Good. And Mack has the good sense to sharply reduce bonuses for the underlying layers of management:
Mack said the cutbacks will affect the highest levels of management: 14 operating committee members will see bonuses reduced on average by 75 percent, while 35 members of the management committee will see bonuses down by 65 percent.
Morgan Stanley is also re-structuring their bonus structure to reward long-term performance.
Now someone needs to seriously go after AIG. I hear whining from Congress (Elijah Cummings) and some vaguely threatening expressions of interest from Cuomo, but AIG is still set to give (or has given?) “retention bonuses” to more than 168 top managers.
This is a company that has lost $37 billion this year and has been bailed-out by taxpayers to the tune of $150 billion. From Bloomberg:
Keeping the managers is necessary to maintain credit ratings and meet requirements in some reinsurance agreements, Liddy wrote. AIG disclosed the initial list of 130 managers in a September filing without saying how much most of the recipients will get. Another 38 people were added “subsequently,” according to Liddy’s letter, which didn’t disclose the new recipients or say when they had been added.
The list was expanded so AIG can retain people with “key client relationships” and who have a high “degree of flight risk,” Liddy wrote. He cited their “deep experience, extremely valuable business relationships, and unique ties to the many local communities where they live and work.”
How valuable can they be if the company failed apocalyptically?
Let them find work elsewhere if they can. Frankly, many of them should probably be fired outright. I hope Congress will enact a law to clawback these disgraceful “retention” bonuses.
But I’m not counting on it.