(Recasts and adds details throughout to incorporate investor letter; adds dateline)
NEW YORK, April 1 (Reuters) - A group of investors is seeking to oust an American International Group Inc (AIG.N) director who leads a committee it said authorized bonuses to executives that brought the insurer to the brink of failure.
In a letter to U.S. government-appointed trustees for AIG, officials representing large union and public pension funds urged the trustees to block the re-election of James Orr, who chairs AIG’s compensation and management resources committee.
The group said Orr was on the committee when it approved pay and retention awards for executives at the AIG Financial Products unit mainly responsible for the insurer’s distress.
AIG has received an estimated $180 billion of government bailouts since September, and prompted outrage last month among Congress, the public and President Barack Obama for paying out $165 million of bonuses to employees in the financial products unit. New York-based AIG lost $99.29 billion last year.
“The decisions made by the committee were wrong and an inexcusable misuse of corporate assets,” the letter said. “Mr. Orr acted contrary to the interests of shareholders by authorizing the payment of bonuses to the AIG Financial Products executives who were culpable for massive losses.”
Tuesday’s letter came from Gerald McEntee, president of the American Federation of State, County and Municipal Employees union; Denise Nappier, Connecticut’s treasurer; and Richard Trumka, secretary-treasurer of the AFL-CIO labor union federation.
AIG could not be immediately reached for comment.
The Federal Reserve Bank of New York in January appointed the trustees for AIG to oversee the U.S. government’s nearly 80 percent stake in the company.
These trustees are Jill Considine, former chairman of the Depository Trust & Clearing Corp; Chester Feldberg, former chairman of Barclays Americas; and Douglas Foshee, chief executive of natural gas company El Paso Corp EP.N.
In the letter, the investors urged the trustees to vote in favor of giving shareholders an advisory vote on executive compensation. (Reporting by Jonathan Stempel; Additional reporting by Ajay Kamalakaran in Bangalore; editing by John Stonestreet and John Wallace)