Bailout throws spotlight on extravagant waste

Thursday, October 9, 2008

It sounded like quite a party.

The company spent $139,375.30 for rooms; $147,301.71 for banquets; $1,488 for manicures, pedicures and hairstyling; $6,939.09 for golf; $2,949 for tips; $5,016.32 at the bar; $3,064.71 for room service. The problem with the $440,000 party was that it was thrown by a subsidiary of the American International Group Inc., right after that giant insurance company received an $85 billion bailout package from you and me, the American taxpayers.

A former CEO, Martin J. Sullivan, who ran the company while it was in its downward spiral, reportedly received a $5 million performance bonus.

And, while that was going on, AIG executives hid its shaky financial position from auditors, one of whom resigned after repeatedly trying to speak up.

One can't really blame the AIG executives for feeling entitled, it's just that asking the taxpayers to rescue their company threw the spotlight on CEO compensation that has been out of whack for years.

As long ago as 2004, the heads of America's 500 biggest companies received a total of $5.1 billion, or an average of $10.2 million a year.

If the current financial crisis can weed out the poorly and dishonestly run companies, and put an end to such extravagance -- without bringing down our entire economy -- it will have been worth it.

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