AIG's Willumstad: I Won't Take $22M Severance After Stock Drop

A Securities and Exchange Commission filing yesterday confirmed earlier statements by American International Group that former chief executive Robert B. Willumstad turned down a $22 million severance he was entitled to.

AIG's 10Q filing contained a letter from Mr. Willumstad, saying he did not want to take the cash while company shareholders and workers were taking a beating on their stock and he did not get the opportunity to do the job he was hired to do.

In the letter to current AIG Chairman and CEO Edward M. Liddy, Mr. Willumstad said while it was determined by the board that he was terminated from his post "not for cause" and therefore entitled to an approximately $22 million severance payment, he was turning down the money after careful deliberation.

He said he was not accepting the money for two reasons.

First, in his three-month tenure in the post he was unable to execute the restructuring plan he was hired to do.

Second, "I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares."

The letter was part of AIG's Securities and Exchange Commission filing reporting their third-quarter results.

Mr. Willumstad was chairman of AIG when he was called on by the board in June to replace then CEO Martin Sullivan, who was pressured to leave the company after AIG piled up billions in losses.

Mr. Willumstad was replaced in September by Mr. Liddy after AIG secured an $85 billion bridge loan from the New York Federal Reserve Board in exchange for giving taxpayers a 79.9 percent interest in the company.