The real question is why it took so long. That compensation was, at the very least, out of tune with popular sentiment is quite obvious. Why any number of shifty methods to reign it in were undertaken before the most obvious (fire the executives responsible for compensation, use the Board of Directors or one’s status as a shareholder to press for change) is somewhat beyond us. Handled properly, there is no reason at all to involve, e.g., the United States Congress in dealing with the matter.
A group of investors is seeking to oust an American International Group Inc director who leads a committee it said authorized bonuses to executives that brought the insurer to the brink of failure.
In a letter to U.S. government-appointed trustees for AIG, officials representing large union and public pension funds urged the trustees to block the re-election of James Orr, who chairs AIG’s compensation and management resources committee.
The group said Orr was on the committee when it approved pay and retention awards for executives at the AIG Financial Products unit mainly responsible for the insurer’s distress.
Simple: “Vote no” campaigns and shareholder activism do not give Barney Frank and his ilk the the same opportunity to grandstand and threaten subpoenas. “You never want a serious crisis to go to waste,” etc. etc.
I am going to call my old buddy from AIG and ask him to tell me why …again….AIG was a “best practices” group. He hates it but his answers are hilarious. The last answer was “Because we were thousands of monkeys with quote screens…”
http://market-ticker.denninger.net/archives/920-Hoh-Hoh-CNBC-Admission!.html
http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html