AIG bonus backdown

US Treasury pay czar, Kenneth Feinberg, has eased restrictions on compensation paid to an executive at AIG, submitting to requests from the embattled government-controlled insurer to pay a multimillion incentive bonus to the unidentified officer. In a letter to the company, Feinberg said the executive, one of the company’s top 25 earners, would receive a previously announced annual base salary of $450,000, plus an annual long-term restricted stock grant valued at around $1m and a stock grant worth around $3.3m on the grant date. Feinberg, formally known as the Treasury’s special master for executive compensation, said he reconsidered the incentive package after the executive in question dropped plans to leave AIG at year-end. “In light of the fact the specified employee will remain in the employ of AIG, it is appropriate to provide long-term incentives to ensure the employee contributes to AIG’s long-term success and, ultimately, AIG’s ability to repay taxpayers,” Feinberg wrote.