AIG Freezes Executive Salaries, Liddy’s Pay Set at $1

[seemslikeadream]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aPzs7GiJWXxw&refer=home

By Hugh Son

Nov. 25 (Bloomberg) -- American International Group Inc., under pressure to limit executive compensation after a U.S. bailout, froze pay and scrapped bonuses for seven top leaders and said chief executive officer Edward Liddy will get a $1 salary.

The insurer’s next 50 highest-ranked executives will forgo pay raises through 2009, New York-based AIG said today in a statement. New York Attorney General Andrew Cuomo, who demanded last week that AIG disclose compensation plans, said the insurer took a “positive step” and called on other firms to follow.

Liddy is cutting costs after lawmakers and regulators criticized the insurer for bad bets that forced the insurer to take a taxpayer rescue that was almost doubled this month to more than $150 billion. AIG, crippled by losses tied to mortgages, follows Wall Street firm Goldman Sachs Group Inc. in limiting executive compensation after receiving commitments of capital from the U.S.

“It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face,” Cuomo said today in a statement. “Taxpayers have been slammed with a one-two punch, seeing their investments dwindle while simultaneously having to fund the Wall Street bailout.”

AIG shares have declined about 97 percent this year. The insurer slipped 7 cents to $1.70 at 12:11 p.m. in New York Stock Exchange composite trading.

Show of Confidence

Liddy, who was appointed by the government in September after AIG agreed to hand over an 80 percent stake to the U.S., will collect the $1 salary through 2009 and an unspecified number of equity grants that “show his confidence” in the insurer, the company said. Liddy will also be eligible for a bonus in 2010 and won’t get any severance.

[whosinpower]

1. What is an equity grant?????

What is that?

[Mz Pip]

2. I hope more top execs

follow his example. If they are coming to us for a bailout, not one of them should be making more money than a top government employee. The less the better.

Citicorp needs to forget about its $400 million for the stadium as well. That's a fiscally irresponsible move if I ever heard of one. Enough already.

[damntexdem]

3. If they froze the executives, instead, ...

they wouldn't have to worry about the salaries.