Pay Czar Rejects AIG Pay Packages: Report

NEW YORK (TheStreet) -- American International Group (AIG Quote) isn't getting away with massive executive pay packages again -- not on Kenneth Feinberg's watch.

The Obama administration's Pay Czar rejected much of the pay packages for AIG's top employees, including those in the financial-products unit, the Wall Street Journal reported.

Feinberg said the compensation packages were inconsistent with "public interest." He said base salary shouldn't be more than $500,000 for the year, and approved salaries between $100,00 and $450,000, according to the Journal.

For those earning in this range, cash bonuses will be 91% lower than they were in 2008.

Feinberg also rejected AIG's bid to dole out more than $900,000 in perks and $1.5 million in "other" compensation to select employees. Instead, he said these employees should receive no more than $25,000 each in this type of pay.

But for all the restrictions Feinberg is demanding, there are some things he cannot seem to control. Employees in the financial-products unit may still receive bonuses that are due to be paid in 2010, and Feinberg said he could not persuade AIG to restructure retention bonuses ranging from $1.5 million to $2.4 million to three high-ranking executives, the Journal reported.