It feels good to be an insurance exec too!
Executives at insurance behemoth AIG must have been really stressed after getting an $85 billion bailout from the government. That seems to be the logical explanation for why executives at the failed company held a week-long retreat at the luxury St. Regis Resort in Monarch Beach, CA right after the Treasury agreed to stop the company from imploding.
Congress’s chief curmudgeon, Henry Waxman (D-CA), chided the executives for running up a tab including $200,000 for rooms, $150,000 for meals, and $23,000 for the spa. News reports did not indicate whether anyone took advantage of the resort’s “Pamper Your Pooch” package.
The package consists of an overnight stay in a Resort view guestroom, a personalized welcome letter to the pet, the exclusive St. Regis doggy bed, pet amenities including “Sniffany & Co.”, “Bark Jacobs”, “Dog Perignon”, or “Jimmy Chew” toys, personalized silver food and water bowls, an array of treats, biscuits, and bones, along with an issue of Hollywood Dog! Pricing for this package begins at $545 per night. (two-night minimum required)
As they did yesterday with ex-Lehman Brothers CEO Richard S. Fuld Jr., Waxman and others (seemingly in need of some R&R themselves) taking a careful look at thousands of documents from the failed insurer and raising concerns about what appear to be hastily-crafted golden parachutes for top company executives while the company was in freefall:
According to the Washington Post:
Those documents show that as the company’s risky investments began to implode, the company altered its generous executive pay plan to pay out regardless of such losses.
AIG lost over $5 billion in the last quarter of 2007 due its risky financial products division, Waxman said. Yet in March 2008, when the company’s compensation committee met to award bonuses, Chief Executive Martin Sullivan urged the committee to ignore those losses, which should have slashed bonuses.
But the board agreed to ignore the losses from the financial products division and gave Sullivan a cash bonus of over $5 million. The board also approved a new compensation contract for Sullivan that gave him a golden parachute of $15 million, Waxman said.
Joseph Cassano, the executive in charge of the company’s troubled financial products division, received more than $280 million over the last eight years, Waxman said. Even after he was terminated in February as his investments turned sour, the company allowed him to keep up to $34 million in unvested bonuses and put him on a $1 million-a-month retainer. He continues to receive $1 million a month, Waxman said.