It’s a self-righteous showdown! Last week, Attorney General Cuomo, whose pants have been ablaze over executive bonuses this holiday season, fired off a poison-pen letter to AIG CEO Edward Liddy, formerly of Goldman Sachs, who joined the company in September after it was bailed out by the government and immediately stepped right in it with the whole spa imbroglio. Cuomo reminded Liddy that Goldman Sachs, which “received far less in federal funds than AIG,” had canceled bonuses for seven of its top executives, and asked what was AIG going to do, hmmm? “It seems hard to believe that AIG could pay significant bonuses or give raises to its executives after the company has quite literally been bailed out by the American taxpayer.”
Liddy didn’t respond right away. He probably didn’t want to give him the satisfaction. But then, today, he came back with guns blazing. AIG would match Goldman’s seven cut bonuses, the company said. And they’d raise them a forfeited salary of a dude who wasn’t even there when the really bad shit went down.
Mr. Liddy, who joined AIG on September 18, will receive an annual base salary of $1 for 2008 and 2009. His initial compensation will consist entirely of equity grants, showing his confidence in AIG and its team. He will not receive an annual bonus in those years, although he may be eligible for a special bonus for extraordinary performance payable in 2010. Mr. Liddy will not be eligible for severance payments.
Cuomo then smarmily praised this sacrifice as “a positive step,” which must have set Liddy’s teeth right on edge. Maybe next he’ll up the ante by buying tickets to Cuomo’s birthday party?
After Criticism From Cuomo, A.I.G. Cuts Executive Pay [DealBook/NYT]