Halt Comes as New York Attorney General Reviews Insurer’s Actions Before Rescue
NEW YORK — American International Group Inc. agreed Wednesday to freeze some $19 million in payments to its former chief executive, Martin Sullivan, while New York Attorney General Andrew Cuomo reviews executive compensation and other expenditures paid out as the company neared collapse earlier this year.
The insurance giant also has agreed not to distribute any funds from its $600 million deferred-compensation and bonus pools of its AIG Financial Products subsidiary, which Mr. Cuomo has said was largely responsible for the company’s near collapse.
The company recently received credit lines of up to $122.8 billion from the federal government, helping it avoid collapse. Last week, AIG had tapped $82.9 billion of those credit lines. Some regulators, including Mr. Cuomo, are troubled by outsized compensation packages being paid to departing executives in the financial industry, particularly if those firms have sought help from the federal government.
“To be clear, it is my position 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 any executives,” Mr. Cuomo said in a letter Wednesday to Edward M. Liddy, AIG’s chief executive. “As AIG recovers using taxpayer money, these pools should not be used to reward executives ahead of taxpayers.”