Quote:
Originally Posted by RIJIMMY
I think its a gesture. he probabaly had a base of 400k and got a 1M bonus in a good year. It appears that is what many of the execs are doing at other financial companies , dropping the salary
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From what I understand they were given a guaranteed 2008 bonus equal to their 2007 bonus as a retention incentive.
The idea being, you made us a lot of money in 2007, but we know 2008 is going to be rough, so
regardless of what happens we're going to treat you like times are good so you don't jump ship.
Then they take a 99.999% cut of their base pay, knowing that they're still going to make a lot of money at the end of the year. I don't think for a moment your average finance exec is going to work for free out of a sense of altruism.
Now the economy really tanks and AIG is going to go bust without government help. If AIG folds they probably don't see their bonus.
The government steps in and backs the money truck up to the front door. Taxpayers then fund the bonuses guaranteed to the execs to have retained them for the past year.
Ultimately, it looks like the taxpayer has assumed the
personal risk that these execs took by staying on with no salary.
The entire situation is wierd.
-spence