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Honsoku -> RE: Dear AIG, .... I quit! (3/25/2009 2:34:03 PM)
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After looking the time up, Liddy has been the CEO for longer than five months (though apparently not much). It still seems odd. If I was taking over over a company with a massive problem area, I would be *gasp* talking to the people in and around that problem area a lot. From the letter, he doesn't sound like he is supposed to be some grunt VP. They are paying their grunt VPs nearly a million a year and having them orchestrate selling off major chunks of the company without interfacing with top level people? That doesn't fit. No matter how you dice it, the letter doesn't add up.
Executives take a $1 salary in exchange for extravagant bonus pay because;
A: It's good for tax reasons
B: It means that they are pinning their future success on the success of the company.
The downside to B is that if the company tanks, so do you. Well, the company tanked. You took your chances. Deal.
However, from the tone of the letter; the core issue isn't the money. If he can afford to donate it all, he and his family isn't going to starve. True, he may feel unfairly put upon, but on the flip side so are millions upon millions of other people. He still had a job and he was still making more than about 90% of the population (even assuming he only gets that 10% of his bonus). The whole thing has the ring of a supposed adult throwing a tantrum going "But it's not faaaair" then storming out.
Let's not forget that the 90% tax only affects people with a household income of $250,000 or more. Which will most likely be hacked out in tax court to mean that if you are the sole income source, that only the part of the income above $250,000 will get taxed at the 90% rate.
Here is what I suspect really happened;
When AIG was caught being cavalier with taxpayer money back in October, they went and tightened down on a bunch of extravagant expenses, including bonuses. For the ones that were effectively being paid bonus as salary, they told their people that this was only for show and that they would unfreeze the bonus by the time these bonuses were due. This was because they assumed that the heat would be off, so they could slip them by. Unfortunately for them, other places needed bailing and the heat didn't come off of them, so someone noticed. Now AIG is having to actually stick to their word that they gave to the government and the people who were counting on being able to pull a fast one are all upset.
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