American International Group, the insurer getting a $152 billion federal bailout, disclosed it will pay approximately $3 million to several executives under deferred compensation plans that will be terminated. These arrangements have come under increased scrutiny as stock holders are questioning the large executive payouts in companies with plummeting stock values.
Personally, I just don't get it. If your company has to have a federal bailout because the business is mismanaged, why do you get a bonus or deferred compensation? Every job that I have ever had tied my compensation to my performance with financial targets. If I didn't hit my goals, my pay reflected this.
I know, these executives claim that there are market forces that they could not control. Like GM, Chrysler and Ford, they claim that their present financial problems have nothing to do with management. They report that it is simply a combination of factors that has put their corporations into bankruptcy.
I have owned and operated four corporations, and I take umbrage with their view. Anyone can steer the ship when the seas are calm. A dog could sit in the CEO seat and do just fine. It is much more complicated to manage when there are challenges. Isn't this what the big bucks were for in the first place?
These sweetheart deals are part of the corporate greed that has gotten our economy in so much trouble. Somewhere along the line, executive salaries took off while there was wage compression for everyone else. Is anyone really worth all that money? Especially with poor performance? Do I get to vote on some of these bailouts?