AIG Parts Ways With Longtime Legal Chief-Turned-Vice Chair Fato

American International Group Inc. saw its new vice chair Luciana “Lucy” Fato leave the company, six months after she relinquished its top legal job.

AIG disclosed in a proxy statement filed earlier this month that Fato received more than $8.4 million in total compensation during 2023, down from the more than $10.6 million she earned the year prior. Fato, perennially one of the highest-paid legal chiefs at US publicly traded companies, is one of three former AIG executives listed on the finance and insurance company’s summary compensation table that have left its ranks within the past year.

The others are Mark Lyons, a former interim chief financial officer who AIG said was fired last year over a breach of his confidentiality obligations, and former financial chief Shane Fitzsimsons, who left after taking medical leave. AIG and Fato didn’t respond to requests for comment about her departure.

Fato’s last day at AIG was March 31 of this year, according to the company’s proxy filing. The company said Fato received her $1 million base salary through the date of her termination without cause and that she’ll remain eligible for the collective $6.1 million in short- and long-term incentive awards she was in line for going forward. All of Fato’s outstanding equity awards in AIG will also vest, the company said. Bloomberg data shows she owns $13.2 million in AIG stock.

AIG hired Fato, a former capital markets partner at Davis Polk & Wardwell, to be its general counsel in 2017. She had also been general counsel for S&P Global Inc., a financial services company, and deputy general counsel and corporate secretary at professional services provider Marsh & McLennan Cos. Inc.

At AIG, Fato helped the insurance giant weather the pandemic, during which time she took on the additional duties of global head of communications and government affairs. AIG’s Chief Executive Officer Peter Zaffino praised Fato last year for playing a “pivotal role” in transforming a company that once received a $182 billion bailout from the US government following the 2008 financial crisis.

AIG’s proxy filing shows that Fato ceased serving as an executive officer for the New York-based company as of Sept. 30, 2023. That was a day after AIG announced that Fato would step down from its general counsel role as of Dec. 1 with Patricia “Trish” Walsh, chief legal officer at financial technology outfit Stripe Inc., being brought on to succeed her. That transition never took place.

For reasons that remain unclear, Walsh decided against joining AIG, which on Nov. 30 instead tapped its chief human resources and diversity officer Rose Marie Glazer to be its new general counsel. Glazer, a former Jones Day associate who has worked at AIG since 2017, had been interim general counsel following Fato’s switch to a newly created vice chair position in September. Glazer now oversees AIG’s legal, compliance, and regulatory functions.

Glazer continues to serve as AIG’s top human resources and diversity officer on an interim basis. Her name doesn’t appear in AIG’s most recent proxy, which is signed by newly appointed corporate secretary Christina Banthin, a former associate general counsel for separation initiatives at the company. Banthin rejoined AIG in January after spending more than a year at Corebridge Financial Inc., a Houston-based life insurance business spun off by AIG in 2022.

Banthin’s taken over a corporate secretary position at AIG previously held by Prabha Sipi Bhandari, another former Davis Polk lawyer and ex-deputy general counsel at Freddie Mac whom AIG hired as a deputy general counsel in 2022. Bhandari, who reported to Fato, didn’t return a comment request.

Fato was a member of the board at Corebridge until April 2 of this year, when the company disclosed in a securities filing that she had resigned as part of a separation agreement with AIG. Corebridge said Fato didn’t cite any disagreement over “operations, policies, or practices” in her decision to leave its board. Fato’s Corebridge board seat has been given to AIG’s Glazer.

Walsh, Fato’s would-be successor at AIG, also resigned from Corebridge’s board late last year. The company gave no reason for her departure.