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OT/Pay freeze for AIG Exec's

Discussion in 'Uncategorized Threads' started by nspktr1, Nov 26, 2008.

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  1. nspktr1

    nspktr1 TS Member

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    Finally these A**holes are getting the message. No more hog trough.

    American International Group Inc. said salaries would be frozen and bonuses canceled for its top seven executives, and company Chairman and Chief Executive Officer Edward Liddy’s salary will be $1 a year until 2010. Additonally, salaries will be frozen through 2009 for the 50 next-highest executives.
     
  2. Bubba

    Bubba Member

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    How does this freeze put any more money in my pocket?
     
  3. comp 1

    comp 1 Well-Known Member

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    The people who created the problems can't solve them.
     
  4. CharlesK80

    CharlesK80 Member

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    Pay freeze is not sufficient. Should be a disgorgement of past earnings. You may not know what that means, but they do.
     
  5. crusha

    crusha TS Member

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    The bailout didn't put any more money in my pocket...but it didn't stop the f'ers from doing it.
     
  6. phirel

    phirel TS Member

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    So many people on this site seem to know how to operate a large corporation I am surprised they are not doing it.

    Pat Ireland
     
  7. R.Kipling

    R.Kipling Well-Known Member

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    Pat,

    Quite a comment, and point taken. However, it doesn't take a genius to recognize a poorly run large business, either. There are many big companies being run well today. I have worked with several, and to a man, those executives know that controlling credit is the primary principle, and discipline to success.

    Borrowing millions, to pay out millions in bonuses isn't wise use of credit, or cash. AIG's, Liddy took 24 million last year in bonuses, during the same time AIG was bleeding-out. Did that take intelligence, or unbridled avarice? Either way, taking a $1 for year, is just more subterfuge.

    I noticed in another thread that you, wisely, brought attention to TS.com's link to our Representatives. I commend you on the suggestion. It's time that we, the common folk, tell our officials, each and every day, that it's time to get the foxes out of the freshly raided Hen House - before we restock it with fresher meat.

    IMO,
    Kip
     
  8. pendennis

    pendennis Well-Known Member

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    Most of these CEO's, COO's, CFO's, etc., have attorneys and agents who represent them when it comes to compensation. They are frequently written to be somewhat ironclad when it comes to pay and benefits. Unless the guy/gal gets caught urinating in a public fountain, or is caught trolling for hookers (morals clause), they usually get paid the contracted amount. And most courts are not inclined to void contracts just because the contract may be inconvenient to one of the parties at a particular point in time.

    Is this right? Legally, yes. But contracts are not moral in nature. They usually guarantee pay for some type of performance. If the employee concedes pay or benefits, they may be doing the moral thing, but if he doesn't, he has still done the legal thing.

    Pat is absolutely correct. For those who think they can do better, send your resumes and cover letters to these companies. Outline your plans for turnaround and profit improvement (under contractual confidentiality, of course), and see if they'll hire you.

    CharlesK80 - Unless a person agrees contractually, to disgorgement, prior pay is a moot point. If contractual malfeasance or fraud was committed, that's another story. Do we do the same thing for the grunts of companies? Have a good year this year, and give it back if profits go down next year?

    No one changes the past. We can only use it to pilot our future courses of action. When I went to college, one of the early books I had to read in principles of business, was a book written by Robert Townsend, "Up The Organization" (the title IS a double entendre). I reread it often. His words were never more true than today.

    Dennis
     
  9. R.Kipling

    R.Kipling Well-Known Member

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    Dennis,

    Your point on the drafting of contracts doesn't excuse the process, it only serves to point out the abuses. I've been inside big business long enough to see the good-ol'-boys club that the Fortune companies have become. Contracts that do not have performance, profit and conduct clauses should never be written. The fact that they are is just one more symptom of the cultural malfeasance.

    Townsend was good, but Drucker was better(IMO). Both have a timeless quality. Perhaps their ideals are timeless because we keep repeating our mistakes? Have you read anything of Drucker? Townsend, himself, railed against what he termed, "thirteenth month" bonuses; extra money payed for just showing up. It was excellent advice then, and now.

    IHMO,
    Kip
     
  10. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    Had I run my construction jobs and lost money like these top dogs have, I'd have been fired on the spot! Bonuses?? Yeah right! These guys need a dose of reality rammed down their throats too! Creative accounting can eventually catch up with number crunchers and some have been tagged. Frozen pay? Fired is a better answer to mis-management. Hap
     
  11. CharlesK80

    CharlesK80 Member

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    Dennis...I do not think Pat is "absolutely correct" at all. In fact, he is absolutely wrong.

    He suggests that only major company CEOs can find fault with major corporate fraudulent marketing, product safety or contract compliance. Juries of common citizens do it daily, based upon admissible evidence. In both Federal and State courts.

    Pat reflects the elitist approach that has no place in our court room or on main street. Corporate CEOs enjoy no shield of immunity from fair comment by anyone.

    On a personal level, I do not know how to make a car, but I can find out about Ford's construction of the Pinto. You may not know how to make your shoes, but you can tell if they fit your feet. I do not know how to construct a suspension bridge, but I do not need a Eng degree or a CEO to tell you that it has collapsed.

    The idea that only a CEO can, or should, comment on another CEO is nonsense.

    Equitable remedies work. And there is nothing more effective than the return of bonus or income by a CEO.
     
  12. pendennis

    pendennis Well-Known Member

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    Kip, when I attended business school in the mid-1970's, Drucker was very much out of favor, although my professor's quoted him liberally, and his works were required reading. Townsend was still considered a maverick, although his "rebel" philosophy at Avis saved them, and caused them to grow. Drucker wasn't well-liked by Harvard or Stanford schools, since he was very staid by their standards, and they had started to teach more liberal (creative) business models.

    Hap, real accountants don't do creative accounting. Real accountants are the most button-down individuals you'll ever deal with. The Accounting Standards Board and the GAAP are conservative by nature. However, until the advent of Sarbanes-Oxley, which went way overboard, their standards were guidelines, and not law.

    The large accounting firms ended up getting creative, when their management advisory groups got in bed with the very firms they were supposed to audit and certify. This was another example of everyone being in the pool with no lifeguards.

    Best,
    Dennis
     
  13. Hap MecTweaks

    Hap MecTweaks Well-Known Member

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    Dennis, what do you call the chef that cooks the books to increase the size of your bonus? Way too much of that "chef magic" has helped lead to this fiasco! Barney though everyone should be able to buy anything he wants whether or not he could pay for it. The gravy train had to stop somewhere sometime. Hap
     
  14. R.Kipling

    R.Kipling Well-Known Member

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    Dennis,

    I can't begin to count the number of times I have read the cover page of an accounting document that ended with "The owners and management of ____________ have chosen to present ____________ using details other than standard GAP." To me, this statement is just an announcement that "we are lying little, and lying big here", see if you can catch us.

    I didn't catch where you went to school, but I can tell you that Drucker is still referenced at the Wharton School; a fact that I use to take some comfort from, every time I talk to my grandsons. Rather than crack one of the 20 Drucker books on my shelves, and include some direct quotes, I've attached an excellent article on Drucker's Principles for anyone so inclined. Deming, would also be an excellent source for the Big-3 to revisit. Deming might be more up your alley, because he started as a Statistician.

    One principle that I have used religiously in my own practice is "review your company like a bystander". From what you've seen on these posts alone, this principle would have served the big-3 even more than Townsend's CEO's DON'T's". Perception rules reality in this day and age. Conspicuous and excessive privilege is a Kevorkian prescription for any struggling company.

    IMO,
    Kip
     
  15. pendennis

    pendennis Well-Known Member

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    Kip, I attended the University of Louisville. As with many other icons of business Drucker and his philosophy have, more or less, come full circle. I always took his "Principles" pretty seriously.

    I attended a couple of seminars presented by Dr. Deming in the 1970's. The Speed Scientific School at U of L sponsored him. I remembered at the time, how he had managed to quantify quality, which seems oxymorinic. Quality seemed such an intangible at the time. It only took half a day to realize that statistical process control could be implemented somewhat easily. But, getting plant management to adopt this proved nearly futile for about four years.

    Deming's prinicples were finally adopted nearly wholesale at our plant in the late 1970's. Our quality had reached a nadir in 1979. Finally, a letter had been drafted and signed by the operations general manager. He gave our plant manager a heads up the Friday before the letter was to be published on the following Monday.

    The plant manager flew to Dearborn that day, and met with the vice-president manufacturing. He promised a complete turn around in quality within six months, if the plant would be left open. Management reluctantly agreed, and he came back, and called the union and plant mangement into his office and gave them the ultimatum. Within four months the plant went from last to first in quality by every measurement. At the end of the six months, the plant was selected to build the then-new Ranger. Oh, by the way, the UAW building chairman at the time happened to be Ron Gettelfinger.

    Ford adpoted Six Sigma several years ago. The fruits of that adoption are now coming to fruition. Quality is the statistical equal to Toyota, and they are the safest cars built in the U.S., beating Honda and Toyota.

    Dennis
     
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