We Have Plenty of Acronyms to Go Around

I’ve heard grumblings in the last month or so about the need to keep our economy vibrant by advancing the current war beyond its present state.  Some claim it will restore our economy faster than the plodding along and bailout schemes presently being used.

This latest debacle is not the AIG bailout but the corporate executive payoffs.

There are two things that haven’t been addressed.

1.       We will never see any of that money, so what are we complaining about?

2.       Has anyone considered this to be hush money?

Why is the U.S. Government so concerned about what a company does with free money?  The easy snipe is to claim that AIG is just doing what Congress has always done, but it’s more than that simple observation.  I believe this operation has everything to do with fear, and a little to do with fairness.

AIG Headquarters.  Image via Wikipedia

If we look back at the last government refund, who got paid?  Single folks who made less than $75,000 or married folks who filed jointly and made less than $150,000 got the refund.  Back in 2005, Forbes magazine took a look at top level CEOs of major companies.  Mark J. Sullivan was the CEO of AIG back then.  Sullivan’s straight salary was $701,000.  Obviously, Robert Willumstad, the most recent CEO of AIG, made more than that before he got fired from AIG.  A September 18, 2008 Reuters article claimed Willumstad’s annual salary was $1 million per year before he got fired in September 2008.  Willumstad only spent 3 months on the job when he was shown the door.

For the mathematically challenged, this means that the salary for the CEO at AIG increased 15% per year.  Not bad.  However, the bigger picture is that Willumstad was promised $21 million in annual bonus and incentive awards.  (http://www.directorship.com/liddy-replaces-willumstad).