The U.S. is telling American International Group Inc it needs to spend less.
Under directions from the U.S. Treasury, the bailed out insurance company has a new expense guide for employees, limits on executive pay, and a committee that will oversee the company, Reuters reports.
The U.S. has essentially taken over AIG, providing billions of dollars in loans to keep the company from failing.
The the new guide was revealed in a letter written by Federal Reserve Chairman Ben Bernanke to Sen. John Kerry in reponse to a written request by the senator to make sure AIG did not incur “unnecessary or excessive expenses at cost to the taxpayer.”
Bernanke wrote: Last fall, for example, we made clear to AIG's management our deep concern about reported incidents of corporate spending and questions surrounding certain executive compensation.
Any changes to the new policies can only be made by the U.S. Treasury Department, Bernanke said.