NEW YORK -- Insurance giant American International Group Inc. said Thursday it has docked $1 million from the annual pay of the executive leading its aircraft leasing division because of a personal relationship he had with a subordinate.
AIG also created a new executive chairman position for the division, called International Lease Finance Corp. The division CEO, Henri Courpron, will now report to the new executive chairman, Laurette Koellner.
Koellner is an independent director of AIG and a former executive of Boeing Co. and McDonnell Douglas Corp.
New York-based AIG received $182 billion in government aid in 2008, the biggest bailout of the financial crisis. The Treasury Department has recouped $18 billion of the $68 billion it provided the company through its Troubled Asset Relief Program, or TARP. The remainder of the money came from the Federal Reserve Bank of New York. AIG has repaid all but $17.5 billion of those loans.
AIG said Thursday that launched a review after receiving an anonymous complaint that Courpron had an inappropriate relationship with an unnamed employee in the leasing division. AIG said some allegations in the complaint were unfounded, but it said the review, aided by outside counsel, led the pair to acknowledge the relationship, which has since ended.
AIG found Courpron's conduct to be "contrary to AIG's expectations of its officers." It's cutting Courpron's annual compensation from $5.4 million to $4.4 million.
"I apologize for my mistake and the time-consuming distractions it created," Courpron said in a statement. "I am committed to keep moving forward with the ILFC team and Laurette."
Koellner will relinquish her position as an independent director in order to become executive chairman of ILFC.
The division leases more than 1,000 aircraft to airlines and other customers in more than 80 countries.
AIG shares fell $1.01 to close at $31.04 amid steep declines in the broader market.