Thursday, September 18, 2008

This sort of thing makes me want to start a Marxist revolution

The CEO who drove AIG's stock price into oblivion and precipitated an $85 billion bailout with taxpayer money is getting a $47 million dollar severance package:
American International Group said it paid a $47 million severance package to former Chief Executive Martin J. Sullivan, whose resignation took effect on Tuesday.

Sullivan, who left his position in mid-June after two quarters of record losses at AIG [AIG 2.05 -1.70 (-45.33%) ], will receive severance of $15 million, and a bonus of $4 million for the portion of the year he worked, according to a regulatory filing.

Sullivan also will hold on to outstanding equity and long-term cash awards valued at about $28 million, the filing said.

His resignation is being treated as for "good reason" meaning he is entitled to the severance package outlined in his employment agreement but contingent on his not competing with AIG for business for one year.

I don't think they have to worry about that last non-compete point. If you were an insurance company, would you hire this guy?

This sort of thing shows that our current capitalist system, whatever its merits, is not on a sound moral foundation. Now, I don't really want a Marxist revolution, and it's very likely I would end up much worse off than I am now should one come about (as would most of us, I suspect). But when a guy gets paid $47 million to destroy a company, put our entire financial system at risk, and put our already debt-strangled government $85 billion more in the hole, a little state ownership of the means of production doesn't sound so bad. Would government bureaucrats do worse than this guy? One thing's for sure: you wouldn't have to pay the People's Minister of Insurance $47 million to fire his or her sorry ass.

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