Bonus blues stalks big AIG, Wachovia

AIG definitely made the right move in announcing that its CEO would receive a $1 salary for 2008 and forego a bonus. The six other top executives will give up bonuses as well. About 50 other executives will give up pay raises in 2009. What else could the insurer do after accepting massive amounts of government aid? Recall that days after AIG took the initial $85 billion, it was reported that the company had funded lavish executive events. Any other than this would have been a PR debacle; it looks like it might have gone beyond government restrictions.

At Wachovia, however, the top executives are eligible to receive up to $98.1 million in severance by dint of their employment agreements, assuming the bank's acquisition by Wells Fargo is completed by Dec. 31. Now Wachovia didn't receive TARP funds, so this is less of an issue. CEO Robert Steel will not be eligible for a bonus. But you have to wonder if Wells Fargo might be in line for some sort of TARP funding. That would complicate the issue.

For more:
- here's an article on Wachovia from the AP

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