1 letter she was prepared to leave AIG by yearend because of impending compensation restrictions, and the insurer hasn’t sought to keep her, said the people, who declined to be identified because an announcement hasn’t been made. Michael Leahy, a lawyer who works at AIG’s New York headquarters, is among candidates being considered to succeed Kelly, said one of the people.
AIG was rescued last year in a U.S. bailout that has swelled to $182.3 billion, placing the company under the jurisdiction of Kenneth Feinberg, the Obama administration’s special master for executive compensation. Kelly hired Washington-based law firm Dickstein Shapiro LLP to represent her and four AIG managers concerned that Feinberg would impose limits on severance pay, said one of the people.
“If people aren’t seeing a long-term future there, maybe they’re blaming the pay,” said Bill Bergman, an analyst at Morningstar Inc. in Chicago.
The executives’ severance awards may equal as much as two years of salary and bonuses, AIG said in a June regulatory filing. Leahy and Mark Herr, a spokesman for AIG, declined to comment. Kelly didn’t immediately return a phone call and e-mail seeking comment.
Persuaded to Stay
Kelly joined AIG in 2006 to help the insurer recover from regulatory probes that led to the retirement of former Chief Executive Officer Maurice “Hank” Greenberg. Kelly, former general counsel at MCI/WorldCom and Fannie Mae, didn’t endear herself to AIG’s current CEO, Robert Benmosche, who took over in August, the people said.
Kelly was among managers in a September 2008 e-mail listing people who should be dismissed over AIG’s near-collapse, according to Fortune magazine. The so-called “kill list” was written by then-controller David Herzog, now chief financial officer. He urged former CEO Robert Willumstad to “clean the slate” for his government-appointed successor, Edward Liddy, the magazine reported.
The five executives who said they may resign are Kelly; Rodney Martin, who heads a non-U.S. life unit; William Dooley, a senior vice president in charge of the financial-products division; Nicholas Walsh, head of the non-U.S. property casualty operations, and John Doyle, who is in charge of the U.S. property casualty unit, the people said.
Threats Retracted
AIG persuaded two of the four managers to retract their threat to leave, one of the people said. Walsh and Doyle rescinded the notices, the Wall Street Journal said yesterday.
Feinberg may issue a ruling as early as next week allowing some AIG executives to earn more than a $500,000 salary cap he announced in October, according to one of the people. Treasury Department and Federal Reserve officials have urged him to strike a balance between curbing excessive pay and retaining key employees.
The $500,000 limit has so far applied to everyone at AIG except Benmosche, who has a $7 million salary.
More than 50 managers including Vice Chairman Matthew Winter and property-casualty executive Kevin Kelley left AIG to join rivals since the bailout. Benmosche threatened to resign last month, saying limits on compensation hurt the insurer’s ability to retain staff. He reassured employees in a Nov. 11 memo that he was committed to leading AIG.
To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net.
Last Updated: December 8, 2009 17:45 EST
