AIG's Sullivan scores $47 million severance

American International Group Inc. has bestowed a $47 million severance pay package on ex-chief executive Martin Sullivan. The New York-based insurance company will pay Mr. Sullivan, whose resignation became effective yesterday, a $15 million pay package and a $4 million bonus, according to a filing with the Securities and Exchange Commission. The package also includes equity and cash awards valued around $28 million, based on the company's closing price on Monday of $26.46. He will also be provided with an office and an assistant until the end of the year. Mr. Sullivan was fired after a board of directors meeting on June 15. His ouster followed months of bad news, including plummeting stock prices and regulatory worries about the firm's accounting. He had held the position since March 2005. AIG had recorded two consecutive quarters of record-level losses, totaling more than $13 billion, that were related to write-downs on subprime-mortgage-related investments. The Securities and Exchange Commission has reportedly been investigating the company for overstating the value of contracts linked to subprime mortgages. Chairman Robert B. Willumstad is now serving as chief executive.