Dear Daily Kos Community:
Thank you for all the questions and comments received thus far.
I’d like to address a few of the ongoing questions and concerns Daily Kos readers have commented on in previous posts.
First, here are the facts regarding AIG’s compensation practices, and more specifically, the importance to the American taxpayer of retaining talented people in AIG’s businesses. We fully understand the concerns surrounding executive compensation, which have been capped at the highest levels of AIG. Our new Chairman and CEO, Edward Liddy, will receive an annual base salary of $1 for 2008 and 2009. He will not receive a bonus in those years. Also, AIG’s top seven officers will not receive annual bonuses for 2008 performance or salary increases through 2009, and AIG’s top 60 managers will not receive salary increases through 2009.
At the same time, our plan to pay back taxpayers is predicated on the divestiture of our assets to strong, competent buyers. To do that, AIG must preserve the value of its businesses, which is based on the people who work for us and, in particular, the strong and experienced leadership of key business units. Talented management is important both to the lines of business that will remain part of AIG going forward, and attractive to prospective buyers in any asset sales.
That is where the retention comes in – trying to keep your key players who have the best business relationships and the best specialized knowledge about the business in place. This applies to the property/casualty businesses AIG plans to keep and helps AIG get the best value for other businesses AIG is selling to pay back the government. For AIG to compete moving forward and to get best value for these businesses, AIG needs people to stay. If you're selling the Cleveland Cavaliers, the team would be worth a lot more with Lebron James than without him.
But even with retention, compensation is down. Including retention payments, compensation for our top five officers was down 60 percent in 2008 vs. 2007. For our top 60 officers, compensation was down 40 percent in 2008 vs. 2007, including retention. So this is a small investment on our part to repay taxpayers.
Second, there were a number of questions related to what happened to AIG, how AIG is managing the government’s investments and support, and where we go from here. To address each of those topics, I’d like to point you to a speech that Mr. Liddy gave a couple weeks ago in Hong Kong, where he addressed each of these areas with some degree of specificity. The speech is available at www.aig.com/movingforward(where we also house updates on our situation).
Thank you again for following AIG, and for your patience as we continue to adapt to this process.
A few more questions and answers:
Daily Kos reader The Bagof Health and Politics, has repeatedly asked about AIG’s role in health insurance plans and health care reform.
First, AIG is not a provider of traditional healthcare insurance, nor does AIG compete with healthcare insurance providers. AIG provides life, property and casualty insurance and does offer some health-related insurance products that pay insureds cash for medical expenses or lost income resulting from illness or accidental bodily injury. This same Daily Kos reader asks if "AIG (will) remove itself from the American’s Health Insurance Plans lobbying firm" and if the company will "support a public option to any health care reform that passes." AIG has stopped all federal lobbying activities. In the past, AIG has never lobbied for or against health care reform.
Would you be willing to tell us how many employees you have in the following categories?
More than $2 million/year:
$1-2 million/year:
$500,000 - $1 million/year:
$250,000 - $500,000/year:
$100,000 - $250,000/year:
$80,000 - $100,000/year:
$60,000 - $80,000/year:
$40,000 - $60,000/year:
< $40,000/year:
Dar Nirron
During the last several months, AIG has disclosed various voluntary compensation restrictions for our top executives, including a $1 salary for our CEO; no 2008 annual bonuses and no salary increases through 2009 for AIG’s top-seven-officer Leadership Group; and no salary increases through 2009 for the 50 next-highest executives, in addition to other bonus, severance and retention award restrictions.
Does AIG own any jets? If so will you sell them and start flying all your executives in coach?
detroittrader
AIG owns eight jets, all of which were purchased before September 2008.
AIG has sold three jets and a helicopter, has two more jets for sale and will divest itself of two other jets when it sells its domestic life operations and American General Finance. Unfortunately, current market conditions, combined with an increase in the number of corporate aircraft available for sale have created a very difficult sales environment for private aircraft. AIG uses its private aircraft sparingly. In fact, usage for 0ctober, November and December 2008 was reduced 56 percent, 71 percent and 47 percent respectively compared with the same months during 2007.