January 19, 2010

Thank you, Kenneth Feinberg

It's always refreshing when something works. President Obama's pay czar decided that some at AIG didn't need to make more than 500k per year. Some of those people wrote him a letter and said they'd resign and pull far more in severance. Feinberg looked them in the eye and said, leave.

So one of them resigned and as of today, the company has not collapsed. As for whether or not she'll get her full severance pay out, that's still up in air. I really hope not... because she wouldn't have gotten it in the event of a bankruptcy (she would have been a WAY junior creditor).

The reality is that none of these people are too valuable to replace

Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University, said no AIG employee was irreplaceable.

"We have been duped into thinking that these AIG employees have some kind of secret code that no other employee could discover if they were hired to replace them and therefore they are able to basically hold the company ransom," Hurley said.

Goddamn that do sound familiar, don't it? Sorry, couldn't resist the gratuitous high-five with myself from almost a year ago. As if that wasn't enough, here's the kicker to the whole thing (and I'm not really happy about this); Companies can pay more than the limits he sets but they have to do it in stock which really sucks for existing shareholders who are about to get diluted. As it turns out, the folks at AIG don't like the idea either. Why? Excellent question!

Or there was A.I.G.’s behind-closed-doors argument against Feinberg’s directive to pay its top people in large part with A.I.G. stock. The company’s reasoning? That the stock — trading briskly at the time at around $40 on the New York Stock Exchange — was actually worthless.

Reality is always way better than fiction, don't you agree? Wouldn't you also like to see some of these fuckwits out repairing a sidewalk with a sledge? Let them see what real work feels like and pays.

As I write this post, this song popped into my head...

I guess that means I better, you know, stop before I do something rash.

Posted by mcblogger at January 19, 2010 12:52 PM

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It's long been an article of faith that executive pay, which has been growing at a breathtaking clip over the last 30 years, is earned (deserved, even!) because only these people are uniquely talented and able to do this job.... [Read More]

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