One of the visible side effects of the financial crisis has been greater attention on executive greed. A Congressional hearing on the credit crisis is taking a deeper look at the issues, and some digging into insurance giant AIG's habits has divulged some disturbing details.
Just one week after AIG was bailed out by the federal government, its life insurance subsidiary AIG General spent $442,000 on a week long retreat for top sales executives.
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Washington Mutual's CEO Alan Fishman was hired on Sept. 7, less than three weeks before the bank failed and was purchased by JP Morgan Chase. JP Morgan hasn't decided the fate of the newbie CEO, but we can bet if he gets the boot he'll walk with much more than the $60,000 he was paid during those three weeks.
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Big companies have been making even bigger headlines these days, and all the recent economic drama has encouraged greater scrutiny regarding how much the CEOs of these companies are taking home.
Six figures would be nice for most individuals, but these executives have been taking home as much as nine figures! Can you guess how much some CEOs have made including base salary, stock, and bonuses?
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The CEOs of Fannie Mae and Freddie Mac were refused the generous golden parachutes they'd been counting on when their respective enterprises were taken over by federal regulators, and most recently the replaced CEO of American International Group (AIG) voluntarily abandoned his $22 million severance package.
Robert Willumstad served as CEO to insurance giant AIG and could have taken his $22 million into a slightly early retirement at the age of 63, but he stated, "I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares." What would you do in his position — would you walk away from this kind of package or take the money and move on?
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Golden parachutes soften an executive's fall when the company she leads is acquired and there's a change in ownership, leading to the dismissal of the particular executive. The parachute is a predetermined amount in excess of an executive's normal compensation and may be a combination of stock options, bonuses, and severance pay.
Most recently, the term has appeared in the news because the CEOs of Fannie Mae and Freddie Mac were refused their golden parachutes when their companies were taken over by federal regulators.
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Following last week's reports of a $7 million quarterly loss, JetBlue's chief executive David Barger has voluntarily taken a 50 percent base salary cut. The action brings his salary down from $500,000 to $250,000 and will apply through the remainder of 2008.
His pay-cut won't have much of an impact on the airline's overall struggle to survive the cost of fuel, but as The New York Times puts it, Barger's gesture is in show of solidarity with JetBlue's employees.
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Which renowned businessman appeared on All My Children this month?
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When you kick off your career with an entry-level gig, getting your career to the place you imagine it can seem like a long, impossible road. You dream of winning the lottery, or if all else fails, moving somewhere that allows you to do minimal work while living on the beach. While these fantasies can help you through your daily grind they'll do nothing to catapult you up the career chain.
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Some CEOs are so irreplaceable that there are protective measures taken to keep them out of harm's way. When Google released their 2007 executive expenditures, the report noted all of the founders' expenses including the cost of personal protection. Wow, bosses with bodyguards!
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Well check you out, Starbucks. At its annual shareholder meeting yesterday, the under-performing company announced some initiatives that stray from what the brand has turned into as of late. I found the most intriguing idea to be their version of a social scene — just yesterday they introduced an online community, My Starbucks Idea, where customers like you can get in touch with employees and make suggestions.
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