“Let me be clear: I and the board remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf,” Mr. Benmosche told employees.
According to the newspaper report, Mr. Benmosche had told AIG directors he was “done” with the job he took in August, but agreed to think it over when they reacted with shock. The memorandum sent Wednesday was intended to address employee “concerns” about the speculation, AIG said.
AIG is in the process of trying to sell assets, streamline its operations and improve profitability in an effort to repay the government after it received an aid package of about $180 billion from the government last year in exchange for an 80% stake in the company.
Last month, Mr. Feinberg demanded executive pay cuts at seven companies that had received Treasury funding, including AIG. The restrictions called for bailed-out companies to reduce total compensation for their top 25 highest-paid employees by 50% on average, with some executives’ salaries reduced as much as 90%. In addition, Mr. Feinberg said salaries at the insurer could not exceed $500,000 a year.
According to the report, Mr. Benmosche and other AIG board members met with Mr. Feinberg in New York last week and discussed the difficulties of complying with pay policies and retaining top executives.
“To be certain, I and the board are indeed frustrated and we are in ongoing discussions with the Treasury and the special master to resolve the uncertainty surrounding the issue. We are all working aggressively to overcome this compensation barrier that stands in the way of restoring AIG’s value and allowing us to live up to our obligations to all stakeholders,” Mr. Benmosche wrote in the memo.
He said “the vast majority of employees are unaffected by this issue.”
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