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Grassley Questions ‘Severance’ Pay to AIG Exec

As Wall Street prepares to dole out billions of dollars in 2009 bonuses, Sen. Charles Grassley (R-Iowa) has his eyes on one particular payment of $2.8 million.

Jul 31, 2020
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As Wall Street preparesto dole out billions of dollars in 2009 bonuses, Sen. Charles Grassley (R-Iowa) has his eyes on one particular payment of $2.8 million. That’s the amount reportedly paidto Anastasia Kelly, AIG’s general council, who resignedabruptly on Dec. 30 rather than accept new pay limits imposed by Kenneth Feinberg, executive pay czar for the Wall Street bailout. (Other reports put Kelly’s windfall at $3.8 million).
In a letter to Feinberg, Grassley, senior Republican on the Finance Committee, is wondering (1) why such a large payment should go to an employee at a company that would no longer exist without the government’s help, and (2) why severance payments would apply to someone who left the company on her own accord. Along with the details of the severance agreement, Grassley is asking for Kelly’s complete pay history while at AIG.
Based upon the information that I have, it is unclear to me why Ms. Kelly’s voluntary resignation ought to entitle her to a multi-million dollar windfall from a severance agreement entered into by a company receiving so much federal taxpayer support. At 2010 salary levels, $2.8 million in severance amounts to almost six years of pay. $3.8 million in severance would amount to almost eight years of pay. Regardless of whether her severance is $2.8 million or $3.8 million, this raises serious questions about whether you believe the payment meets “appropriate standards for executive compensation” at a TARP recipient like AIG.
That Ms. Kelly feels entitled to the cash even after AIG was bailed out to the tune of $182 billion goes a long way to explain the populist anger directed at Wall Street.
Dexter Cooke

Dexter Cooke

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Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide. He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina. Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations. As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all. Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
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