NEW YORK (
) -- AIG's top employees are suffering more financial losses than the public can imagine, according to its chief,
the Wall Street Journal
Robert Benmosche, AIG's CEO, says that 10 people that report directly to him have lost a combined $168 million in prior years' pay since the government bailout in September 2008. At the same time, five employees in AIG's financial-products division have lost $88 million in prior years' pay as it winds down its derivative trade.
Benmosche says their money went out the door when their cash bonuses were slashed and their unvested stock salary and stock options became nearly worthless after AIG's near collapse.
"Many people think there was no penalty for the executives at AIG when it did poorly, and that they need longer-term compensation so they don't benefit from taking inordinate amounts of risk," Mr. Benmosche said in an interview with the paper.
"But if you look at where they've been this year, they've been pretty much wiped out. And we have to recognize that we're not 100% sure about what the value of AIG will be in the future."
Benmosche tells the paper that he still believes keeping AIG's executive compensation at competitive levels and asset sales alive -- despite its recent slow-down at AIG -- are among the key factors that will help AIG repay the $90 billion it owes taxpayers. Benmosche expects that could take years.
Last Friday, the Obama Administration's "pay czar," Kenneth Feinberg, extended his pay restrictions to the next 75 of 100 highest paid executives at companies that received large amounts of government money.
They include AIG, Citigroup, GM and GMAC. Feinberg had initially put pay caps on the 25 of the highest paid executives at companies that receive government bailout money more than once. The latest pay caps limit executive cash salaries to $500,000 -- no more than 45% of total pay can be in cash, he said.
At least half of total compensation should be long-term or not redeemable for at least three years, said Feinberg.
-- Reported by Andrea Tse in New York
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