Troubled insurance giant American International Group will freeze compensation payments to former CEO Martin Sullivan, as New York State Attorney General Andrew Cuomo examines executive compensation in light of the insurer's U.S. bailout.
"Until the taxpayers recoup their investment in AIG, which is now in excess of $120 billion plus interest, there should not even be any contemplation of bonuses for executive performance," Cuomo said in a conference call, according to Bloomberg News.
AIG will freeze $19 million in compensation payments to Sullivan. The insurer also agreed not to distribute funds from $600 million in deferred compensation to its Financial Products subsidiary, which underwrote credit default swaps that led to the firm's $25 billion in write-downs.
AIG agreed to give Sullivan $47 million in compensation in June when he was replaced as CEO by AIG Chairman Robert Willumstad, according to Bloomberg News.
The insurer recently received credit lines of over $122 billion from the federal government. The company has already used nearly $83 billion, the Wall Street Journal reported.
"The American taxpayer is now supporting AIG, making the preservation of these taxpayer funds a vital obligation and a priority responsibility of your company," said Cuomo's letter to Edward Liddy, AIG's new chairman and CEO, according to Reuters.