NEW YORK (Bloomberg) — The Securities and Exchange Commission questioned American International Group Inc. about whether the bailed-out insurer's former general counsel deemed the stock worthless when negotiating executives' compensation.

The SEC wrote to the insurer on January 13 about a New York Times article that month in which US paymaster Kenneth Feinberg said he was told by ex-General Counsel Anastasia Kelly that the company's stock was worthless. The letter was among correspondence released today by the regulator.

Kelly had explained to the writer of the article that "any reference to 'worthless' in relation to AIG common stock was in the context of how employees might perceive the value of AIG common stock", AIG told the SEC in a March 11 letter.

Kelly was negotiating with Feinberg, who has jurisdiction over executive pay because the company, which got a $182.3 billion bailout, is among the largest recipients of US rescue funds. Kelly told Feinberg that executives of the New York-based company preferred cash to common stock, according to the Times article.

The SEC said March 15 it had no further comment on the compensation AIG outlined in a December 31 regulatory filing. Such correspondence may be released 45 days after a review is closed. Kelly resigned in 2009 in a dispute over government-imposed limits on her pay.

AIG gained 72 cents to $40.23 in New York Stock Exchange composite trading yesterday. The company has gained about 34 percent this year after falling 97 percent in 2008 and 4.5 percent last year.

The insurer said in regulatory filings in December that AIG stock salary would be granted in common shares rather than units based on the value of some of the company's main divisions. AIG had earlier believed the units were appropriate, partly because they weren't tied to performance of "non-core" businesses, the company said in a January 26 letter.

AIG eventually opted to use common stock "based on the concerns that the basket approach might cause further divisions within AIG and indicate that formal separation of AIG's core businesses would in fact occur," the company said in the January 26 letter.