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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