Legal News

AIG?s GC, In Middle of Pay Kerfuffle, Brings in Dickstein Shapiro

By Ashby Jones

Anastasia Kelly has seen a few things in her long career as a general counsel, a position she served at Fannie Mae, then at Sears Roebuck, then at MCI, and now at AIG.

But it’s probably fair to say she’s never been embroiled in a situation quite like this.

Kelly and four other high-ranking AIG executives said last week they were prepared to quit if their compensation is cut significantly by AIG’s government overseers — namely Ken Feinberg, the government’s so-called “pay czar.” Feinberg is charged with setting pay limits for top executives at companies receiving the most federal bailout money. Click here for Monday’s WSJ story on the kerfuffle, penned by Deborah Solomon and Serena Ng.

In response to the threat, reported Solomon and Ng, Feinberg relented a bit, saying he might lift the $500,000 salary cap.

Kelly and the others are worried that their 2009 pay will be cut, and that they will be subject to even tougher restrictions in 2010, including a prohibition against collecting so-called golden-parachute severance payments that they are currently eligible for.

In October, Feinberg reduced 2009 compensation for AIG’s top 13 employees by 57%, including limiting most base salaries to no more than $500,000. Those 13 executives were the ones who remained of the 25 top 2009 earners at AIG, whose pay Feinberg was ordered to review. The others left before the pay review began. Feinberg is currently working on pay structures for the next 75 highest-paid AIG employees. Kelly and the four others fall into that category.

Several people familiar with the matter say Kelly asked other employees to join her in indicating they were prepared to resign. Four executives agreed, and Kelly retained outside counsel to advise the group on their legal options, says one person familiar with what happened. According to this Bloomberg story, Kelly tapped lawyers at Dickstein Shapiro for guidance.

A spokesman for Kelly says she didn’t “instigate or encourage” the other four, but “only advised the other executives of what they needed to do to protect their rights” under AIG’s executive-severance plan, and helped them arrange for outside counsel.

For a somewhat more, uh, impassioned take on the situation, check out Eric Anderson’s screed from earlier Monday over at the Huffington Post. He’s not buying Kelly’s assertion that she didn’t play the role of rabble-rouser.

Writes Anderson:

I’m sorry, but when an attorney — particularly one who has been named a corporate general counsel — tells me I need to “protect my rights,” well, he or she is now leading the charge. Oh, by the way, did I mention Ms. Kelly is trying to protect a golden parachute she supposedly earned after serving at AIG for less than five years…unbelievable. This is a sense of entitlement that makes even Marie Antoinette a sympathetic character.

LBers, any thoughts on the AIG revolt?

Photo: Getty Images

Full post as published by Law Blog - WSJ.com on December 07, 2009 (boomark / email).