After two bailouts and a tidal wave of bad press, insurance giant American International Group Inc. appears to finally have learned its lesson on how bad lavish spending and millions in compensation looks. After
doing away with bonuses and $19 million in severance to former CEO Martin Sullivan last week, the troubled insurer said Tuesday that current CEO Edward Liddy will get a ceremonial $1 per year in salary while much of the company's top management will see their pay frozen.
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Bowing to pressure from Congress and New York Attorney General Andrew
Cuomo, AIG said Tuesday that seven senior executives will forgo 2008
bonuses and accept salary freezes. Among those executives is Paula Reynolds, vice chairman and chief restructuring officer. After
joining AIG in October, she'll be working for free in 2008, receiving
no salary or bonus whatsoever this year, and she will see her 2009
compensation tied directly to the progress of the company's
restructuring efforts. Additionally, the insurer's next 50 highest-ranked executives will forgo
pay raises through 2009. -
George
White
See AIG statement
See Dealscape post on AIG canceling bonuses
