Federal officials have been urging pay czar Kenneth Feinberg to ease the compensation restrictions at AIG for 2010, according to the Wall Street Journal, arguing that the taxpayer would ultimately bear the burden if the restrictions are too severe.
Feinberg last month announced cuts in 2009 compensation, including salaries and stock, for the top 13 AIG employees by 57%. New York Federal Reserve and Treasury Department officials recently urged Feinberg to avoid making 2010 pay similarly restrictive for some top executives and employees at the bailed out insurer, the Journal reports.
Fed and Treasury officials told Feinberg that tough restrictions ultimately could jeopardize the government’s ability to recoup its roughly $90 billion in loans because key employees would leave.
