The American International Group (AIG) has received reams of government money and unlike the auto industry they don’t have to provide a plan. They have used government money time and again on junkets, vacations at luxury resorts, and sports jerseys in stead of keeping their company afloat.
But due to some pressure by New York Attorney General Andrew Cummo, the abysmal failure who is the CEO of AIG will be paid a salary of $1 a year, and other executives won’t receive bonuses or increases at least through 2009. Its a battle won in the larger scheme of things and certainly a victory for common sense. After all if your house is burning down it is kind of foolish to start installing a new in ground pool.
Under pressure from Attorney General Andrew M. Cuomo of New York, the American International Group said Tuesday that it would pay its chief executive, Edward M. Liddy, only a $1 a year and that it was freezing the salaries and eliminating bonuses for its seven other top executives.
In addition, the troubled insurance company said its next 50 highest-ranked executives would not receive salary increases through 2009.
A.I.G.’s cutbacks on executive pay came after Mr. Cuomo questioned last week whether the company actually planned to give out raises and bonuses to top executives, especially in light of the federal government’s $150 billion bailout of the company.
But excuse me if I am a bit cynical when a company that is supposedly struggling to stay alive uses money intended to save it on sports jerseys. If the government is to grant these companies any money at all, they should be required to have a plan to restructure as well as a plan to at least pay half of it back. But then again I might be a little insensitive after all what good is an investment bank if it doesn’t have sports jerseys?!