American International Group, Inc. (AIG) announced voluntary restrictions on executive compensation that include a $1 salary for its Chief Executive Officer; no 2008 annual bonuses and no salary increases through 2009 for AIG’s top-seven-officer Leadership Group; and no salary increases through 2009 for the 50 next-highest executives, in addition to other bonus, severance and retention award restrictions. AIG is also working on a structure to prevent taxpayer dollars from eventually finding their way to potential future exec bonuses, the company said.

Edward M. Liddy, AIG’s Chairman and Chief Executive Officer, said AIG’s senior executives recognize AIG’s obligation to taxpayers. “We are extremely grateful for the assistance we have received, and we know we have an obligation to use that assistance to help AIG recover, contribute to the economy and repay taxpayers,” Mr. Liddy said. “This action by the senior management team demonstrates not only that we understand our obligation to taxpayers and shareholders, but also that we are committed to the future success of this organization.” AIG has received billions in government funds as its capital position continued to deteriorate amid the financial market turbulence. Since it began getting government help, AIG has been the subject of widespread criticism for going ahead with scheduled sales incentive trips at luxurious resorts.

AIG Adopts Voluntary Executive Compensation Restrictions (AIG 11/25/08)

December 2, 2008