Looks like AIG's perk-filled glory days are officially over starting with CEO Edward Liddy, who is following a time-honored tradition at troubled companies by slashing his salary to a buck.
Via the WSJ:
American International Group Inc. put restrictions on executive salaries, including a $1 salary for its chief executive, and said it wouldn't give bonuses in 2008 or raises in 2009 to its top seven officers.
The company also said there would be no raises through 2009 for the 50 next-highest executives.
CEO Edward M. Liddy won't be eligible for severance payments during the period, either. He said the company and its executives believe the move shows it is focused on "overcoming [its] financial challenges so AIG can return value to taxpayers and shareholders."
The announcement comes after New York Attorney General Andrew Cuomo sent a letter to Mr. Liddy earlier this month saying AIG should be "completely transparent" about its compensation plans for 2008.
The insurance giant earlier this month ended 14 deferred compensation plans that affected 5,600 employees, saying all deferred pay would be distributed in the first quarter. The deferred compensation is pay that workers earned but volunteered to get at a later date. Most of the plans allowed participants to access the deferred pay only when they retired or left the company.
AIG had said it was concerned that employees would leave the company to get their deferred pay.
The company also said it is working to ensure no taxpayer money goes toward bonuses for its top 60 executives.
AIG stirred controversy last month when it held a week-long retreat at the pricey St. Regis Resort in California, where rooms can cost more than $1,000 a night, less than a week after it received $85 billion as part of the U.S. government's bailout program. Copies of invoices distributed by a House committee looking into the company show AIG paid more than $440,000, including nearly $7,000 for golf and $23,000 in spa charges.