by SamHenry August 31, 2009
A recent article in the FINANCIAL TIMES outlined a nw plan for the government-run AIG Corp to adjust executive pay and bonuses. Will this affect the quality of personnel hired? and will it affect the bottom line?
From the FINANCIAL TIMES
New AIG chief to receive $7m pay
By Francesco Guerrera in New York
Published: August 17 2009 22:40 | Last updated: August 17 2009 22:40
Robert Benmosche, AIG’s new chief executive, will receive annual pay of $7m in cash and shares and be in line for a bonus of $3.5m a year, the government-controlled insurer announced on Monday.
Mr Benmosche’s package has been approved “in principle” by the Obama administration’s “pay czar” Kenneth Feinberg in a move aimed at avoiding a repeat of the political row that broke out earlier this year over bonuses for AIG’s staff.
Harvey Golub to become AIG chairman – Aug-07
Greenberg pays $15m in SEC settlement – Aug-06
Edward Liddy, Mr Benmosche’s predecessor who stepped down this month, agreed to receive $1 in pay after lawmakers attacked the insurer for paying out bonuses to some traders despite having received some $80bn in taxpayers’ funds.
However, people close to the situation said Mr Benmosche, a former chief executive of rival insurer MetLife, had made it clear it would only take the job if he were paid a salary and a bonus.
Under his pay deal, Mr Benmosche, 65, will receive a cash salary of $3m a year plus $4m worth of shares in AIG, which he will be barred from selling for five years. His annual bonus – to be awarded by the board depending on his performance – could total up to $3.5m in shares.
The terms of Mr Benmosche’s package underline a trend toward increasing base salaries and reducing bonuses at US financial services companies following the crisis.
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