Do you have an opinion about her pay?

Posted by Marc Hodak on January 4, 2010 under Executive compensation, Politics, Reporting on pay | Read the First Comment

A few top executives at AIG left on the last day of 2009, including Anastasia Kelly, general counsel and chief HR officer of AIG.  By leaving then instead of after New Years, these officers, among the “Top 25” of the firm, got to keep their rights with respect to severance and prior bonuses.  While these officers were doubtlessly driven by their short-term incentives, they certainly weighed those against the potential long-term benefits of sticking with AIG, and found those prospects wanting.  Kelly in particular was outspoken in critiquing the general effect of pay regulations on AIG and its ability to remain competitive for talent.  Why would she want to stick with a foundering ship with little hope of getting righted?

Politics has driven the compensation policy of this administration (as it would any administration, perhaps), especially with regards to companies that have received government funds.   Fair enough.  We own them; we tell them what the score is with their pay.  We get to grumble about the $2.8 million in severance that Kelly was collecting for abandoning ship, even though that is what any of us would have done if we had the chance.  We get to say, “Who needs her?” as if each of us had the position or wisdom to judge that, better than her CEO boss, who has also complained bitterly about his ability to retain talent under the current pay regime.

But just because we can deal with the talent issue glibly and dismissively doesn’t mean that it isn’t real.  Talent is not being dealt with in a serious manner in the press.  Like the utter lack of questioning about what would happen to AIG if Hank Greenberg were pushed out for political reasons, no one is getting by the big numbers that these executives make, and could expect to make anywhere outside of the government sector, and asking, “Is this really good for AIG, a giant company in which I have a direct investment, and was saved because its presumably out-sized effect on our economy?”