Poor, struggling AIG executives
They ran the company into the ground, and now they will get only $500,000 in pay. It's a cruel world.
And by "struggling financially," of course, he means trying to live with the tragic salary of only $500,000. How will they ever survive?
Benmosche's comments come after the government's pay czar slashed salaries at AIG and other companies that got big bailouts. AIG still needs to repay about $90 billion to the government -- yes, billion with a "b."
The Treasury owns nearly 80% of AIG, and Uncle Sam wants to make sure execs don't live high on the hog. So pay czar Kenneth Feinberg has cut salaries for about 75 executives at AIG to $500,000. He is also forbidding any bonuses from exceeding 45% of total pay.
Feinberg said that half of everyone's compensation must be held for three years in stock or some other account, according to the Journal.
But before you break out the violin, consider that Feinberg did give AIG a break. The company can still give big retention bonuses that it had promised to some employees. And a small number of executives will be allowed to go over $500,000 in salary. And employees were paid pretty well this year before the pay restrictions went into effect in December.
"I believe that working with Ken Feinberg and his team, we've found a pretty good balance," Benmosche told the Journal.
Translation? We won. But we're going to act like we lost. Oh, and Benmosche got an exemption from the salary cap and is making $7 million a year in cash and common stock.
In the end, it was the taxpayers that lost with AIG. The Treasury said it will lose $30 billion of its $43.2 billion "investment" in AIG under TARP, the Journal reports. Other financial institutions, including Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC) are scrambling to pay back their TARP money and get out from under the government's thumb.
But AIG won't pay back its bailout for years. And it's unlikely it will have to repay the full amount.
So I don't feel all too sorry for the five employees in AIG's financial-products division who have lost a combined $88 million in pay since the U.S. bailed out AIG last year. Or the 10 executives who have lost a total of $168 million.
They got to live large in the good years, even as AIG was digging a dark hole for itself. Now AIG is paying the price, and executives who are unhappy with the restrictions can do what millions of other Americans are doing right now: Look for a better job.
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