NU Online News Service, Jan. 4, 12:23 p.m. EST

Anastasia Kelly, American International Group vice chairman for legal, human resources, corporate affairs and corporate communications, resigned last week in the wake of a federally mandated pay cut.

The company announcement Wednesday that Ms. Kelly was leaving also reported the departure of Deputy General Counsel Suzanne Folsom, the company vice president serving as chief regulatory and compliance officer.

AIG said Ms. Kelly resigned for "Good Reason" under the terms of AIG's Executive Severance Plan based on the reduction in her base salary.

Her pay cut was part of a package of executive pay limits that were set by Kenneth Feinberg, the special master for executive compensation for companies taking government bailout cash under the Troubled Asset Relief Program.

AIG's statement made no mention of Ms. Kelly's severance package that reportedly will exceed $2 million. The company said Ms. Folsom was leaving to "pursue other opportunities" and did not mention a salary reduction. She joined AIG in April 2008.

Ms. Kelly, the former chief legal officer at MCI/WorldCom, joined AIG in September 2006 as executive vice president, general counsel, and senior regulatory and compliance officer.

She was named vice chairman in January of 2009 as part of a reorganization the company said was designed to better its efforts to repay billions in taxpayer bailout money and restore AIG's financial health.

Robert H. Benmosche, AIG president and chief executive officer, thanked both women for their service. He said Ms. Kelly in working to help AIG's financial recovery provided excellent counsel "often during very difficult times."

Ms. Folsom's efforts, he said, "have put AIG on a better regulatory footing."

AIG expects a smooth transition, said Mr. Benmosche, and has already initiated the process to identify successors to both Ms. Kelly and Ms. Folsom.