The cascade of leadership at AIG

Posted by Marc Hodak on December 7, 2009 under Executive compensation, Unintended consequences | Be the First to Comment

HR executives are rated, in good part, on their ability to retain their talent.  If your best people keep leaving, you’re unlikely to see much progress  If progress is making enough money to pay back, or at least get a fair return on, the $182 billion that your main investor has provided, you need all the help you can get.

So far, Kenneth Feinberg has not done well on the retention score at AIG.  About half of the 25 executives whose compensation he was charged with reviewing have left the company.  Another five are likely to leave pretty soon, including:  Anastasia Kelly, General Counsel; Rodney Martin, head of one of AIG’s international life-insurance businesses; William Dooley, head of the financial-services division; Nicholas Walsh, vice chairman and head of AIG’s international property-and-casualty-insurance businesses; and John Doyle, head of the U.S. property-casualty business.  By giving their notice and leaving before the end of the year, they get to keep their rights with respect to severance and prior bonuses.

A fair percentage of the people in the next tier of earners whose pay is subject to less stringent regulation have left as well, but about 20 of them are about to get bumped up to the top 25 category.  This is a promotion that they will not relish.  They will be interfacing directly with their government masters, trading off political and business considerations while having their pay scrutinized and limited.