How Much is a Share of American International Group Really Worth? (AIG)

How much would you pay for a single share of American International Group Inc. (NYSE:AIG), it currently trades around $28, how about -- nothing?

AIG Stock Is Worthless—Isn't It?  The company and the government both say so. So why is it $29 a share?
(the Big Money | Paul Smalera) One of the strangest things to come out of Steve Brill’s piece on Kenneth Feinberg’s role as compensation czar is the bit about AIG’s (AIG) stock. Feinberg made stock-based compensation a major plank in his guidelines for the TARP companies whose compensation practices he is in charge of regulating. Paying people in stock rather than cash is supposed to encourage executives to stick around the company and put shareholder interests above personal ones.

So it seemed perverse that AIG argued that stock-based compensation in its case wouldn’t work, because AIG stock was essentially worthless. Brill writes that AIG Vice Chairman Anastasia Kelly presented the argument to Feinberg:

Second, and more important, those top executives at A.I.G. who hadn’t received the retention bonuses refused to accept the salarized stock as part of their pay packages. They wanted all cash. A.I.G.’s Kelly told Feinberg that their position was that A.I.G.’s stock—which was trading in the late summer and fall at around $40—was, in a word that Feinberg says he remembers vividly, “worthless.” Kelly explained A.I.G.’s position this way: “We wanted compensation for people at A.I.G. that they would see value in.”

Keep Reading - Click Here>>