AIGexecs threaten to quit if pay is cut

FIVE senior executives at bailed-out bank AIG said that they are prepared to quit if their pay is cut significantly by the US pay tsar Kenneth Feinberg. <br /><br />The five senior AIG executives indicated last week in written notices that they were prepared to leave by the end of the year, according to sources.<br /><br />However, two are now believed to have changed their mind. <br /><br />The revelation is the latest clash between AIG and Feinberg, who is charged with setting pay limits for top executives at firms receiving large chunks of federal bailout money.&nbsp; AIG was propped up by the government with over $180bn (&pound;109bn) in taxpayer funds.<br /><br />Even chief executive Robert Benmosche reportedly threatened to quit last month, in part because he did not have discretion over pay packages for top executives. Benmosche argued that if the US administration wanted AIG to succeed and pay back its debts it needed to hire and retain top talent. <br /><br />AIG executives fear that their 2009 pay will be clipped and that they will be subjected to even tougher restrictions next year. There are concerns that so-called golden-parachute severance payments will also be banned.<br /><br />The USTreasury has vetoed the bank&rsquo;s estimated $1.5bn bonus pool for staff at the group&rsquo;s investment arm.<br /><br />In October, Feinberg reduced 2009 compensation for AIG&rsquo;s top 13 employees by 57 per cent, including limiting most base salaries to no more than $500,000. The 13 executives were the 25 top 2009 earners at AIG. <br /><br />In the next two weeks Feinberg is expected to reveal his decision on pay cuts for the next 75 highest-paid employees.