“I apologize for my mistake and the time-consuming distractions… (Francine Orr, Los Angeles…)
The top executive of insurance giant American International Group Inc.'s airplane leasing unit in Century City had his salary cut by $1 million and was demoted after an affair with an employee.
Henri Courpron, 49, will retain his position as chief executive of International Lease Finance Corp., one of the world's largest aircraft leasing companies, with a fleet of 930 commercial aircraft. AIG said he had been earning $5.4 million in annual compensation before the pay cut.
But AIG named one of its outside corporate directors, former Boeing Co. executive Laurette Koellner, to the newly created role of ILFC executive chairman. In that role, Koellner will be the most senior executive, AIG said.
"I apologize for my mistake and the time-consuming distractions it created," Courpron said in a statement. "I am committed to keep moving forward with the ILFC team and Laurette." He could not be reached for further comment.
With plush headquarters at Constellation Place, formerly known as MGM Tower, International Lease Finance Corp. buys aircraft and rents them to airlines for a fixed period. The company, better known as ILFC, has business relationships with nearly every major airline around the globe.
Courpron, a French native, was tapped in May 2010 to take the helm of the leasing business. At the time, the appointment of the longtime Airbus executive was seen as a way to bring some stability to the business.
ILFC had been rocked by several high-profile resignations of company executives after parent company AIG received a federal bailout in September 2008, which gave the government oversight of the company and its units.
The company said its investigation of Courpron's behavior began after AIG received an anonymous complaint that alleged that a personal relationship had started between Courpron, who is married, and an unnamed ILFC employee under his supervision. Both parties acknowledged that they had engaged in a relationship that had since ended, New York-based AIG said. The employee was not identified.
The anonymous complaint further alleged that the relationship resulted in improper use of company assets and inappropriate personnel decisions. AIG said it found these allegations to be unsubstantiated.
In a letter sent to AIG employees Thursday, company CEO Robert H. Benmosche said Courpron's actions were "contrary to AIG's expectations of its officers."
AIG has hinted at selling ILFC for the last few years but has been unable to close a deal. It also has hinted at issuing an initial public offering for ILFC to raise funds to help repay the $182.5-billion bailout.
Koellner, 57, has been serving as an independent director of AIG since June 2009. In her new role as executive chairwoman of ILFC, Koellner no longer meets the AIG board of directors' requirements for independence and is stepping down as a member of the AIG board.
In her last executive role, Koellner served as president of Boeing International, a division of Boeing Co., where she served in a variety of financial and business leadership roles from 1997 to 2008. Before that, Koellner spent 19 years at McDonnell Douglas Corp.
"We have taken the right steps to affirm AIG's and ILFC's commitment to sound conduct in the workplace," Koellner said in a statement. "We will work together to assure that ILFC continues to build on its momentum as the largest independent aircraft lessor in the industry."