* AIG says Anastasia Kelly, head of human resources, quit
* Kelly to be paid $2.8 million in severance--source
* Resigned for "good cause" under severance plan--AIG
(Adds comments from law professor, paragraphs 10-11)
By Steve Eder and Paritosh Bansal
NEW YORK, Dec 30 A top executive at American
International Group Inc (AIG.N) has resigned because of pay
curbs imposed by the Obama Administration's pay czar, the
insurer said on Wednesday.
Anastasia Kelly, AIG's vice chairman for legal, human
resources, corporate affairs and corporate communications,
resigned effective Dec. 30 for "good reason" and is eligible
for severance pay under the terms of the company's executive
severance plan, the insurer said.
Kelly stands to be paid about $2.8 million in severance,
according to a source familiar with the matter.
Kelly's resignation comes after Kenneth Feinberg, who is
charged with monitoring pay levels at companies that received
taxpayer funds, imposed pay caps for AIG's top
Earlier this month, Feinberg set the compensation
structures for the 26th through 100th highest-paid employees at
four firms, including AIG, limiting most cash salaries to
Feinberg also granted less than a dozen special exemptions
from the cash salary cap, including several AIG executives,
after being urged to do so by Federal Reserve and Treasury
Kelly met frequently with Feinberg to discuss pay issues as
he prepared to rule on compensation at companies that received
extraordinary taxpayer bailouts.
She was among five executives reported by The Wall Street
Journal to have notified the insurer that they were prepared to
resign and collect severance benefits if their pay was cut
sharply by Feinberg. Chief Executive Robert Benmosche
separately also had considered quitting because of the pay
constraints, the Journal has reported.
Cornelius Hurley, director of the Morin Center for Banking
and Financial Law at Boston University, said no AIG employee
"We have been duped into thinking that these AIG employees
have some kind of secret code that no other employee could
discover if they were hired to replace them and therefore they
are able to basically hold the company ransom," Hurley said.
AIG had to be propped up with some $180 billion in taxpayer
support after its near collapse in September 2008. The U.S.
government now owns nearly 80 percent of the company, once the
world's largest insurer by market value.
The government stepped in to rescue AIG after it ran short
of funds to meet collateral demands from global banks that had
bought credit protection from an AIG financial products unit.
The government saw the company's possible collapse as a
AIG angered many Americans earlier this year when it paid
million-dollar retention bonuses -- payments simply for
staying in their jobs -- to executives at a financial products
unit that was responsible for its financial implosion.
The insurer also said on Wednesday that Suzanne Folsom,
chief compliance and regulatory officer, has left to pursue
other opportunities. It was unclear if her departure was
related to the pay issue.
It said it is looking for successors for both officials.
(Reporting by Steve Eder and Paritosh Bansal; Editing by Gary
Hill, Robert MacMillan, Leslie Gevirtz)