American International Group is terminating 14 voluntary deferred compensation programs involving 5,600 employees and independent agents and representatives. The result: approximately $500 million in earned but deferred pay will be distributed in the first quarter of 2009.
“AIG has decided to terminate and pay out the deferred pay plans to remove the incentive for employees to leave in order to obtain their deferred pay,” said Andrew Kaslow, Senior Vice President, Human Resources. “Many AIG employees have seen their life savings wiped out in the financial crisis. Employees are now concerned about obtaining the pay they have earned but deferred so they can pay for retirement, college tuition or other expenses.”
In a couple of recent articles, Business Insurance magazine has shown an exodus of top talent. Senior underwriters and high-level executives from its casualty, directors and officers and aviation units have all jumped ship to AIG rivals.
Senator Sherrod Brown of Ohio, a member of the Senate Banking Committee, doesn’t think AIG’s plan is so hot.
“American taxpayers must not foot the bill for fattened AIG paychecks. It is outrageous that AIG would even consider inflating executive salaries… This decision is a slap in the face to the millions of middle class families whose tax dollars AIG is borrowing. Company executives should be ashamed of themselves. This action should be immediately rebuffed by the Treasury Department and reversed by AIG.”
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