AIG CEO to get $1 Salary for Two Years

[Allisonfaye]

Gee, Strmrdr. Usually you are right off the presses with this stuff.


AP
AIG restricts exec compensation, CEO gets a dollar
Tuesday November 25, 1:53 pm ET
By Ieva M. Augstums, AP Business Writer
AIG adopts exec compensation, bonus restrictions, CEO Liddy gets $1 annual salary for 2 years

CHARLOTTE, N.C. (AP) -- American International Group Inc. said Tuesday it is limiting how much it pays its top executives, including granting a $1 salary for this year and the same for 2009 to its Chief Executive Edward Liddy.
ADVERTISEMENT


The decision is one of many broader moves made by the troubled New York-based insurer, which has been under pressure to restrict executive pay since accepting billions in government assistance to save it from collapse. AIG has received about $150 billion so far, more than any other company.

It was once the world''s largest insurer with customers around the globe, and regulators feared the possible effect an AIG collapse would have had on the world''s financial system.

The company said there will be no 2008 annual bonuses and no salary increases through 2009 for AIG''s top seven officers and no salary increases through 2009 for the 50 next-highest AIG executives. In addition to his $1 a year salary, Liddy will be getting an unspecified amount of stock.

"We believe these actions demonstrate that we are focused on overcoming our financial challenges so AIG can return value to taxpayers and shareholders," Liddy said in a statement.

AIG shares fell 4 cents, or 2.5 percent, to $1.73 in afternoon trading.

The announcement comes after New York Attorney General Andrew Cuomo sent a letter to Liddy earlier this month saying AIG should be "completely transparent" about its compensation plans for 2008.

In mid-September, the Federal Reserve said it would offer two loans totaling $123 billion to AIG to help the insurer stave off bankruptcy. AIG was later allowed to access another $20.9 billion through the Fed''s "commercial paper" program. And earlier this month, the government announced new financial assistance to the company.

On Tuesday, Cuomo applauded AIG''s decision to limit executive pay, and said other companies receiving federal bailout money should follow suit.

"It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face," Cuomo said. "The government is not writing blank checks to these companies."

In a letter to Cuomo on Tuesday, Liddy said AIG is "extremely grateful" for the support it has received from American taxpayers, and said the company does "recognize the obligation we have to use that support to help AIG recover, contribute to the economy and repay taxpayers."

Like other insurers, AIG has been slammed by deterioration in the credit markets amid concerns that complex, structured investments it insures will increasingly default. Its problems did not come from its traditional insurance subsidiaries, but instead from its financial services operations, and primarily its insurance of mortgage-backed securities and other risky debt against default.

AIG said no taxpayer dollars will be used for any annual bonuses or future cash performance awards for AIG''s top management positions.

Liddy, who joined the company in mid-September, will not receive an annual bonus this year or next, although he may be eligible for a special bonus for "extraordinary performance" payable in 2010, the company said.

When asked to comment on Liddy''s decision to take a $1 annual salary for the next two years, and be paid instead with equity grants, Cuomo expressed admiration.

"He''s putting his money where his mouth is," he said. "If he performs, God bless him."

It wasn''t immediately clear how much stock Liddy stands to get, but AIG spokesman Peter Tulupman more information would be disclosed in an regulatory filing with the Securities and Exchange Commission.

Earlier this month, AIG ended 14 voluntary deferred compensation programs, resulting in $500 million of payouts due in the first quarter of 2009.

The company said it made the move to prevent employees from having to leave to collect deferred pay. The old plans had been set up so that employees could defer pay voluntarily and collect it when they left AIG, no matter the reason.

Several struggling financial institutions have announced in recent weeks that they are canceling bonuses for top executives, including Goldman Sachs, the Swiss bank UBS and the British bank Barclays.

Cuomo has praised those moves and suggested that other Wall Street institutions should follow suit, especially those receiving federal bailout money.

AP Writer David B. Caruso in New York contributed to this report.

 

[Allisonfaye]

Hmmm...all these views and no replies? I guess unless we are skewering them for somethign bad, we have nothing to say at all. I told you Mr. Liddy was a stand up guy.

 

[trillionaire]

LOL, his salary can''t even buy a share of stock.

I guess I don''t understand how he can get $1 annual salary for this year and next year... hasn''t he already been paid for 75%+ of this year? Did he pay it back?

Maybe I should read the whole article... lol.

 

[iheartscience]

Date: 11/25/2008 6:30:09 PM
Author: trillionaire
LOL, his salary can''t even buy a share of stock.

I guess I don''t understand how he can get $1 annual salary for this year and next year... hasn''t he already been paid for 75%+ of this year? Did he pay it back?

Maybe I should read the whole article... lol.

Hahaha-good point, trill! And I was thinking the same thing about his salary. I''m assuming it''s because most of them usually get ca-razy bonuses at the end of the year so instead he''s getting $1?

 

[decodelighted]

Allisonfaye,

I think its less notable when companies get their hands caught in the cookie jar, get publicly reamed for it so much so that SNL is doing skits about it, and THEN they make an effort to "shape up". Some folks will think its too little too late -- & that these type of efforts should have been initiated BEFORE asking the gov''t for TWO bail outs. (Along with cancelling the parties etc).

Same with the reports that car execs are now going to "caravan" in American cars to Washington for the next set of hearings. Well ... SNL did that joke on Saturday. Where do you think they got that idea? Granted they are responding to criticism & taking SEMI-positive action ... its just hard to believe that with all their power & PR firms & ad agencies & high priced execs that NO ONE was able to see how badly their prior actions would look to the American public considering their dire situations & poverty posturing.

Better than nothing but, um, just *barely* better than nothing. Not worth doing a jig or even polite applause.

 

[ksinger]

Date: 11/25/2008 5:49:25 PM
Author: Allisonfaye
Hmmm...all these views and no replies? I guess unless we are skewering them for somethign bad, we have nothing to say at all. I told you Mr. Liddy was a stand up guy.

Maybe all those views and no posts because the in the 1hour and 15 seconds between when you posted and when you decided no one was replying was a time when most people are still at work and shouldn''t/can''t post? Or driving home? Or spending extra time grocery shopping for Thanksgiving?

My take? Too little too late, quite simply. No accolades from me for owning up to reality only after reality has grabbed you by the back of the head and SHOVED your face into the mirror.

 

[neatfreak]

Date: 11/25/2008 11:53:25 PM
Author: decodelighted
Allisonfaye,


I think its less notable when companies get their hands caught in the cookie jar, get publicly reamed for it so much so that SNL is doing skits about it, and THEN they make an effort to ''shape up''. Some folks will think its too little too late -- & that these type of efforts should have been initiated BEFORE asking the gov''t for TWO bail outs. (Along with cancelling the parties etc).


Same with the reports that car execs are now going to ''caravan'' in American cars to Washington for the next set of hearings. Well ... SNL did that joke on Saturday. Where do you think they got that idea? Granted they are responding to criticism & taking SEMI-positive action ... its just hard to believe that with all their power & PR firms & ad agencies & high priced execs that NO ONE was able to see how badly their prior actions would look to the American public considering their dire situations & poverty posturing.


Better than nothing but, um, just *barely* better than nothing. Not worth doing a jig or even polite applause.

Well said Deco. I would be much more impressed with a CEO that did that well **before** they got into big trouble.

 

[MoonWater]

Date: 11/26/2008 9:27:12 AM
Author: neatfreak

Date: 11/25/2008 11:53:25 PM

Author: decodelighted

Allisonfaye,



I think its less notable when companies get their hands caught in the cookie jar, get publicly reamed for it so much so that SNL is doing skits about it, and THEN they make an effort to ''shape up''. Some folks will think its too little too late -- & that these type of efforts should have been initiated BEFORE asking the gov''t for TWO bail outs. (Along with cancelling the parties etc).



Same with the reports that car execs are now going to ''caravan'' in American cars to Washington for the next set of hearings. Well ... SNL did that joke on Saturday. Where do you think they got that idea? Granted they are responding to criticism & taking SEMI-positive action ... its just hard to believe that with all their power & PR firms & ad agencies & high priced execs that NO ONE was able to see how badly their prior actions would look to the American public considering their dire situations & poverty posturing.



Better than nothing but, um, just *barely* better than nothing. Not worth doing a jig or even polite applause.

Well said Deco. I would be much more impressed with a CEO that did that well **before** they got into big trouble.

ditto.

 

[Allisonfaye]

Well, I am not sure if you guys know this or not but this guy was brand new to AIG when all this started. He wasn''t the one under whom all the mess was created in the first place. I think things like the resort party (which I have posted the news story about the fact that it was a reward for successful agents) were planned long before the new CEO was in place and probably it was a public relations gaffe but I imagine when he took over in early October ( I think) , that was pretty low on his radar screen since his primary focus would have been dealing with the big issues at the company. Does that make any sense? Sorry for the run on sentence. My head is completely clogged with a sinus infection and my 3 year old just threw up all over the place.

 

[perry]

"an unspecified amount of stock".....

that one statement is why many do not comment. Working for $1. Yeh, right. If you believe that....


Heck, I''d work for no wages whatsoever - or even pay them - for the right kind of stock deal.

As much as many people have groused over the salaries that CEO''s and others get; most often they get more out of their stock options.

It is very likely that he will be paid multi-millions per year in stock options.

So much for transparency..... Oh, that is right, it will be disclosed in the regulatory filings - because it has to be. So why are they not willing to say right now. Because the $1 makes a good impression. But it is a partial truth that hides the lie behind the story.


Perry

 

[Allisonfaye]

Not true. AIG''s stock is practically worth nothing right now. The company is almost 80% owned by the government so a run up in AIG stock is very unlikely. And maybe it would make a lot of people feel better to know that many, many of these corporate executives lost ALL of the worth of their options in all of this.

 

[miraclesrule]

I''m with Perry on this one. No way will any one of those gazillionaires work for a $1 salary, unless it''s on paper only. That is basically meaningless. Salary doesn''t equal compensation. I''d like to take a look at their weekly expense reports for next two years.