A classic example of giving in to populist ideals, no matter how myopic. We really believe these execs are sticking around to earn $ 200k next year? And when they bolt, who are they going to hire at this wage? Thus, taxpayers invest 180 billion dollars into AIG, and now we’ll find someone to run for the same salary as the director of the widget factory plant. Bright. That’ll teach those fat cats Wall St. We had the last word on them!
Who will they get to run AIG less than $ 200K per year? I understand the indignation that the U.S. bailed out the company, but now we have a $ 180b investment dollars in a company that will not be able to hire a single talented senior executive. Add to that the Congress has constantly looking over their shoulder every movement and made the press, and nobody will work for AIG or any other company with such pay restrictions.
The real solution was to have never bailed these companies out in the first place to have just let them fail as they should have. Competitor companies would have surely gobbled-up the assets of the failed customers and brought fresh blood to the fold. Now all we have is a socialist/marxist idea of regulating companies. You canno force someone to work and you cannot force someone to work well!
U.S. Said to Order Deep Pay Cuts at Bailed-Out Companies
Derived from Stephen Labaton’s writeup
Responding to the growing fury over the paychecks of executives in companies that have received billions of dollars of government financial bailout, the Obama administration will direct the companies that received the most aid to greatly reduce the compensation to their highest paid executives, an official involved in the decision said on Wednesday.
Under the plan, which will be announced in the coming days by the Treasury Department, the seven companies that received the most support will be required to reduce the salary of their 25 most highly paid on average about 90 percent since last year. Their total compensation – including bonuses and pension contributions – will drop on average by about 50 per cent.
The companies are Citigroup, Bank of America, American International Group, General Motors, Chrysler and the financing arm of the two automakers.
In the financial products division of insurance giant AIG, the location of problems that have hit the big insurer, and forced the rescue with more than 180 billion dollars in aid from taxpayers, not executive officers will receive more $ 200,000 in total compensation, an astonishing drop from previous years in which the unit has produced many wealthy executives and traders (derived from CNBC.com).