NU Online News Service, Jan.18, 1:18 p.m. EST

WASHINGTON–Sen. Charles Grassley, R-Iowa, ranking minority member of the Senate Finance Committee, has asked officials to detail how an American International Group executive who resigned is entitled to a multimillion-dollar severance agreement.

Mr. Grassley requested that Kenneth R. Feinberg, the special Master for Compensation for the Troubled Asset Relief Program, provide information about the payout to Anastasia Kelly.

Ms. Kelly, former AIG executive vice president, general counsel, and senior regulatory and compliance officer, resigned at the end of the year to protest the pay limits Mr. Feinberg imposed on AIG executives as of November.

"The taxpayers are fed up with massive payouts to executives at companies that took taxpayer money," Sen. Grassley said. "The special master for compensation should account for a multimillion-dollar severance agreement for this AIG executive," he added.

According to reports, Ms. Kelly will receive between $2.8 million and $3.8 million in severance in the wake of her Dec. 30 resignation.

Generally, severance agreements are intended for involuntary separations, Sen. Grassley said in his letter to Mr. Feinberg.

However, in this instance, Sen. Grassley said, it appears that Ms. Kelly was not terminated. "On the contrary, she reportedly decided to leave the company because she was unwilling to accept the limit on executive salaries you imposed," Sen. Grassley said.

"For me, and I am sure for taxpayers across America, the situation as reported surrounding Ms. Kelly and her severance is deeply troubling news," Sen. Grassley said.

"This is especially true in light of the already sordid record at AIG of paying massive executive bonuses with TARP taxpayer money," he added.

In other activity by lawmakers to scrutinize high executive salaries at financial institutions involved in the financial crisis, the House Financial Services Committee is due to hold a hearing Friday on the compensation practices at big banks.

It comes as the Obama administration announced plans to levy a tax on large financial institutions to help repay the government for aid it provided to American International Group and large banks during the economic crisis that began in September 2008.

Regarding the hearing, Rep. Barney Frank, D-Mass., said the proceedings are aimed at persuading the Senate Banking Committee to include provisions in their version of financial services reform legislation similar to those in the House bill passed in December.

Those provisions will allow shareholders of all public companies to have a vote on executive compensation packages and give securities and banking the authority to restrict risk-based incentive pay.

The Senate banking panel has broken up into two-man groups to draft omnibus legislation reforming regulation of the financial services industry. It is unclear when work on the Senate draft will be completed and unveiled as a comprehensive piece of legislation.

"I think compensation has gotten excessive," Rep. Frank said. "We may not be able to deal with it; there are limits to what you can do publicly," he said. "But I want to explore what we can do further; I want to underline what we are already doing, frankly, in the hope that maybe the Senate will be even more inclined to do this," he added.