New York Attorney General Andrew Cuomo announced yesterday thatAmerican International Group has agreed to freeze a $600 millionemployee compensation and bonus pool, as well as payments to formerchief executive Martin Sullivan.

Mr. Sullivan would have been paid approximately $19 million plusother benefits, according to a letter Mr. Cuomo sent to EdwardLiddy, AIG's current chairman and chief executive officer.

Mr. Sullivan left his post in June after the company postedbillions in losses and was replaced by Robert Willumstad. Mr.Willumstad AIG when the cash-strapped company arranged for an $85billion Federal Reserve Bank loan in exchange for giving thegovernment a 79.9 percent interest in the conglomerate.Subsequently the firm increased its borrowing.

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