NU Online News Service, Aug. 25, 2:46 p.m. EDT

American International Group sought to have the Treasury Department and the “pay czar” tone down criticism of the company, and sought more flexibility in pay and hiring, according to a transcript of a meeting held between the two sides in late November 2009.

At the meeting, AIG provided a summary of its employee retention programs and an overview of its business recovery and stability, and also raised issues related to compensation structures.

AIG sought an appeal of pay decisions, quick actions on 2010 pay recommendations, and “changes in the tone and content of the rhetoric,” according to the transcript.

Robert Benmosche, AIG CEO, starts off the meeting by saying, “People are still here, working to achieve one of the largest and most significant corporate restructurings in history.”

He adds, “The CEOs are gone. The CFO is gone as well. The head of AIG Financial Products and their lieutenants are also gone.”

Moreover, the transcript goes on, “The people who are here are trying to right historically successful businesses and fix the problems that have been left with them.”

A heavily redacted review of the meeting was just released through a lawsuit by Judicial Watch, which required the Treasury Department to release documents dealing with the meeting.

The court decision also supports the Treasury Department's decision to redact most of the summary.

Judicial Watch sought release of the documents because it says it is “time to shed light on AIG, a corporation owned largely by the federal government, and thus, owned largely by the public.”

The meeting of the AIG board, its lawyers and other advisors with Treasury and other officials dealt with AIG's pay practices, which were being criticized by Congress and the general public.

The criticism of the AIG participants was primarily directed at Kenneth Feinberg, who was then serving as special master for compensation programs for the banks, insurance companies and other companies that were receiving federal aid under the Trouble Asset Relief Program.

Officials of the Federal Reserve Board who were dealing with AIG, plus representatives of the Fed's outside counsel, also participated in the meeting, mostly through videoconference.

Feinberg, in carrying out his responsibilities as pay czar under a law enacted by Congress in 2009, had just established pay levels for top employees at the troubled companies, including AIG.

He testified in early 2010 before Congress that he “took special pains” to retain key employees in his rulings on pay at the seven firms and added that the lure of giving up cash for company stock that has a potentially higher value in the future would keep many top earners on the job.

“Our purpose is to communicate directly with you our reactions to [Feinberg's pay] determinations largely in terms of what we see as their effect on our ability to create enterprise value, pay off our debts and leave a viable insurance company standing,” AIG directors say on the conference call.

Special Reports /

AIG Sought Pay Flexibility, Rhetoric Tone-Down in &rsquo;09 Treasury Meeting

Related Stories

Recommended For You

AIG Sought Pay Flexibility, Rhetoric Tone-Down in ’09 Treasury Meeting