While this is somewhat off-topic, it is nonetheless quite important…
(NYTimes, free registration required) AIG revealed that it paid most of the $126 million penalty assessed by the Feds for wrongdoing out of a bonus pool for AIG Financial Products executives. The decision affected some 50-60 executives, most of whom usually received the majority of their compensation from the annual bonus. Many found their checks were missing a few zeros, and a few received no bonus at all.
This does AIG credit. The penalty was assessed by federal investigators for AIG’s sale of financial instruments whose only purpose was to smooth out earnings for public companies, thereby hiding the true nature of their results. By focusing his anger, and retribution on the individuals responsible for the malfeasance, Hank Greenberg (79), , AIG’s long-serving and highly successful CEO is sending an unmistakable message.
However, remember that the same execs who are paying the fine likely received bonuses in the past based on their financial successes, which undoubtedly included the sale of the financial instruments that led to the investigation. Here’s hoping that the execs affected were the only ones involved, and the wrongdoing did not go any further.
Kudos to AIG and Mr. Greenberg for this move.
Feb
10
